Dick’s Sporting Goods 4Q results miss Street
PITTSBURGH (AP) — Dick’s Sporting Goods Inc. said Monday that its fourth-quarter net income rose 17 percent, helped by an extra week and strong online sales.
But the performance missed analysts’ estimates, and the retailer provided first-quarter and 2013 earnings forecasts below Wall Street’s expectations. The stock fell more than 7 percent in premarket trading.
The company said that warm weather during December led it to significantly reduce its inventory levels of cold weather goods in order to better match up with lower consumer demand and to avoid carrying over excess inventory. Dick’s said the move helped it effectively manage inventory and protect its margins, but that it made it tougher to get sales in January when temperatures dropped and snowfall increased.
For the period ended Feb. 2, the Pittsburgh company earned $129.7 million, or $1.03 per share. That’s up from $111.1 million, or 88 cents per shares, a year earlier.
Analysts forecast earnings of $1.06 per share, according to a FactSet survey.
The current quarter’s results include about 3 cents per share for the extra week.
Revenue climbed 12 percent to $1.81 billion from $1.61 billion, benefiting from strong sales of athletic footwear, clothing and hunting products. Sales were weaker in fitness, outwear and cold weather accessories.
Wall Street expected $1.87 billion in revenue.
Shares of Dick’s declined $3.61, or 7.1 percent, to $46.99 at about 45 minutes ahead of the market open.
Revenue at stores open at least a year increased 1.2 percent. This figure is a key gauge of a retailer’s health because it excludes results from stores recently opened or closed.
The metric climbed 1.3 percent at Golf Galaxy locations. The company’s namesake store reported a 2.2 percent decline in the figure. Online sales surged 54.2 percent.
Dick’s earned $290.7 million, or $2.31 per share, for the year. In the prior year it earned $263.9 million, or $2.10 per share. Annual revenue rose 12 percent to $5.84 billion from $5.21 billion.
The company foresees 2013 earnings of about $2.84 to $2.86 per share. Analysts expected higher earnings of $2.93 per share.
Dick’s expects first-quarter earnings of approximately 47 cents to 49 cents per share. Wall Street forecasts earnings of 50 cents per share.
The sporting goods retailer also said Monday that its board approved the repurchase of up to $1 billion of its stock over the next five years.
Dick’s had 518 Dick’s Sporting Goods stores in 44 states and 81 Golf Galaxy stores in 30 states as of Feb. 2.