Dick's sporting goods It raised its dividend 10% on Thursday as the company posted its largest sales quarter in its history and forecast another year of growth.
The company's shares jumped more than 15% during real-time trading.
CEO Loren Hobart said on an earnings call Thursday that Dick's sales growth came from larger tickets — either higher prices or more expensive items — as its transactions were flat.
Many retailers took advantage of the 53rd week in fiscal 2023, but Dick's said it still broke records during the fiscal fourth quarter even without those extra days.
Here's how the sports apparel retailer's performance compared with what Wall Street was expecting, based on a survey of analysts conducted by LSEG, formerly known as Refinitiv:
Earnings per share: $3.85 adjusted vs. $3.35 expected Revenue: $3.88 billion vs. $3.80 billion expected
The company's reported net income for the three-month period ending February 3 was $296 million, or $3.57 per share, compared to $236 million, or $2.60 per share, in the previous year. Excluding one-time items related to impairment charges and inventory write-downs, Dick's reported earnings per share of $3.85.
Sales rose to $3.88 billion, up about 8% from $3.60 billion the previous year.
“With our industry-leading lineup and strong execution, we closed out the year with an incredibly strong fourth quarter and holiday season,” Hobart said in a statement.
“We are headed toward another strong year in 2024. We plan to grow our sales and profits through positive comps, higher merchandise margin and productivity gains,” she added.
During the quarter, same-store sales rose 2.8%, far exceeding the 0.8% rise analysts had expected, according to StreetAccount. “Growth in transactions” and market share gains drove the increase, said Ed Stack, executive chairman.
For fiscal 2024, Dick's expects earnings per share to range between $12.85 and $13.25, compared to estimates of $12.90, according to LSEG. The company expects revenue between $13 billion and $13.13 billion, roughly in line with estimates of $13.13 billion, according to LSEG.
The company expects same-store sales to rise 1% to 2%.
After this strong quarter, Dick's raised its quarterly dividend 10% to $1.10 per share.
While Dick's expects earnings to come in roughly in line with or exceed Wall Street estimates for 2024, it said it expects some challenges in the current quarter. CFO Navdeep Gupta said the company expects an “unfavorable” trend in gross profit margin compared to the same period of the previous year due to higher rates of contraction.
The industry term refers to inventory lost due to factors including theft and internal or external damage. Dick's cited the downturn in lowering its earnings forecasts last year.
In a call Thursday, Hobart said the company is “working on loss prevention, local law enforcement, and moving products to the back of the store with high shrinkage.”
Heading into the holiday season, Dick's raised its full-year sales and profit forecasts but struck a cautious tone about the crucial holiday shopping period, repeatedly saying it was optimistic about things “that are within our control.”
“We are conservative on the lower end of our guidance,” Hobart said on a call with analysts after Dick's third-quarter results were announced. “We're competing with everyone in the world during the fourth quarter, and the consumer is also going through a lot, and we're just trying to be careful.”
Read the full earnings release here.
