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Last Update: 11-Mar-13 07:45 ET
Dicks Sporting Goods fall 6% following miss on earnings
Dicks Sporting Goods (DKS $47.98 -3.02) reported fourth quarter earnings of $1.03 per share, $0.03 worse than the Capital IQ consensus of $1.0, while revenues rose 12.0% year/year to $1.81 billion versus the $1.86 bln consensus, driven by the growth of the store network, a 1.2% increase in consolidated same store sales on a 13-week to 13-week basis, and the inclusion of the 14th week of sales. The 1.2% consolidated same store sales increase consisted of a 2.2% decrease at Dick's Sporting Goods stores, a 1.3% increase at Golf Galaxy and a 54.2% increase in the eCommerce business. By chain, including eCommerce business, Dick's Sporting Goods same store sales increased 1.2% and Golf Galaxy same store sales increased 1.3%. "In the fourth quarter, we experienced continued momentum in athletic footwear and apparel along with strong sales in hunting that exceeded our expectations.
These increases were partially offset by lower-than-anticipated sales in outerwear and cold weather accessories, as well as a significant decline in the fitness category. As a result of the unusually warm weather conditions, including during peak selling periods in December, we significantly reduced our inventory levels of cold weather merchandise to align with lower consumer demand and avoid carrying over excess inventory after a second year in a row of warm weather. While this was a prudent move that enabled us to effectively manage inventory and protect our margins, it did limit our ability to capture sales in January when temperatures dropped and snowfall increased. In fitness, the significant comp decline was a result of lower large-equipment sales like treadmills and ellipticals. We understand the issues that contributed to the sales decline and are taking action to correct them." The company issued downside guidance for the first quarter with EPS of $0.47-0.49 versus the $0.50 consensus and consolidated same store sales adjusted for the shifted calendar due to the 53rd week in 2012 are currently expected to be ~negative 2% to negative 1% in the first quarter of 2013, or approximately flat to 1% not adjusted, as compared to an 8.4% increase in 1Q13. The company issued downside guidance for fiscal year 2014 with EPS of $2.84-2.86 versus the $2.92 consensus and the company expects investments to have a $0.12 impact on EPS in FY14; consolidated same store sales are currently expected to increase approximately 2 to 3% on a 52-week to 52-week comparative basis, compared to a 4.3% increase in fiscal 2012. The company announced that its Board of Directors authorized a share repurchase program of up to $1 billion of the Company's common stock over the next five years.
These increases were partially offset by lower-than-anticipated sales in outerwear and cold weather accessories, as well as a significant decline in the fitness category. As a result of the unusually warm weather conditions, including during peak selling periods in December, we significantly reduced our inventory levels of cold weather merchandise to align with lower consumer demand and avoid carrying over excess inventory after a second year in a row of warm weather. While this was a prudent move that enabled us to effectively manage inventory and protect our margins, it did limit our ability to capture sales in January when temperatures dropped and snowfall increased. In fitness, the significant comp decline was a result of lower large-equipment sales like treadmills and ellipticals. We understand the issues that contributed to the sales decline and are taking action to correct them." The company issued downside guidance for the first quarter with EPS of $0.47-0.49 versus the $0.50 consensus and consolidated same store sales adjusted for the shifted calendar due to the 53rd week in 2012 are currently expected to be ~negative 2% to negative 1% in the first quarter of 2013, or approximately flat to 1% not adjusted, as compared to an 8.4% increase in 1Q13. The company issued downside guidance for fiscal year 2014 with EPS of $2.84-2.86 versus the $2.92 consensus and the company expects investments to have a $0.12 impact on EPS in FY14; consolidated same store sales are currently expected to increase approximately 2 to 3% on a 52-week to 52-week comparative basis, compared to a 4.3% increase in fiscal 2012. The company announced that its Board of Directors authorized a share repurchase program of up to $1 billion of the Company's common stock over the next five years.
