Dick’s Sporting Goods raised its dividend by 10% on Thursday as the corporate posted its largest sales quarter in its history and projected one other 12 months of growth.
The corporate’s shares jumped greater than 15% in intraday trading.
CEO Lauren Hobart said on an earnings call Thursday that Dick’s sales growth got here from larger tickets — either higher prices or dearer items — as its transactions were flat.
Many retailers benefited from a 53rd week in fiscal 2023, but Dick’s said it still broke records during its fiscal fourth quarter even without those extra days.
Here’s how the athletic apparel retailer did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly generally known as Refinitiv:
- Earnings per share: $3.85 adjusted vs. $3.35 expected
- Revenue: $3.88 billion vs. $3.80 billion expected
The corporate’s reported net income for the three-month period that ended Feb. 3 was $296 million, or $3.57 per share, compared with $236 million, or $2.60 a share, a 12 months earlier. Excluding one-time items related to impairment charges and inventory write-offs, Dick’s reported earnings per share of $3.85.
Sales rose to $3.88 billion, up about 8% from $3.60 billion a 12 months earlier.
“With our industry-leading assortment and robust execution, we capped off the 12 months with an incredibly strong fourth quarter and holiday season,” Hobart said in a press release.
“We’re guiding to a different strong 12 months in 2024. We plan to grow each our sales and earnings through positive comps, higher merchandise margin and productivity gains,” she added.
Through the quarter, same-store sales rose 2.8%, well ahead of the 0.8% lift that analysts had expected, in accordance with StreetAccount. “Growth in transactions” and market share gains drove the rise, said Executive Chairman Ed Stack.
For fiscal 2024, Dick’s is expecting earnings per share to be between $12.85 and $13.25, compared with estimates of $12.90, in accordance with LSEG. It’s forecasting revenue between $13 billion and $13.13 billion, roughly in step with estimates of $13.13 billion, in accordance with LSEG.
The corporate expects same store sales to rise by 1% to 2%.
Following the strong quarter, Dick’s raised its quarterly dividend 10% to $1.10 per share.
While Dick’s expects earnings to are available in roughly in step with or beat Wall Street’s estimates for 2024, it said it expects some challenges in the present quarter. CFO Navdeep Gupta said the corporate anticipates an “unfavorable” trend in gross margin relative to the prior-year period because of higher rates of shrink.
The industry term captures inventory lost because of aspects including internal or external theft and damage. Dick’s cited shrink in cutting its earnings forecast last 12 months.
On the decision Thursday, Hobart said the corporate is “working with loss prevention, local law enforcement, and moving products to the back of the shop which are high shrinks.”
Headed into the vacation season, Dick’s raised its sales and earnings outlook for the total 12 months but struck a cautious tone in regards to the crucial holiday shopping period, saying repeatedly it was optimistic for the things “inside our control.”
“We’re being conservative on the low end of our guidance,” Hobart said on a call with analysts after Dick’s third-quarter results were announced. “We compete with everyone on the planet through the fourth quarter, and in addition the buyer goes through an awful lot, and we’re just attempting to be cautious.”
Read the total earnings release here.