Dick's Sporting Goods (DKS 51.00, -1.61) has given up 3.1% in pre-market, as cautious guidance overshadows a bottom line beat and a dividend boost.
The sporting goods retailer reported above-consensus earnings of $1.32 per share on a 10.9% year-over-year increase in revenue to $2.48 billion, which matched expectations.
Consolidated same store sales grew 5.0%, which was on the upper end of the company's estimate for growth between 3.0% and 6.0%. Same store sales for Dick's locations grew 5.3% while Golf Galaxy same store sales jumped 13.2%.
The company has made moves to capitalize on strong growth in Golf Galaxy sales. The company acquired 30 Golfsmith stores that will be converted to the Golf Galaxy brand. Dick's closed 13 Golf Galaxy stores during the quarter, but ten of those stores were located close to acquired Golfsmith stores.
Like other retailers who have to contend with Amazon (AMZN 846.01, -0.60), Dick's has conducted an increasing share of its business online. Accordingly, 17.9% of the company's fourth quarter net sales came from online channels, up from 15.7% one year ago. For the full year, eCommerce penetration was 11.9%, up from 10.3% one year ago.
Dick's expects to see some challenges in fiscal year 2018, evidenced by the company's guidance. First quarter earnings are expected between $0.50 and $0.55 per share, which is below current market expectations. Similarly, full year guidance for earnings between $3.65 and $3.75 per share also falls short of market estimates.
Hoping to offset some of the disappointment, the company announced that its Board of Directors approved a 12.0% increase to its quarterly dividend, which is now at $0.17 per share.
Shares of Dick's trade at levels that have been revisited on multiple occasions since 2012. Year-to-date, the stock is down 4.0% versus a 6.1% gain in the S&P 500. This leaves shares about ten points below a record high from December.