Dick’s Sporting Goods shares soar on earnings beat, retailer hikes outlook

Shares of Dick’s Sporting Goods jumped Wednesday after the company reported quarterly earnings that topped analysts’ estimates and raised its full-year outlook.

The sporting goods retailer’s stock was up as much as 6.2% in premarket trading on the news, having climbed about 18% over the past 12 months. More recently, it was trading up more than 3%. 

In the latest quarter, it reported net income of $57.5 million, or 61 cents a share, compared with $60.1 million, or 59 cents a share in the earlier period.  

After excluding asset impairment costs and a legal settlement, the company earned 62 cents a share, topping the 58 cents a share, analysts surveyed by Refinitiv were predicting. 

Sales inched up 0.6% to $1.92 billion, which was higher than the $1.9 billion analysts estimated.

For the year, Dick’s says it now expects to earn, on an adjusted basis, between $3.20 and $3.40 a share, up from a previous range of $3.15 to $3.35.

CEO Ed Stack said same-store sales at Dick’s “turned positive in March and remained positive in April, as we started to see the benefits of our key strategies and investments.” Overall, for the quarter, same-store sales were flat, compared with a drop of 2.5% during the same period a year ago. Analysts were calling for a drop of 1.3% this quarter.

Online sales were up 15% during the first quarter, the company said.

Bank of America had predicted in a note to clients earlier this week that it was expecting Dick’s to get back to same-store sales growth in the second quarter. The analyst cited fewer headwinds in the hunting category, shipments from Nike and Adidas of popular footwear styles like the Nike Air Max 720 and the Adidas Ultraboost 19 and “continued strength in outdoor equipment as Dick’s continues to elevate its product assortment with key brands such as YETI ” for the more upbeat outlook. 

Dick’s hunting sales suffered when the company was one of the first retailers to stop selling assault rifles and high-capacity magazines. It also banned the sale of guns to people under the age of 21, after a massacre at a Florida high school in February 2018. 

But Stack hasn’t backed down on his decision, and is actually leaning even more into it. During the third quarter last year, as a trial, Dick’s removed nearly all hunting products from 10 stores, replacing them with baseball gear and other licensed sports merchandise. In March, Dick’s said it would grow this initiative, eliminating guns and other hunting products from 125 locations this year.