Dick's Sporting Boosts 2013 EPS Outlook As Q3 Results Tops Estimates

(RTTNews) - Sporting goods retailer Dick's Sporting Goods, Inc. (DKS) reported Tuesday a profit for the third quarter that was relatively flat with last year, with both adjusted earnings per share and quarterly revenues topping analysts' expectations. The company also maintained its earnings guidance for the fourth quarter, but raised the low end of its earnings forecast range for the full-year 2013.

"Despite the continued challenging consumer environment, we delivered better than expected results in the third quarter, exceeding both our sales and earnings expectations. The marketing efforts, improved customer experience and selective pricing initiatives we began in the third quarter were successful in driving traffic and sales, but at slightly lower than anticipated margins," Chairman and CEO Edward Stack said in a statement.

The Pittsburgh, Pennsylvania-based company reported net income of $49.98 million or $0.40 per share for the third-quarter, compared to $50.14 million or $0.40 per share in the prior-year quarter.

On average, 30 analysts polled by Thomson Reuters estimated the company to report earnings of $0.39 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 6.7 percent to $1.40 billion from $1.31 billion in the same quarter last year, and topped twenty-five Wall Street analysts' consensus estimate of $1.37 billion.

The sales growth was attributable to a 5.1 percent increase in consolidated comparable store sales, the opening of new stores, as well as strong e-commerce sales. e-Commerce penetration for the quarter was 6.5 percent of total sales.

Adjusted for the shifted calendar, due to the 53rd week in 2012, consolidated same store sales increased only 3.3 percent.

Gross profit for the quarter rose to $424.90 million from the year-ago quarter's $406.12 million, while gross margin contracted to 30.34 percent from last year's 30.95 percent.

Looking ahead to the fourth quarter, Dick's Sporting continues to anticipate earnings in a range of $1.04 to $1.07 per share. Analysts expect the company to report earnings of $1.06 per share for the quarter.

Comparable store sales for the first quarter are expected to increase about 2 to 3 percent or 3 to 4 percent on an adjusted basis for the shifted calendar, due to the 53rd week in 2012.

For fiscal 2013, the company currently projects adjusted earnings in a range of $2.62 to $2.65 per share, up from the earlier outlook of $2.60 to 2.65 per share. Street is currently looking for full-year 2013 earnings of $2.64 per share.

However, consolidated same store sales is still expected to be about flat to an increase of 1 percent on a 52-week comparative basis.

"We remain excited about the long-term opportunities in our business that we presented at our analyst day in September, and we will continue to drive towards those goals," Stack added.

DKS closed Monday's regular trading session at $56.37, up $0.20 on a volume of 2.26 million shares.