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Dick's Sporting Goods

Dick's Sporting Goods earnings scored in the fourth quarter. The company expects to open approximately eight stores by the end of May.

Dick’s Sporting Goods edges out Wall Street expectations, stock leaps

by Rose Zhou
March 11, 2014

Dick’s Sporting Goods, Inc. earnings eked out a win in the fourth quarter on improved sales and merchandise margins. But the retailer’s shares closed up 4.3 percent in Tuesday’s trading on Wall Street.

In the quarter ended Feb. 1, Coraopolis, Pa.-based full-line sports and fitness specialty retailer earned $138.6 million, or $1.11 per diluted share, up 6.9 percent from $129.7 million, or $1.03 per diluted share, in the year-ago period. The quarterly earnings per share exceeded edged out Wall Street’s consensus estimate of $1.108 by .2 cent, as compiled by Bloomberg Finance L.P.

Net sales in the fourth-quarter rose 7.9 percent to $1.95 billion from $1.81 billion the previous year.

“We generated strong results in our fourth quarter, with record earnings per share of $1.11, above the upper end of the guidance range we provided in our third quarter press release, as our sales and merchandise margin exceeded our expectations,” Edward Stack, chairman and CEO, said in a press release.

Stack attributed the company’s positive performance partially to its “robust and growing omni-channel network,” which focuses on the consumer experience approach through all traditional and digital shopping channels. Stack said it will support double-digit growth in the company’s current year earnings.

Dick’s projected same store sales to increase 3 to 4 percent at the end of the current quarter, compared with a 3.8 percent decrease in the same period last year. The company expects to open approximately eight stores by the end of May, on top of the existing 558 Dick’s Sporting Goods stores in 46 states.

SunTrust Robinson Humphrey Inc. equity analyst David Magee said he is maintaining a “buy” recommendation on the company’s shares.  He noted in a research note released Tuesday that Dick’s results were” in line with its recently revised upward guidance range of $1.10-$1.11 per share.  Recall, the company had preannounced better than expected 4Q results in early February.”

Magee said the retailer’s sales benefitted from the severe winter weather, which spurred  better-than-average outerwear sales and more online transactions through its upgraded e-commerce site.

Dick’s earned $6.21 billion, or $2.69 per diluted share in the year ended Feb. 1, a 6.5 percent increase from $5.84 billion, or $2.31 per share in the prior year. Analysts expected full-year earnings to be $2.69, according to Bloomberg.

Dick’s shares closed at $56.67, up $2.34 compared with Wednesday's close of $54.33.