Dick’s Sporting Goods stock takes hit
Company issues dim outlook for 2018
Dick’s Sporting Goods on Tuesday issued its outlook for fiscal 2018 early, noting that with planned investments in the company and a tough retail environment, its earnings per share could slide 20 percent in the coming year.
The dim outlook pushed the Findlay-based company’s stock down 2.77 percent to close at $25.59.
“Because of the confidence we have in our business long term, we plan to make significant investments in our business in Q4 and into next year,” Edward Stack, chairman and CEO, told analysts on a third-quarter earnings call.
“This will have a short-term negative impact on our earnings. However, we expect these investments will pay meaningful dividends in the future,” he said.
Investments include e-commerce, in-store technology and in Dick’s private label brands, as well as Dick’s Team Sports HQ, a platform that provides tools like free online registration, team websites and a mobile app that teams can use to schedule.
Third-quarter earnings results beat analysts’ expectations. Dick’s reported consolidated net income hit $36.9 million, or 35 cents per share, versus $48.9 million, or 44 cents per share, a year ago. Analysts had been looking for 26 cents per share. Overall, net sales climbed 7.4 percent to about $1.94 billion. Consolidated same store sales, a key indicator tracking stores that have been open longer than a year, slipped 0.9 percent. The company expected a low single-digit decrease.
Online sales for the third quarter rose about 16 percent.
In a note, Susquehanna Financial Group’s Sam Poser wrote that the firm agrees the investments are necessary even though they will sting 2018 earnings. “However, we believe that [Dick’s Sporting Goods] management must also invest in more subtle consumer relationship enhancing endeavors. Without the more subtle investments, it will likely be difficult ... to