Winter fails to freeze Dick's Sporting Goods in Q4
Inclement weather has hurt some retailers’ quarterly sales results, but it has been no match for Dick’s Sporting Goods. The company’s fourth-quarter results exceeded the upper end of guidance range it provided in its third quarter press release.
Dick’s Sporting Goods reported consolidated net income of $138.6 million, or $1.11 per diluted share, for the 13-week period ended Feb. 1, exceeding its expectations of $1.04 to 1.07 per diluted share. Results also exceeded the company’s performance in last year’s fourth quarter, which had an additional week. For the 14-week period ended Feb. 2, 2013, the company reported consolidated net income of $129.7 million, or $1.03 per diluted share.
The company reported a net sales increase for the quarter of 7.9% to $1.9 billion compared to the prior-year quarter. On a 13-week to 13-week basis, net sales increased 12.5%. Adjusted for the additional week last year’s fourth quarter, consolidated same-store sales increased 7.3% — compared to last year’s increase of 1.2% — although the company was expecting a 3 to 4% increase. Adjusted same-store sales in the quarter for Dick’s Sporting Goods stores increased 7.9% while same-store sales at Golf Galaxy decreased 11.7%. E-commerce penetration for the quarter was 12.2% of total sales.
"We generated strong results in our fourth quarter, with record earnings per share of $1.11, above the upper end of the guidance range we provided in our third quarter press release, as our sales and merchandise margin exceeded our expectations," said chairman and CEO Edward W. Stack. "As we look to 2014, we believe our robust and growing omnichannel network and exciting merchandising opportunities will support double-digit growth in earnings."
In the fourth quarter, the company opened six new Dick’s Sporting Goods stores, one new True Runner store and closed three underperforming Golf Galaxy stores. The company also remodeled one Dick’s Sporting Goods store during the fourth quarter. As of Feb. 1, the company operated 558 Dick’s Sporting Goods stores in 46 states, with approximately 30.1 million sq. ft. and 79 Golf Galaxy stores in 29 states, with approximately 1.4 million sq. ft.
Looking ahead, the company anticipates reporting consolidated earnings per diluted share of approximately $0.51 to 0.53 in the first quarter of 2014, based on an estimated 124 million diluted shares outstanding. It also expects consolidated same-store sales to increase 3 to 4% in the first quarter of 2014, compared to a 3.8% decrease in the first quarter of 2013, adjusted for the shifted retail calendar due to the 53rd week in 2012. The company plans to open approximately eight Dick’s Sporting Goods stores, relocate one Dick’s Sporting Goods store and relocate one Golf Galaxy store in the first quarter of 2014.
For the full year, the company expects to open approximately 50 Dick’s Sporting Goods stores, relocate six Dick’s Sporting Goods stores and remodel five Dick’s Sporting Goods stores in 2014. The company also expects to open approximately eight Field & Stream stores, relocate two Golf Galaxy stores and open one Golf Galaxy store in 2014.