After a brief burst of physical retail sunshine via Walmart's earnings figures yesterday, the bad news parade got fired up again with the news out of Dick's Sporting Goods.
Dick’s Sporting Goods Inc. reported profit had fallen 10 percent to $56.9 million from $63.3 million a year ago. The good news is that is better than what they were expecting - pessimism reigns in retail these days and the firm managed to exceed its own grim March forecast of 48 cents to 50 cents per share in the quarter. Analysts, were no quite so dour on Dick's prospects and predicted 54 cents per share, according to Thomson Reuters - a range that Dick's missed.
On the upside, the sporting goods retailer said that Q1 same-store sales rose up 0.5 percent; same-store sales at Dick’s stores increased 0.4 percent while they increased 1.7 percent at Golf Galaxy stores. However, Dick's has low hopes for Q2 - with an earnings forecast between 62 cents and 72 cents per share, missing analyst exceptions of 78 cents per share. It is also predicting a slide in same-store sales in the 1 percent to 4 percent range.
Dick's best news is that it hasn't experience the worst outcome that its former rivals over at Sports Authority are - a fact largely credited to the fact that Dick's managed to stay ahead of the athleisure trend and began drawing that spend early. But Sports Authority's spectacular flame out is going to lead to some short-term pain, as the liquidation of SA's stock drives down the market.
“Over the longer term, we remain confident in our ability to aggressively capture displaced market share and to strengthen our leadership position," Dick's CEO Edward Stack noted.
There is mixed talk about whether Dick's will bid on any of Sport Authorities locations - some note it is likely, others note that Dick's is already over-extended on physical locations and may in fact be looking to contract operations on the brick-and-mortar side of things.
Dick's has already affirmed earlier this year that its current plans include investing in its existing stores as well as its eCommerce and omnichannel efforts.
“These investments are expected to have an approximate $50 million to $55 million impact on earnings in 2016 and include enhancing the shopping experience in our stores, building brand equity in a significant way through our partnership with the United States Olympic Committee and Team U.S.A., and transitioning our eCommerce business to our own platform," Stack noted.