Retail

Dick's Sporting Goods Earnings No Trophy Winner

Paul Ausick

Published: March 8, 2016 8:35 am

Last Updated: January 13, 2020 12:15 pm

Dick’s Sporting Goods Inc. (NYSE: DKS) reported fourth-quarter and full-year 2015 results before markets opened Tuesday morning. The sporting goods retailer posted quarterly diluted earnings per share (EPS) of $1.13 on revenues of $2.24 billion. In the same period a year ago, the company reported EPS of $1.30 on revenue of $2.16 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.15 and $2.28 billion in revenue.

For the full year, Dick’s posted adjusted diluted EPS of $2.87 and revenues of $7.27 billion, compared with EPS of $2.84 and revenues of $6.81 billion in fiscal 2014. Analysts were looking for EPS of $2.89 and revenues of $7.31 billion. The 2015 adjustment was related to a litigation settlement charge. On a GAAP basis, EPS totaled $2.83.

Same-store sales for the fourth quarter fell 2.5%, with sales at Dick’s Sporting Goods stores down 2.5% and sales at Golf Galaxy stores down 5.8%. Online sales accounted for 15.7% of total sales in the quarter, up from 14.4% in the year-ago quarter. For the full year, online sales contributed 10.3% of net sales compared with 9.2% in 2014.

Dick’s expects to report consolidated diluted EPS for the 2016 fiscal year in a range of $2.85 to $3.00. Same-store sales for the year are expected to range from flat to up 2%, compared with a decrease of 0.2% in 2015.

For the first quarter, EPS is now forecast in a range of $0.48 to $0.50, compared with $0.53 in the prior year. Same-store sales are projected in a range of flat to up 1% for the first quarter, compared with an increase of 1% in the same period a year ago.

Analysts were expecting first-quarter EPS of $0.54 and full-year EPS of $3.23. Combined with the lower earnings and revenues, Dick’s stock could take a beating in Tuesday’s trading.

CEO Edward W. Stack said:

Given the challenging conditions we faced with the unseasonably warm weather, we operated quite well in the fourth quarter, generating earnings within our guided range and driving results in important growth categories. In 2015, we grew our omni-channel platform by maintaining strong new store productivity and driving our eCommerce business. We ended the year with a strong balance sheet and returned over $420 million to shareholders through dividends and share repurchases.

The downturn in consumer interest in golf is hammering Dick’s, and the company is not alone. Adidas is reviewing its golf business, which includes Adams and Ashworth brands, as well as the company’s own shoes. The golf scene needs a rejuvenated Tiger Woods or someone with equal appeal to get the game going again — someone who can do for golf what Steph Curry is doing for the NBA.

Dick’s shares were down about 5% in premarket trading Tuesday morning to $42.11, in a 52-week range of $33.42 to $60.33. Thomson Reuters had a consensus analyst price target of $46.13 before the results were announced.