Shares of Dick’s Sporting Goods surged after the company reported quarterly earnings that beat forecasts and raised its full-year outlook. Climbing 18% over last year, the retailer’s stock was up 6.2% initially and was again 2.1% in premarket trading.
Key highlights of the quarter include: net income of $57.5 million, or 61 cents per share versus $60.1 million or 59 cents a share a year earlier; increase in sales by 0.6% to $1.92 billion higher than expected $1.9 billion; expected adjusted full-year earnings of $3.20 to $3.40 up from previous range of $3.15 to $3.35; flat overall same-store sales compared to a drop of 2.5% a year earlier; and online sales increased by 15%.
Dick’s same-store sales growth is expected to recover in the second quarter as it continues to elevate its product assortment with key brands such as YETI. The company’s hunting sales took a hit when, following a high school massacre in Parkland, Florida, it stopped selling guns to people under the age of 21. During Q3 last year, as a trial Dick removed all its hunting products from 10 stores replacing them with baseball gear and other licensed sports merchandise. The company is set to further remove hunting products from 125 other locations this year.
Overall, the results indicate that Dick’s sales have been stabilizing but it still needs more work to drive up margins by rolling out more own-brand products.