Ahead Of Dicks Sporting Goods' Q4 Results

(RTTNews) - Sporting goods retailer Dicks Sporting Goods Inc. (DKS) saw strength in lifestyle camping, paddle sports and sport games, offset by a decline in hunting in the last quarter. It expects the hunt business to remain under pressure in the fourth quarter, based on recent trends and an anticipated promotional environment.

The company is likely to release its fourth-quarter results before the bell on Tuesday, March 1, with analysts polled by Thomson Reuters estimating earnings of $1.15 per share on revenue of $2.29 billion for the quarter. Analysts' estimate typically exclude certain special items.

Dicks Sporting continues to invest in strengthening the reach, frequency and effectiveness of its marketing, in order to offer the best assortment and customer experience in store. During the beginning of the fourth quarter, the company completed its 2015 store development program, bringing the store count to 646 DICK'S stores and 19 Field & Stream stores, including four combo store locations.

For the fourth quarter of 2015, the company sees earnings in the range of $1.10 - $1.25 per share, and same-store sales in the range of negative 2% - positive 1%. Operating margin is expected to decrease driven by gross margin contraction, primarily due to lower expected merchandise margin in anticipation of a more promotional holiday season, as well as SG&A deleverage.

For the full year 2015, Dicks Sporting lowers its non-GAAP earnings guidance to a range of $2.85 - $3 per share from the prior estimation of $3.13 - $3.21 per share. The company expects same-store sales to be approximately flat to an increase of 1%. Thirty Wall Street analysts have a consensus earnings estimate of $2.90 per share for fiscal 2015.

Gross margin for 2015 is expected to decline, primarily driven by occupancy deleverage, increased shipping expense as a percentage of sales, due to the growth of eCommerce business, and lower merchandise margin.

In the last quarter...

The company reported consolidated net income of $47.2 million or $0.41 per share compared to $49.2 million or $0.41 per share last year.

Excluding a litigation settlement charge in the current year, net income was $51.9 million or $0.45 per share.

Net sales for the third quarter of 2015 grew 7.6% to about $1.6 billion. Consolidated same store sales increased 0.4%, compared to the company's guidance of an increase of 1% - 3%. Same store sales for DICK'S Sporting Goods increased 0.7%, while Golf Galaxy decreased 2.9%. Third quarter 2014 consolidated same store sales increased 1.1%. "Our positive same store sales for the quarter reflected a strong back-to-school selling season tempered by slowing trends later in the quarter. Strength in athletic footwear, accessories and athletic apparel was moderated by the impact of record warm weather in more seasonal categories," said Edward Stack, Chairman and CEO. "With strong operational discipline, we generated earnings per share within our guided range."