Sporting Goods Stores Split on Earnings

NEW YORK — Both Dick’s Sporting Goods Inc. and Hibbett Sports Inc. turned in second-quarter profit declines last week, but while Dick’s outperformed analyst expectations, Hibbett’s numbers came in well below consensus.

Tight inventory and expense management helped Dick’s to a profit of $38.9 million, or 33 cents a diluted share, which, although a 3 percent drop from last year’s $39.9 million, still beat the 31 cents forecast by analysts on Yahoo Finance.

The Pittsburgh-based retailer increased second-quarter sales by 4 percent to $1.13 billion, versus $1.09 billion during the second quarter of 2008.

Dick’s Chairman and CEO Edward Stack attributed the sales gain, in part, to consumer sentiment. “I won’t say they are feeling great, but I think consumers are feeling a little bit better,” he said during a conference call with analysts.

The company’s footwear business, he added, “has been better than anticipated, but still is slightly negative.” He pointed to continued strength in higher-priced athletic shoes, but also noted that footwear sales have become “bifurcated” by price, and that “some lower-end, opening-price-point business has picked up a little bit based on what’s happening in the economy.”

The retailer’s same-store sales declined 4.1 percent overall, as its Dick’s Sporting Goods stores fell 3.2 percent and Golf Galaxy dropped 11.1 percent.

As a result of its second-quarter results, the company raised its full-year 2009 outlook to $1.02 to $1.07 a share, from 88 cents to $1. Same-store sales are expected to come in down 4 to 5 percent for the year.

By contrast, Hibbett Sports disappointed analysts with a 77 percent earnings slide to $1.1 million, or 4 cents a diluted share — 6 cents below analyst expectations. During the second quarter of 2008, Hibbett posted a profit of $4.8 million, or 17 cents.

Sales dipped by 6 percent to $123.1 million, versus $130.3 million in the year-ago period.

Mickey Newsome, chairman and CEO of Hibbett, said the Birmingham, Ala.-based company was negatively impacted by late tax holidays and poor results in its footwear business. “Most merchandise categories were close to plan with the exception of footwear, which significantly underperformed against our plan and negatively influenced product margins,” he said in a statement.

Jeff Mintz, VP of equity research at Wedbush Morgan Securities, said geography was to blame for many of the differences in the two retailers’ results. “Hibbett is really concentrated in Southern states, where there was a tax-free holiday shift from July into August. That impacted Hibbett in a way that Dick’s did not get hit,” he said. “It’s primarily a second-quarter thing [at Hibbett].”

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