Dick's Sporting Goods' earnings disappoint in Q2; increasing promotional efforts

Posting less-than-expected earnings in its second quarter, the nation's largest sporting goods retailer plans to take a more promotional stance.



Dick's Sporting Goods reported consolidated net income of $112.4 million, or $1.03 per diluted share, for the quarter ended July 29, compared to $91.4 million, or $0.82 per diluted share, in the year-ago period. Excluding certain items, earnings came in at 96 cents, lower than the $1.01 that analysts had expected.



Net sales for quarter rose 9.6% to approximately $2.2 billion, in line with expectations. Consolidated same-store sales inched up 0.1%, missing Dick's own forecasts as well as those of analysts.



E-commerce sales for the quarter of 8ncreased approximately 19%. E-commerce penetration for the second quarter of 2017 was 9.2% of total net sales, compared to 8.5% in the prior year.



"We continued to capture market share and generated strong results in e-commerce, footwear and golf, although sales were pressured by weakness in hunting, licensed and athletic apparel, said Edward W. Stack, chairman and CEO. "By design, we will be more promotional and increase our marketing efforts for the remainder of the year, as we will aggressively protect our market share. We have updated our outlook to reflect these investments. We continue to believe retail disruption creates opportunities for us as we look long-term."



Dick's now estimates same-store sales to be flat or rise in the low single digits for the full year, compared to a 3.5% rise in same-store sales in 2016. The retailer is looking for earnings of $2.80 to $3 per share, below the $3.64 that analysts had been forecasting.



The retailer opened 13 namesake stores in the second quarter. As of July 29, 2017, the company operated 704 Dick's Sporting Goods stores in 47 states, 98 Golf Galaxy stores in 32 states, and 29 Field & Stream stores in 14 states.