Dick’s Sporting Goods Inc.’s shares are seeing gains in early morning trading — up more than 10 percent at press time — after the company today reported first-quarter 2016 sales and profit that beat market watchers’ forecasts.
The sporting goods retailer said its Q1 sales advanced 6 percent, to $1.7 billion, from $1.6 billion in the comparable period, topping market watchers’ forecasts for sales of $1.6 billion. Same-store sales improved 0.5 percent in the quarter, in line with expectations.
Q1 net income slid 10 percent, to $57 million, or 50 cents per diluted share, from $63 million, or 53 cents per diluted share, in the prior year. But, the results were a penny above analysts’ estimates for diluted earnings per share of 49 cents.
Dick’s chairman and CEO Edward Stack said he was pleased with the firm’s Q1 results but cautioned that near-term pressures from liquidation sales by its bankrupt competitors will weigh on short-term revenues.
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The firm downward adjusted its FY16 outlook and now expects full-year EPS of $2.60 to $2.90, down from $2.85 to $3. Dick’s forecasts comps in the range of -1 percent to 1 percent, down from flat to 2 percent.
Further down the line, however, Stack said its competitors’ challenges will be a boon to business.
“Over the past several months, City Sports in Boston has liquidated, [Sport Chalet] announced the closing of all of their stores [and] the Sports Authority is in the midst of liquidating [and] closing their 400-plus stores [while] others are evaluating strategic alternatives,” Stack said during the company’s conference call. “Although it’s a mess, it’s a great opportunity for Dick’s Sporting Goods … Once this consolidation works its way through the system, we are poised to pick up significant market share.”
Stack added, “We’re in the process of executing plans to ensure market share comes to Dick’s Sporting Goods.”
Reports have suggested that Dick’s will likely bid on several Sports Authority stores that will go up for sale.
In Q2, the company expects EPS of 62 cents to 72 cents and comps to slip as much as 4 percent.