Dick’s Sporting Goods’ New Merchandising Strategy Is Working

Shares of Dick’s Sporting Goods are climbing in premarket trading after the athletic retailer posted earnings and revenues that handily topped analysts’ estimates.

The company’s stock shot up more than 10% ahead of the opening bell on Thursday, with investors upbeat on second-quarter earnings per share of $1.26 — compared with the prior year’s $1.20 a share and better than forecasts of $1.21. Dick’s saw sales grow 3.7% to $2.26 billion, versus consensus bets of $2.21 billion. Profits, however, declined 5.8% to $112.5 million.

The report comes at a time when the Coraopolis, Penn.-based firm continues to reassess its “hunt” business, which includes firearms. During last year’s Q3 period, Dick’s removed hunting products from 10 stores where the category was underperforming and replaced them with other merchandise, leading to positive comp sales and strong margins in those locations.

This quarter, the retailer’s same-store sales increased 3.2% — its strongest showing since 2016. It is also amping up its digital platform, with sales in the category rising 21%. (Dick’s opened two e-commerce fulfillment centers in the past week.)

“We saw growth across each of our three primary categories of hardlines, apparel and footwear, our brick-and-mortar stores comped positively and our e-commerce channel remained strong,” said chairman and CEO Ed Stack. “Our key strategies and investments are working, our major headwinds are behind us and we’ve bent the curve on sales.”

The positive numbers led the retailer to lift its full-year outlook, now expecting earnings per share in the range of $3.30 to $3.45, up from the previous view of $3.20 to $3.40. According to Dick’s, the new guidance includes the impact of President Donald Trump’s fourth tranche of tariffs — a 10% levy that will hit $300 billion worth of Chinese imports this year. (The first round of additional duties goes into effect on Sept. 1 followed by another on Dec. 15.)

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