Dick’s Sporting Goods delivers record Q1 sales, maintains outlook

Dick’s Sporting Goods reported its fifth-straight quarter of same-store sales growth over 4% and stuck by its full-year outlook despite the “dynamic macroeconomic environment."

The sporting goods giant reported its first-quarter earnings nearly two weeks after entering into a deal to acquire rival Foot Locker in a deal valued at $2.4 billion. The move will give Dick’s a global footprint for the first time and significant weight in negotiating with athletic powerhouse brands such as Nike and Adidas.

“By bringing our two great brands together, we see the opportunity to create a global leader in the sports retail industry. one that serves more types of athletes, consumers, and communities than we do today," DIck's executive chairman Ed Stack said on the company's earnings call. "This combination positions us to participate in the $300 billion global sports retail market and expands our reach to over 3,200 stores worldwide. By applying the operational expertise we've built over the years, we will help unlock the next chapter of growth for Foot Locker."

As to the question of store overlap, Dick's CEO Laura Hobart told analysts that about 30% of Dick's stores are in malls, "and we do believe one of the strong tenants of this acquisition is that we will be acquiring a different customer."

"We'll have access even within the U.S. to urban locations that we don't have access to before with a large format," she added.

Dick’s first-quarter profit fell to $264 million, or earnings of $3.24 per share, for the quarter ended May 3, from $275 million, or $3.30 a share in the year-ago quarter. Excluding one-time items related to its acquisition of Foot Locker, adjusted earnings per share totaled $3.37. Analysts had expected earnings per share of $3.21. 

Revenue rose 5.2% to $3.175 billion, ahead of analysts’ estimate of $3.018 billion. Comparable sales increased 4.5%, driven by growth in both the average ticket and transactions.