Dick's Sporting Goods (DKS 42.07, -5.50) has slid 11.6% in pre-market, as disappointing comparable store sales overshadow in-line earnings. Today's decline puts the stock at a fresh low for the year and it comes just days after the company admitted to overstating its adjusted earnings before interest, tax, depreciation, and amortization in its quarterly report that was released at the end of January.
For the first quarter, the sporting goods retailer reported in-line earnings of $0.54 per share on a 9.9% year-over-year increase in revenue to $1.83 billion, which also matched expectations. However, comparable store sales grew just 2.4%, which was shy of guidance for growth between 3.0% and 4.0%. Consolidated same store sales increased 0.5%.
Gross margin declined to 29.69% from 29.86% one year ago while adjusted EBITDA increased 6.0% to $149.47 million.
Dick's CEO Edward Stack noted that the company faced a challenging retail environment in the first quarter, but still realized growth across each of its three product categories. eCommerce sales grew 11.0% with eCommerce penetration increasing to 9.3% of total sales from 9.2% of total sales one year ago.
The retailer remains in expansion mode, having opened 15 new Dick's Sporting Goods stores during the quarter. Two Field & Stream stores and eight Golf Galaxy stores were opened during the quarter while two Dick's locations and one Golf Galaxy location were closed. The company ended the quarter with 691 Dick's Sporting Goods stores in 47 states, 98 Golf Galaxy stores in 32 states, and 29 Field & Stream stores in 14 states.
Dick's Sporting Goods expects a strong second quarter, priming the market for above-consensus earnings between $1.02 and $1.07 per share on comparable sales growth of 2.0-3.0%. The upbeat outlook for the second quarter has not had an impact on guidance for the full year, which was reaffirmed. The company expects full year earnings between $3.65 and $3.75 per share, but comparable store sales growth guidance was lowered to a range of 1.0-3.0% from 2.0-3.0%.