Although gross margins remained pressured at Dick’s Sporting Goods Inc., strength in its flagship-branded stores and athletic footwear segment contributed to a better-than-expected first quarter for the Pittsburgh-based retailer.
Dick’s on Tuesday reported a profit of $10.2 million, or 9 cents a diluted share, for the quarter ended May 2, while revenues hit $959.7 million. Analysts polled by Yahoo Finance had expected earnings per share of 7 cents and revenues of $912.6 million.
That compares with a net income of $19.6 million, or 17 cents a share, for the same quarter a year ago, when sales totaled $912.1 million.
Costs relating to the merger and integration of Chick’s Sporting Goods came in at $4.4 million for the quarter.
“We are very pleased with our first-quarter results in light of the tough economic environment,” Edward Stack, Dick’s chairman and CEO, said during a conference call. “In addition to growing sales, we have leveraged our expenses, reduced inventory levels and further strengthened our balance sheet.”
The company’s same-store sales fell 6 percent for the quarter, versus a drop of 4.1 percent in the first quarter of 2008.
But CEO Stacks said footwear was a bright spot. “The athletic footwear category was actually positive,” said Stack. He singled out strength from the Under Armour running shoe launch, as well as strong offerings from Nike and Asics.
Meanwhile, the company’s Golf Galaxy stores, which grappled with the highly promotional golf industry, were down 19.7 percent.
Still, with unexpected first-quarter strength and optimistic expectations for the second-quarter, Dick’s raised its low-end annual guidance and same-store sales estimates for 2009. The company now expects EPS to range from 88 cents to $1, excluding merger and integration costs, versus its original estimate of 80 cents to $1. Including merger and integration costs, Dick’s expects EPS of 85 cents to 97 cents. The company also guided its same-store sales down 6 percent to 9 percent for the year.
Dick’s stock closed at $18.67 at the end of trading on Tuesday, down 5.6 percent.