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Aug 22, 2019

Dick's sporting goods rises after boosting full-year outlook

Dick's Sporting Goods

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Dick’s Sporting Goods Inc. soared in premarket trading after raising its earnings guidance for the full year, on the back of second-quarter profit and sales that topped analysts’ estimates.

  • The athletic and hunting retailer expects full-year earnings of $3.30 to $3.45 a share, higher than its previous projection of US$3.20 to US$3.40. Analysts were expecting US$3.31.
  • Second-quarter comparable-store sales rose 3.2 per cent, well ahead of analysts’ estimate of 1.1 per cent as compiled by Consensus Metrix.

Key Insights

  • The strong results and outlook show Dick’s isn’t suffering as it moves away from gun sales. The retailer began scaling back the category after the school shooting in Parkland, Florida, last year, and a strategic review of what it calls the hunt segment is continuing.
  • E-commerce was a bright spot for the chain, with sales up 21 per cent in the second quarter compared with the year-earlier period. E-commerce as a percentage of sales edged up to 12 per cent from 11 per cent.
  • Dick’s said it is bucking any ill effects from President Donald Trump’s trade war with China so far, saying its guidance includes the impact of all previous tariffs and the new 10 per cent levy coming soon on most remaining Chinese imports.

Market Reaction

  • Dick’s shares jumped as much as 15 per cent to US$37.97 in premarket trading Thursday. They were up 5.7 per cent this year through Wednesday, trailing the 17 per cent gain of the S&P 500 Index.