Dick’s Sporting Goods has caught the warm weather bug that has plagued many retailers this fall. The retail chain missed earnings and sales estimates for the third quarter and cut its earnings forecast, pushing the stock down over 16 percent in early trading to $34.33, the lowest level since 2012.
Dick’s delivered earnings per share of 45 cents, which was a penny short of the estimated 46 cents a share and at the low-end of the guidance range. Net income for the quarter was $49.2 million; excluding a litigation settlement charge it was $51.9 million.
Net sales for the third quarter increased 7.6 percent to $1.64 billion an increase of 7.6 percent, but were shy of the FactSet estimate of $1.66 billion.
“Our positive same-store sales for the quarter reflected a strong back-to-school selling season tempered by slowing trends later in the quarter. Strength in athletic footwear, accessories and athletic apparel was moderated by the impact of record warm weather in more seasonal categories,” said Edward W. Stack, chairman and chief executive officer. “With strong operational discipline, we generated earnings per share within our guided range.”
It’s clear that the sport of golf is losing favor as sales at Golf Galaxy fell 2.9 percent. So far this year the company has closed three Golf Galaxy stores and relocated another one. In the third quarter, Dick’s opened 27 Sporting Goods stores and seven Field & Stream stores.
Looking ahead, the company expects full-year results for earnings per share to be in the range of $2.85 to $3.00, excluding the litigation settlement charge. Consolidated same-store sales are expected to be flat to an increase of 1 percent, which is lower than 2014’s increase of 2.4 percent.
Stack continued, “As we look to the fourth quarter, we anticipate a more promotional environment. Our focus will be to actively manage our inventory levels, while continuing to take the appropriate actions to win share and strengthen our business for the long-term.”