Dick’s Sporting Goods reported earnings and sales in the first quarter topped Wall Street expectations but reduced its guidance for the year due to “macroeconomic” challenges.

Highlights Of The Quarter

  • Comparable store sales declined 8.4 percent;
  • Net sales of $2.7 billion increased 41 percent versus the first quarter of 2019;
  • Delivered earnings per diluted share of $2.47 and non-GAAP earnings per diluted share of $2.85, reflecting pre-tax income as a percentage of net sales of 12.3 percent;
  • Exchanged $100 million aggregate principal amount of senior convertible notes and unwound the corresponding portion of the convertible bond hedge and warrants for a combination of cash and shares, ending the first quarter with cash and cash equivalents of approximately $2.3 billion; and
  • Updated full-year 2022 outlook to reflect the impact of evolving macroeconomic conditions.

Sales of $2.7 billion topped Wall Street’s consensus target of $2.63 billion. EPS on an adjusted basis of $2.85 was ahead of Wall Street’s consensus estimate of $2.53.

“We are pleased with our first-quarter results as our team continued to move with agility and execute well in a highly dynamic environment,” said Lauren Hobart, president and chief executive officer. “Over the past two years, we have demonstrated our ability to adeptly manage through the pandemic and other challenges, and we are confident in our continued ability to adapt quickly and execute through uncertain macroeconomic conditions. Dick’s has a unique and powerful position in the marketplace, and we remain confident in our strategies and our ability to deliver long-term sales and earnings growth.”

In the quarter ended April 30, sales reached $2,700.2 million, down 7.5 percent year over year. Comparable store sales were down 8.4 percent against a gain of 117.1 percent a year ago.

Net income was down 28.0 percent to $260.6 million, or $2.47 a share. On a non-GAAP basis, net income declined 29.0 percent to $260.6 million, or $2.85.

In the fiscal 2022 period, there were no non-GAAP adjustments to reported income before income taxes or net income. In the fiscal 2021 period, there were non-GAAP adjustments due to the amortization of the debt discount associated with the convertible senior notes.

Inventories were $2.82 billion in the latest quarter against $2.01 billion a year ago, an increase of 40.4 percent.

Dick’s Full Year 2022 Outlook

  • EPS in the range of $7.95 to $10.15, which includes a minimum of $300 million of share repurchases. Previously, GAAP EPS was projected in the range of $9.96 to 11.13 against $13.87 a year ago and included a minimum of $200 million of its share repurchases.
  • Non-GAAP EPS in the range of $9.15 to 11.70. Previously, non-GAAP EPS was projected in the range of $11.70 to 13.10 against f $15.70 in fiscal 2021. Both periods are adjusted for interest expense and share dilution relating to its convertible senior note.
  • Comparable store sales to be in the range of negative 8 percent to negative 2 percent. Previously, consolidated same-store sales were projected to be in the range of negative 4 percent to flat.
  • Capital expenditures in the range of $400 to 425 million on a gross basis and $340 to 365 million on a net basis. Capital expenditures expectations remained the same as previous guidance. In fiscal 2021, capital expenditures were $308 million on a gross basis and $268 million on a net basis.

Photo courtesy Getty