A shopping cart in front of a Dick's Sporting Goods store on August 26, 2020 in Daly City, California.
Justin Sullivan | Getty Images News | Getty Images
Dick's sporting goods Customers are spending more on new sneakers and sports equipment, prompting the retailer to raise its full-year earnings guidance, it said Wednesday.
The major sports store's comparable sales grew 5.3% during its fiscal first quarter, exceeding the 2.4% growth analysts had expected, according to StreetAccount.
The company said the growth was driven by a 2.7% increase in transactions, which means more customers are shopping at Dick's, and a 2.6% jump in average ticket value, which shows shoppers are spending more, too.
Shrinkage, a retail industry term for lost or stolen merchandise, rose less than the company expected, after seeing higher-than-expected shrinkage last year, Dick said.
The company's shares rose by more than 15% during daily trading.
Here's what Dick did in that period compared to what Wall Street expected, based on a poll of analysts conducted by LSEG:
EPS: $3.30 vs. $2.95 expected Revenue: $3.02 billion vs. $2.94 billion expected
The company's reported net income for the three-month period ending May 4 was $275 million, or $3.30 per share, compared to $305 million, or $3.40 per share, the previous year.
Sales rose to $3.02 billion, up about 6% from $2.84 billion the previous year.
“We've seen growth in all the different areas of our business. They've all grown in footwear, apparel and overall fixed lines,” CEO Lauren Hobart told analysts on an earnings call. “The consumer gives absolute priority to a healthy, active lifestyle. You see people running, walking and being outdoors. But I think the most important thing is that we provide them with an experience that they clearly choose and that comes together through the products that we have in our stores, as well as the experience that we provide in-house.” In-store and online.”
The strong quarter prompted Dick's to raise its full-year guidance, but the company remains cautious in the latter half of the year, Hobart said.
The retailer now expects earnings per share to be between $13.35 and $13.75, up from its previous range of $12.85 to $13.25. This is higher than the $13.25 level that analysts had expected, according to LSEG.
The retailer's caution was reflected in sales guidance, which fell slightly after the first-quarter revenue beat.
Dick's now expects comparable sales to rise 2% to 3%, compared to previous guidance of 1% to 2%. The lower end of that range is only in line with the 2% growth that analysts expected, according to StreetAccount.
Dick's expects full-year revenue to be between $13.1 billion and $13.2 billion, which is also in line with estimates of $13.16 billion, according to LSEG.
“What we did today in terms of full-year guidance is that it reflects the results that we posted here in the first quarter and we pretty much maintained our expectations for the second quarter into the fourth quarter,” Navdeep Gupta, chief financial officer, told analysts. “There's a little bit of a disconnect from the outside consensus expectations but I would say, you know, we're appropriately cautious when we think about the second quarter.”
Shake for shoes and clothes
Over the past year, consumers exposed to stubborn inflation and high interest rates have held off on purchasing discretionary items such as new clothes and shoes, but the apparel and footwear markets have shown some signs of life over the past two weeks.
Dick's performance indicates that consumers are willing to pay for new releases and other staples from major brands such as NikeHoka, Adidas company And on the run, they spend on things they may not necessarily need, but are nice to have.
Similar trends have been observed at other retailers. last week, Ross Stores, Ralph Lauren, Urban Outfitters And Cos TJX. All reported positive comparable sales. until Goal He stated that apparel was a bright spot in a dark quarter after the retailer saw a slowdown in apparel sales in the prior-year period. Demand for new Hoka sneakers and Ugg boots led to a 21% increase in sales in DeckerAnd even Shoe carnivalwhich caters to low-income consumers, saw sales grow nearly 7%, beating Wall Street estimates, according to LSEG.
We still have more insights into the state of consumer health and its impact on the apparel and footwear markets. Abercrombie & Fitch posted its strongest first quarter in history on Wednesday American eagle Earnings are scheduled to be published later in the afternoon. Foot locker, Birkenstock And gap He will report on Thursday.
Read Dick's full earnings release here.
—Additional reporting by CNBC's Robert Home.
