dick’s sporting goods The company raised its dividend by 10% on Thursday as it reported its largest sales quarter in history and forecast another year of growth.
The company’s shares rose more than 15% intraday.
Chief Executive Lauren Hobart said on an earnings call Thursday that Dick’s sales growth came from larger tickets — either higher prices or more expensive merchandise — because Its trading volume was flat.
Many retailers benefited from the 53rd week of fiscal 2023, but Dick’s said it still broke records in its fiscal fourth quarter even without those extra days.
Here’s how the sportswear retailer performed compared to Wall Street expectations, according to a survey of analysts by LSEG (formerly Refinitiv):
- Earnings per share: Adjusted $3.85, $3.35 expected
- Revenue: $3.88 billion, $3.80 billion expected
The company’s net income for the three-month period ended Feb. 3 was $296 million, or $3.57 a share, compared with $236 million, or $2.60 a share, a year earlier. Excluding one-time items related to impairment charges and inventory write-offs, Dick’s reported earnings of $3.85 per share.
Sales increased to US$3.88 billion, an increase of approximately 8% from US$3.6 billion in the same period last year.
“Leveraging our industry-leading assortment and strong execution, we ended the year with an incredibly strong fourth quarter and holiday season,” Hobart said in a statement.
“We are set for another strong year in 2024. We plan to grow our sales and revenue through aggressive competition, higher merchandise margins and productivity improvements,” she added.
StreetAccount data showed that same-store sales grew 2.8% in the quarter, much higher than analysts’ expectations of 0.8%. Executive chairman Ed Stark said the growth was driven by “transaction growth” and market share gains.
Dick’s expects fiscal 2024 earnings per share to be between $12.85 and $13.25, compared with expectations of $12.90, according to LSEG. Revenue is expected to be between $13 billion and $13.13 billion, roughly in line with expectations of $13.13 billion, according to LSEG.
The company expects same-store sales to grow by 1% to 2%.
Following strong quarterly results, Dick’s raised its quarterly dividend 10% to $1.10 per share.
While Dick’s expects 2024 profits to broadly match or exceed Wall Street expectations for 2024, the company said it expects to face some challenges this quarter. Chief Financial Officer Navdeep Gupta said the company expected gross margins to trend “unfavorably” compared with the same period last year due to higher attrition rates.
This industry term covers the loss of inventory due to factors such as internal or external theft and damage. Dick cited contraction when he cut his profit forecast last year.
Hobart said during a conference call Thursday that the company is “working with loss prevention, local law enforcement and moving high-loss products to the back of the store.”
Heading into the holiday season, Dick’s raised its full-year sales and earnings outlook but was cautious about the critical holiday shopping period, repeatedly saying it was optimistic about things “that are within our control.”
“We’re conservative on the lower end of our guidance,” Hobart said on a conference call with analysts after Dick’s third-quarter results were released. “We competed with everyone in the world in the fourth quarter, and consumers went through There’s a lot going on and we’re just trying to be cautious.”
Read the full earnings report here.
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