DICK'S Sporting Goods (DKS 25.03, -1.29) is down 4.9% in pre-market as cautious guidance for fiscal year 2018 overshadows better than expected earnings and upbeat guidance for the holiday quarter.
The sporting goods retailer reported above-consensus third quarter earnings of $0.30 per share on a 7.4% year-over-year increase in revenue to $1.94 billion, which also surpassed expectations.
The company noted that while fourth quarter earnings are expected to exceed estimates, coming in between $1.12 and $1.24 per share, earnings for fiscal year 2018 will be pressured by efforts to solidify the company's market position. DICK'S guidance calls for a 20.0% year-over-year decline in full year earnings to $2.38 per share, which is shy of market expectations. The company expects that investments made during the fiscal year will lead to better results down the road.
During the third quarter, consolidated same store sales declined 0.9% while the company's guidance called for a low single-digit decrease. Consolidated same store sales during the third quarter of 2016 increased 5.2%.
Like most other retailers, DICK'S has been conducting an increasing share of its business online. eCommerce sales increased 16.0% during the third quarter, representing 10.3% of total sales, up from 9.6% of total sales one year ago.
The company opened 15 DICK'S Sporting Goods Stores, bringing its total to 719 stores across 47 states. Six new Field & Stream stores were opened, increasing the store count to 35 locations across 16 states. Two specialty concept stores were closed during the third quarter. DICK'S ended the quarter with 98 Golf Galaxy stores across 32 states in its portfolio.
Inventory increased 4.1% year-over-year to $2.18 billion.