Dick’s Sporting Goods raised its dividend by 10% on Thursday as the corporate posted its biggest quarter of revenue in its history and forecast one other yr of growth.
The company’s shares rose greater than 15% in intraday trading.
CEO Lauren Hobart said in a conference call Thursday that Dick’s sales growth was driven by larger tickets – either higher prices or costlier items – as transactions remained stagnant.
Many retailers benefited from a 53rd week in fiscal 2023, but Dick’s said the corporate still broke records within the fiscal fourth quarter even without those extra days.
Here’s how the sportswear retailer performed in comparison with Wall Street’s expectations, based on a survey of analysts by LSEG, formerly often known as Refinitiv:
- Earnings per share: $3.85 adjusted vs. $3.35 expected
- Revenue: $3.88 billion vs. expected $3.80 billion
The company’s reported net income for the three-month period ended Feb. 3 was $296 million, or $3.57 per share, compared with $236 million, or $2.60 per share, a yr earlier . Excluding one-time items related to impairments and inventory write-downs, Dick’s reported earnings per share of $3.85.
Revenue rose to $3.88 billion, up about 8% from $3.60 billion a yr ago.
“With our industry-leading range and strong execution, we finished the year with an incredibly strong fourth quarter and holiday season,” Hobart said in a press release.
“We forecast another strong year in 2024. We plan to grow both our sales and profits through positive comparables, higher merchandise margins and productivity improvements,” she added.
During the quarter, same-store sales rose 2.8%, well ahead of the 0.8% increase analysts had expected, based on StreetAccount. “Growth in transactions” and market share gains were the drivers of the rise, said Executive Chairman Ed Stack.
For fiscal 2024, Dick’s expects earnings per share of between $12.85 and $13.25, compared with estimates of $12.90, based on LSEG. According to LSEG, revenue is forecast to be between $13 billion and $13.13 billion, roughly in keeping with estimates of $13.13 billion.
The company expects same-store sales to extend 1% to 2%.
After the strong quarter, Dick’s increased its quarterly dividend by 10% to $1.10 per share.
While Dick’s expects earnings to roughly meet or exceed Wall Street estimates for 2024, the corporate expects some challenges in the present quarter. CFO Navdeep Gupta said the corporate expected an “unfavorable” gross margin trend in comparison with the identical period last yr on account of higher shrinkage rates.
The industry term includes inventory losses on account of aspects similar to internal or external theft and damage. Dick’s cited shrinkage as the rationale it cut its profit forecast last yr.
On the decision Thursday, Hobart said the corporate was “working with loss prevention, local law enforcement and moving high-shrink products to the back of the store.”
Heading into the vacation season, Dick’s raised its full-year sales and profit outlook but struck a cautious tone concerning the crucial holiday shopping season, repeatedly saying it was optimistic about things “under our control.”
“We are conservative at the low end of our guidance,” Hobart said in a call with analysts after Dick’s third-quarter results were reported. “We’re competing with everyone else in the world in the fourth quarter, and the consumer is also going through a lot, and we’re just trying to be cautious.”
Read the total earnings release Here.
