NEW YORK — Few sporting goods retailers were exempt from unseasonal weather during the first quarter, and few did better despite that challenge than Dick’s Sporting Goods, which salvaged profit and sales gains despite a small decline in comparable-store sales.
For the three months ended May 3, the Pittsburgh-based company said net income shot up 40.6 percent to $6.7 million, or 28 cents, versus $4.2 million, or 24 cents, a year ago. Earnings per share eclipsed the Wall Street forecast by 2 cents.
Sales for the quarter grew 10.2 percent to $304.7 million from $276.6 million even as comps slid 0.9 percent.
“Sales in the first quarter started off below our plan due to the extended winter weather throughout the majority of our markets,” said chief executive officer Edward Stack in a statement. “However, as the weather warmed up, we saw the expected strength in our sales results, which continued through the end of the quarter. We also were able to continue the growth of our gross margin rates, resulting in earnings in excess of our previous guidance.”
Looking ahead, Dick’s reaffirmed its full-year guidance of net income of $48 million, or $1.95, with comps up 2 to 3 percent.
In Plainfield, Ind., Galyan’s Trading Co. Inc. registered a first-quarter net loss of $2.6 million, or 15 cents a share, versus $414,000, or 2 cents. The loss includes a $282,000, or 2 cent, aftertax reduction because of the reclassification of advertising allowances received from vendors. The performance was in line with Galyan’s most recent guidance, but 1 cent worse than analysts’ consensus estimate.
Net sales rose 14.2 percent, to $129.6 million from $113.5 million, as comps faded 6.3 percent. Gross margins dropped to 26 percent from 27.8 percent while the selling, general and administrative expense ratio rose to 28.9 percent of sales from 28 percent a year ago.
Galyan’s expects second-quarter sales of between $171 million and $177 million with comps tracking downward in the low-single digits. EPS, including a 2 cent reduction because of reclassified advertising expenses, should land between 16 and 22 cents.
Birmingham, Ala.-based Hibbett Sporting Goods Inc. also managed to have a good quarter despite difficulties at retail as net income rose by almost a quarter, or 24.6 percent, to $5.3 million, or 51 cents, from $4.2 million, or 41 cents, in the 2002 quarter. Earnings per share bested analysts’ estimates by 2 cents. Sales for the period ended May 3, climbed 12.4 percent to $79.6 million from $70.8 million a year ago, and comps reversed the industry trend to increase 4.5 percent.
“Continued momentum in our footwear category and strong sales in licensed apparel led to the better-than-expected sales and earnings results,” said ceo Mickey Newsome in a statement. “We believe these results are the product of targeted merchandising, contributions from both new and existing stores, company-wide dedication to low-cost operations and a small-market focus.”
Los Angeles-based Sport Chalet Inc. realized a more than 20-fold increase in net income in its fourth quarter ended March 31 as improvements in gross margin offset higher SG&A expenses. Net income landed at $53,000, or 1 cent a diluted share, versus $2,000, or no cents, in the prior year’s final quarter.
Sales expanded 1.6 percent to $58.2 million from $57.3 million in the 2002 period as comps fell 4 percent. Gross margin improved 130 basis points, to 27.6 percent of sales, but SG&A ratio went up the same amount, to 27.4 percent from 26.1 percent.
Sport Chalet said sales rose 7.4 percent, and were up 0.9 percent on a comp basis, when winter merchandise was excluded. Noting stagnation at retail, the war in Iraq and “the impact of back-to-back years of warm and dry winter weather conditions in our primary markets,” Craig Levra, ceo, pointed out that, “despite this, we were able to show earning increases over last year in three of the four quarters this year, while continuing to execute our strategic objectives and enhancing our infrastructure to support growth in the short and long term.”
For the 12 months, Sport Chalet’s earnings declined 13.2 percent, to $4.2 million, or 60 cents a diluted share, from $4.8 million, or 69 cents, as improved margins failed to erase increases in SG&A.
However, sales rose 4.7 percent, to $238 million from $227.3 million, as comps declined 0.9 percent. Excluding winter merchandise, full-year sales figures were comparable to those for the fourth quarter.