Dick's Sporting Goods to focus on merchandising following solid Q4 and full year

By

Obi Anyanwu

Published
Mar 7, 2017

Dick’s Sporting Goods on Tuesday reported the financial results for its fourth quarter and full year. The sporting goods retailer posted fourth quarter consolidated net income of $90.2 million, or $0.81 per diluted share, which missed the projected range of $1.15 to $1.27 that was provided on November 15, 2016.

Non-GAAP net income increased 17% to $147.8 million, or $1.32 per diluted share, over the previous year, compared to the expected range of $1.19 to $1.31 per diluted share.

 
According to Edward W. Stack, Chairman and Chief Executive Officer, Dick’s Sporting Goods capitalized on opportunities in 2016 such as enhancing the store experience, building brand equity, and successfully relaunching its e-commerce.
 
Fourth quarter net sales increased 10.9% to $2.5 billion, consolidated store sales increased 5% compared to the company’s guidance of an increase of 3% to 6%, and same store sales increased 5.3%. E-commerce penetration was 11.9% of total net sales versus 10.3% in the previous year.

Consolidated net income for the year was $287.4 million, or $2.56 per diluted share, and non-GAAP net income was $349.7 million, or $3.12 per diluted share. Net sales increased 9% to $7.9 billion, reflecting the opening of new stores and an increase of 3.5% in consolidated same store sales.
 
Stack added, "In 2017, we will continue to be aggressive and evolve our business. We will implement a new merchandising strategy aimed at rationalizing our vendor base and optimizing our assortment to deliver a more refined offering for our customers. We are in the process of reviewing our entire vendor base, which will be segmented into strategic partners and transactional vendors, with tertiary vendors being eliminated. This strategy, combined with our efforts to enhance our digital capabilities, will enable us to stay ahead of consumer trends and differentiate us from the competition."
 
Dick’s Sporting Goods is set to replace Sears as lead tenant at Capital City Mall in Pennsylvania. The new location is one of 43 new stores the company plans to open in 2017. The company also expects to open 9 new Golf Galaxy stores and 8 new Field & Stream stores this year, largely adjacent to new or relocated Dick’s Sporting Goods stores. As of January 28, 2017, Dick’s operated 676 Dick’s Sporting Goods stores in 47 states.
 
For fiscal 2017, the company expects consolidated same store sales to increase in range of 2% and 3%, and expects diluted earnings per share to range from $3.63 to $3.73. First quarter earnings are expected to range from $0.48 to $0.53 and consolidated same store sales are expected to increase between 3% and 4%.