The overall performances of three sporting goods retailers tended to go the way of their clothing sales in the third quarter. Sector giant Foot Locker missed expectations and reported double-digit declines in U.S. apparel sales, but Dick’s and Hibbett each posted sturdy soft goods revenues and beat Wall Street expectations.
In the three months ended Oct. 31, New York-based Foot Locker Inc. recorded a loss of $6 million, or 4 cents a diluted share, compared with profits of $24 million, or 16 cents a share in 2008. The most-recent quarter included impairment charges of $22 million. Excluding such items, Foot Locker’s net totaled $16 million, or 10 cents a share. Analysts polled by Yahoo Finance had expected adjusted earnings per share of 13 cents.
Foot Locker’s sales fell 7.3 percent to $1.21 billion from $1.31 billion. On a conference call with investors, Ken Hicks, president and chief executive officer, said U.S. athletic apparel and athletic footwear comparable-store sales suffered double-digit declines in the quarter. In Europe, footwear and apparel sales were relatively flat, he said.
“I believe that improving our apparel business over time is a significant sales and profit opportunity at our company,” Hicks said. “Apparel is an area that [will] be receiving considerable focus in months ahead as we will look to deliver assortments that are more relevant for the consumer in today’s marketplace.”
Standard & Poor’s Ratings Services on Monday lowered Foot Locker’s corporate credit rating and ratings of the retailer’s unsecured debt one notch each, to “B-plus” from “BB-minus,” dragging them lower into speculative territory despite the maintenance of a stable outlook. S&P credit analyst David Kuntz said the move “reflects the moderate operational challenges due to persistent negative same-store sales and decline in the company’s credit protection measures.”
Tightened inventories, cost controls and an early drop in temperatures, meanwhile, led Dick’s Sporting Goods Inc. to more than triple its profits in the third quarter, the Pittsburgh-based retailer said.
In the three months ended Oct. 31, Dick’s posted net income of $18.9 million, or 16 cents a diluted share, compared with $6.2 million, or 5 cents a share, a year ago.
Sales in the period grew 7.1 percent to $989.8 million from $924.2 million. The company said hardlines, footwear and apparel all recorded positive comps in the quarter at its namesake stores.
The retailer’s top and bottom lines exceeded expectations on Wall Street. Analysts polled by Yahoo Finance anticipated earnings per share of 9 cents on $961.5 million in revenues, on average.
Edward Stack, chairman and ceo, said the firm benefited from a shift of cold weather product sales to the third quarter as a result of chillier temperatures versus last year.
“What’s really driving our apparel business has been the North Face product, which has been a great brand,” Stack said. “We’ve had success with some of the better Columbia product. So we haven’t seen a big deterioration in those AURs [average unit retails].”
In its third quarter, Birmingham, Ala.-based Hibbett Sports Inc. saw profits grow 14.7 percent to $8.8 million, or 30 cents a share, from $7.7 million, or 26 cents a share, a year ago.
Sales in the three months ended Oct. 31 climbed 4.1 percent to $145.9 million from $140.1 million in 2008.
Analysts had expected EPS of 24 cents on revenues of $144.2 million, on average.
Apparel and accessories both posted positive comps, the company said. The firm said its licensed apparel fell in the low-single digits in the quarter but branded apparel, led by the women’s and girls’ segments, grew in the mid-single digits. Chairman and ceo Mickey Newsome said that, like Dick’s, the firm’s North Face business had performed very well but the brand had company.
In apparel, “both Nike and Under Armour continue to perform extremely well,” Newsome said. “And we really feel good about where we are in apparel and equipment going forward. Both areas are performing at very high levels, and we expect that to go through the fourth quarter.”
The firm said it expects to post full-year EPS between 95 cents and $1.02 in January, implying fourth-quarter EPS of between 23 cents and 30 cents. Before the announcement, analyst had looked for fourth quarter earnings to equal 27 cents, on average.
Peter Kim's Los Angeles-based premium denim line has always had its finger on the pulse of youth. This season, novelty is back in a way reminiscent of early Aughts, with studs, lace-ups, racing waxed denim and more. For more highlights if some of the key brands at the Vegas trade shows, go to WWD.com. #wwdfashion (📷: Patrick Gray; Styles by @thealexbadia; Story by @karihamanaka and @marcy_wwd)
"I was driving back on Saturday afternoon from the beach, and I just saw this sign saying 'Skydiving for $95.' And I was like, I can't not sky dive for $95," says Tom Bateman about a moment in Hawaii while shooting "Snatched." #wwdeye (📷: @vsteves; Interview by @ktauer; Styled by @thealexbadia)