A Dick sporting goods store
Craig Warga | Bloomberg | Getty Images
Dick’s sporting goods on Tuesday exceeded Wall Street’s fourth-quarter estimates as shoppers continued to buy equipment and clothing for outdoor activities and workouts at home during the pandemic.
However, shares fell about 7% in pre-market trading, as the company predicts sales trends are likely to slow.
The sporting goods retailer estimated that in-store sales could decline to 2% or grow to 2% the following year, a significant drop in in-store sales growth of almost 10% during fiscal year 2020. Sales for the following year are estimated to range from $ 9.54 to $ 9.994 billion, roughly flat compared to its net sales of $ 9.58 million in 2020.
That’s how the company did during the fourth fiscal quarter that ended Jan. 30. compared to what analysts expected, according to Refinitiv data:
- Earnings per share: $ 2.43 adjusted versus $ 2.28 expected
- Revenue: $ 3.133 billion, while $ 3.07 million was expected
Dick’s reported fourth-quarter net income of $ 219.6 million, or $ 2.21 per share, above $ 69.8 million, or 81 cents per share, a year earlier. Excluding the single charges, the company earned $ 2.43 per share, better than the $ 2.28 expected by analysts.
Net sales amounted to $ 3.133 billion, up from $ 2.61 billion a year earlier, above the $ 3.07 billion forecast by analysts.
In-store sales rose 19.3% in the fourth quarter, better than the 17.1% growth expected by a StreetAccount survey. E-commerce sales grew 57% during the period.
Dick’s sales have risen during the pandemic as shoppers bought golf clubs, training tops and other items to keep fit and spend time during the pandemic. Active clothing has been a popular but increasingly competitive category as retailers such as Gap-owned Target, Kohl, Athleta and Lululemon compete for more market share.
Dick will increase investment next year to $ 275 million to $ 300 million, above its total capital expenditures of $ 167 million and $ 180 million in 2020 and 2019, respectively.
CEO Lauren Hobart, who took office in February, said the retailer wants to capitalize on trends, such as consumer demand for outdoor activities. He said the fiscal year has started strongly.
“It is clear that our strategies in recent years are working and have prepared us for long-term success,” he said in a press release.
Next year, Dick’s said it plans to open six new stores and six specialty stores. Along with its sporting goods stores outside the mall, the retailer operates Galaxy Galaxy and Field & Stream stores.
The company said it plans to recover at least $ 200 million of its shares this year.
At the market close on Monday, Dick’s shares rose about 119% over the past year. The market value of the company is $ 6.878 billion.
Read the full press release here.