Dick’s Sporting Goods Q1 net sales up 7.9 percent

REPORT_ Dick’s Sporting Goods reported sales and earnings results for the first

quarter ended May 3, 2014 with net sales increasing 7.9 percent to 1.4 billion dollars. Consolidated non-GAAP net income of 61.3 million dollars, or 0.50 dollars per diluted share, compared to the company's expectations provided on March 11, 2014 of 0.51 dollars to 0.53 dollars per diluted share. For the first quarter ended May 4, 2013, the company reported consolidated non-GAAP net income of 60.5 million dollars, or 0.48 dollars per diluted share.

On a GAAP basis, the company reported consolidated net income for the first quarter ended May 3, 2014 of 70 million dollars, or 0.57 dollars per diluted share. For the first quarter ended May 4, 2013, the Pittsburgh-based company reported consolidated net income of 64.8 million dollars, or 0.52 dollars per diluted share.

Consolidated same store sales increased 1.5 percent, compared to the company's guidance of an approximate 3 to 4 percent increase. First quarter 2013 consolidated same store sales decreased 3.8 percent, adjusted for the shifted retail calendar due to the 53rd week in 2012. Same store sales in the first quarter of 2014 for Dick’s Sporting Goods increased 2.3 percent, while Golf Galaxy decreased 10.4 percent.

“Our difficulties this quarter were isolated to two categories: golf and hunting,” said Edward W. Stack, Chairman and CEO, adding, “After a very challenging first quarter in golf last year, we expected some further headwinds and only modest improvement, but instead we saw a continued significant decline. In the case of hunting, we planned the business down based on last year's catalysts, but it was even weaker than expected.”

E-commerce penetration for the quarter was 7 percent of total sales, compared to 5.8 percent in the first quarter last year. In the first quarter, the company also opened eight new Dick’s Sporting Goods stores. The company also relocated one Dick’s Sporting Goods store and one Golf Galaxy store during the first quarter. As of May 3, 2014, the company operated 566 Dick’s Sporting Goods stores in 46 states and 79 Golf Galaxy stores in 29 states.

The company expects the challenges in golf to continue throughout the year, while hunting sales are anticipated to stabilize and begin returning to normalized levels by the end of the year. Given the importance of golf and hunting to the company's second quarter, the company expects a disproportionate impact to sales and earnings in the second quarter. Based on an estimated 124 million diluted shares outstanding, the company currently anticipates reporting consolidated non-GAAP earnings per diluted share of approximately 2.70 dollars to 2.85 dollars, excluding a gain on the sale of an asset. This compares to the previous expectation, provided on March 11, 2014, of 3.03 dollars to 3.08 dollars per diluted share. Consolidated same store sales are currently expected to increase approximately 1 to 3 percent, compared to a 1.9 percent increase in fiscal 2013.

Based on an estimated 124 million diluted shares outstanding, the company currently anticipates reporting consolidated earnings per diluted share of approximately 0.62 to 0.67 dollars in the second quarter of 2014. Consolidated same store sales are currently expected to increase approximately 1 to 3 percent in the second quarter of 2014, as compared to a 0.4 percent decrease in the second quarter of 2013.