By Steven Porter
After a mild winter that bogged down fourth-quarter sales for Dick’s Sporting Goods Inc., the retailer turned in earnings Tuesday that were just shy of expectations.
Net income was $129.0 million, or $1.13 per diluted share, for fourth-quarter ended Jan. 30, down 17 percent from $155.5 million, or $1.30 per share, the same period a year prior.
Revenues, meanwhile, rose 3.7 percent to $2.24 billion from $2.16 billion.
Answering investors’ questions during a conference call, Dick’s Chief Operating Officer Andre Hawaux said the sales disappointment was no surprise.
“As I’ve always said, if we’re playing golf in Pittsburgh on Dec. 15, it’s going to be a pretty rough quarter,” Hawaux said, acknowledging that a late-season cold snap in the Northeast helped soften the blow.
Analysts surveyed by Yahoo! Finance had been expecting earnings of $1.15 per share after the company reduced its profit outlook in November.
Considering the challenge imposed by an unseasonably warm winter, Dick’s managed to drive growth in key categories, including online business, CEO Edward Stack said in a prepared statement.
Furthermore, Dick’s plans to extend the reach of its brand by partnering with the U.S. Olympic Committee and Team USA for this year’s summer olympics, Stack noted.
This comes as major competitor, Sports Authority Inc., plans to close stores amid bankruptcy proceedings.
Sixteen of the 30 analysts surveyed by Bloomberg advise investors to buy Dick’s shares, while 13 advised holding. One said it’s time to sell.
Wells Fargo Securities LLC Senior Analyst Matt Nemer, who issued a hold rating, cited three factors in his opinion.
“We see increased pressure for DKS including a decline from current peak levels of store productivity, shift to online, and an increased reliance on two vendors,” Nemer wrote in a “flash comment” issued Tuesday.
David Magee, an analyst with SunTrust Robinson Humphrey, was likewise among those who issued a hold rating. Setting a target price of $43 per share, he pointed to several factors that should be seen as enhancing lackluster Dick’s earnings, including the Sports Authority closures and the apparent early start to spring on much of the East Coast.
Historical closing prices, 2011-2016
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Dick’s share prices took a hit on the news Tuesday morning, but they rebounded by mid-afternoon to trade at $44.83, about 1 percent above Monday’s closing price.
Tuesday’s announcement brings Dick’s annual net earnings to $330.4 million, or $2.83 per diluted share, for fiscal year 2015, down 0.4 percent from $344.2 million, or $2.84 per share, a year prior.
Annual revenues were $7.27 billion, or $2.83 per diluted share, up 6.7 percent from $6.81 billion, or $2.84 per share.
