Dick's Sporting Q1 Results Miss Estimates, Sees Weak Q2; Cuts FY14 Outlook

(RTTNews) - Dick's Sporting Goods, Inc. (DKS) Tuesday reported a higher first-quarter profit, as sales grew about 8 percent with growth in same store sales. However, earnings per share as well as revenues missed analysts' expectations.

The sporting goods retailer forecast second-quarter earnings below estimates and cut full-year view to reflect continuation of negative trends in golf and hunting. The shares are down about 15 percent in pre-market trading.

The company said it experienced difficulties in its golf and hunting categories during the quarter. It expects the challenges in golf to continue throughout the year, while hunting sales are anticipated to stabilize and begin returning to normalized levels by the end of the year.

Edward Stack, chairman and CEO of the company said, "After a very challenging first quarter in golf last year, we expected some further headwinds and only modest improvement, but instead we saw a continued significant decline. In the case of hunting, we planned the business down based on last year's catalysts, but it was even weaker than expected."

However, the company saw exceptional growth in its eCommerce business.

For the first quarter ended May 3, 2014, the company's net income increased to $69.98 million or $0.57 per share from $64.82 million or $0.52 per share in the previous year.

Excluding a gain on sale of an asset, adjusted earnings per share were $0.50, while the company posted $0.48 per share last year.

On average, 29 analysts polled by Thomson Reuters expected the company to report earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 7.9 percent to $1.44 billion from $1.33 billion in the year-ago quarter. Wall Street expected revenues of $1.46 billion.

Consolidated same store sales increased 1.5 percent. Same store sales for Dick's Sporting Goods increased 2.3 percent, while Golf Galaxy was down 10.4 percent from the preceding year.

According to the company, significant weakness in golf and hunting overshadowed strength in athletic apparel, athletic footwear and team sports and a continued acceleration of the eCommerce business.

Looking ahead, for the second quarter 2014, the company anticipates earnings per share to be in the range of about $0.62 to 0.67, on consolidated same store sales growth of 1 to 3 percent. Analysts project second-quarter earnings of $0.82 per share.

For fiscal 2014, the company now expects consolidated adjusted earnings per share of around $2.70 to $2.85, down from the earlier outlook of $3.03 to $3.08 per share. Analysts project annual earnings per share of $3.08.

Consolidated same store sales for the fiscal are currently expected to increase about 1 to 3 percent, compared to the previous guidance of nearly 3 to 4 percent increase.

The firm expects to open about eight new Dick's Sporting Goods stores, one new Field & Stream store and relocate three Dick's Sporting Goods stores in the second quarter of 2014.

DKS closed Monday's regular trading session at $53.16. In the pre-market activity on Tuesday, the shares are down 14.88 percent.