Dick’s Sporting Goods Inc. stock is popping over 8 percent to $59.60 in pre-market trading after the retailer topped its own expectations for the second quarter and also beat analysts’ projections.
Net income for the quarter rose 4.65 percent to $91.4 million, or 82 cents a diluted share, up from $90.8 million, or 77 cents, a year ago. Dick’s had forecast earnings in the range of 62 to 72 cents a share and FactSet analysts were expecting earnings of 69 cents a share.
Net sales for the three months ending July 30 increased 7.9 percent to $2 billion from $1.8 billion a year earlier. The FactSet estimate was for sales of $1.8 billion.
“We are pleased with our second-quarter results, particularly in light of the liquidation activity in the market,” said Edward W. Stack, chairman and chief executive officer. “Looking ahead, we are focused on capturing the displaced market share and remain confident in our ability to strengthen our leadership position.”
Consolidated same-store sales increased 2.8 percent, a big switch from the company’s guidance of negative 4 percent to negative 1 percent. Breaking it down, Dick’s comp sales increased 3 percent, while Golf Galaxy fell 4.3 percent.
Internet sales continue to grow as the penetration jumped from 7.5 percent last year to 8.5 percent this year.
Looking ahead, Dick’s is forecasting for the full year 2016 earnings per share in the range of $2.90 to $3.05. However, the company plans to take over some of the bankrupt Sports Authority stores and that could affect earnings. For now, the company doesn’t know what those costs could be. Sports Authority filed for bankruptcy this year and instead of restructuring the company, the retailer decided to liquidate assets.
The third-quarter forecast is for earnings in the range of 39 cents to 42 cents, also excluding Sports Authority costs. FactSet is estimating earning of 38 cents.
Dick’s also plans to keep opening stores with 36 new Dick’s planned for 2016 and nine new Field & Stream stores.