Earnings Preview: Dick’s, Foot Locker, Hibbett & Shoe Carnival

Another week of earnings season means another group of footwear heavy hitters are set to report their financials. To place things in perspective, FN brings you the lowdown on how they performed last quarter and what you can expect in the days ahead.

Dick’s Sporting Goods Inc.
For the fourth quarter, ended Jan. 31, 2015, Dick’s reported earnings of $155.5 million, or $1.30 per diluted share in early March. Those earnings were a 17 percent gain over the same quarter of 2014, beating both the company’s expectations as well as Wall Street’s estimates for the quarter.

Since then, the company hosted its analyst-day meeting in mid-April to address key investor concerns, including store growth, specialty concepts and e-commerce.

At that meeting, CEO Edward Stack announced that guidance had been adjusted down from 2013’s analyst-day guidance primarily due to a reduction in store openings, that Dick’s will have an e-commerce site on its own platform by January 2017, and that the company will open its new Field & Stream stores at a slower pace.

“We expect Dick’s to continue investing behind its omnichannel initiatives in 2015,” wrote Citi Research analyst Kate McShane on May 4. “[Capital expenditure] is forecasted to increase 5 percent year-over-year, to $365 million, as the company completes phase two of its three-part plan to launch Dicks.com on its own platform; opens approximately 45 Dick’s stores and nine Field & Stream locations; and spends behind e-commerce initiatives …”

Dick’s is scheduled to report Q1 on May 19.

Shoe Carnival Inc.
Evansville, Ind.-based Shoe Carnival reported better-than-expected earnings in Q4, ended Jan. 31, 2014. The company’s profits, at $3 million, were five times the previous year’s Q4 profits.

“We believe that initiatives put in place last year, such as national advertising, e-commerce and better brands, will continue to bring positive tailwinds throughout FY15,” wrote Susquehanna Financial analyst Christopher Svezia on May 13. “While [Shoe Carnival’s] long-term growth target remains intact, management appears more disciplined with the pace of expansion.”

As evidence, Svezia pointed to company’s 18-22 planned store openings this year — most of which, the analyst wrote, will focus on “in-filling markets that were recently entered to drive leverage through market ‘clustering.’” The company also plans to remodel or close underperforming stores, Svezia noted.

Shoe Carnival is expected to report Q1 on May 20.

Foot Locker Inc.
The New York-based retailer posted a solid Street beat in Q4, ended Jan. 31, 2015, when it reached earnings of $146 million, or $1.01 per diluted share, a 25 percent year-over-year gain in EPS.

Many analysts have given the stock a “positive” or “buy” rating, citing strong product offerings and sell-through, particularly in basketball; a greater SG&A leverage; and calming FX pressure.

Market watchers say they expect the firm to reiterate guidance for double-digit earnings growth when it reports Q1 on May 22.

A recurring concern noted by analysts relates to comps.

“Margins are at historic highs, and multi-year same-store sales compares are getting tougher —  resulting in debate among Foot Locker bears regarding sustainability of EPS upside going forward,” said UBS Investment Bank analyst Michael Binetti in a note today. “That said, our checks point to strong basketball demand and no sign of improved innovation in casual running.”

Hibbett Sports Inc.
Hibbett Sports Inc.’s share price jumped on March 13 after the Birmingham, Ala.-based sporting-goods company’s Q4 results beat Wall Street forecasts across the board. For the quarter ended Jan. 31, 2015, the company’s net income rose 18.1 percent, to $19.9 million, compared with $16.9 million in the year-ago quarter.

While the firm’s share price jumped in March on the earnings beat, Svezia pointed out that “recent execution inconsistencies, coupled with a lack of e-commerce clarity” have weighed on Hibbett’s shares, driving them down 15 percent over a one-year period.

Svezia did, however, show some optimism on his “neutral-rated” stock.

“We expect comp-to-date to have slightly accelerated low-single-digits, given an easy compare last year,” Svezia wrote last week. “As we think about the rest of FY16, we will look for signs that initiatives such as the new wholesale/logistics facility, new allocation systems and markdown optimization (1Q margin hit) will continue driving a better margin profile in [the second half of the year].”

Hibbett is expected to report on May 22.

More From Our Brands

Access exclusive content