Dick's Sporting Goods (DKS) Q2 2024 Results

Dick's Sporting Goods On Wednesday, it beat Wall Street's earnings estimates for its fiscal second quarter, and while the retailer raised its full-year guidance as a result, the new outlook fell short of expectations.

The sporting goods store comes after a number of other retailers that issued dovish or cautious guidance for the second half of the fiscal year as businesses prepare for the presidential election in November and what some fear could lead to a slowdown in consumer spending.

Here's how Dick's fared compared to what Wall Street expected, according to a survey of analysts by LSEG:

• Earnings per share: $4.37 compared to the expected $3.83
• Revenue: $3.47 billion compared to the expected $3.44 billion

The company's reported net income for the three-month period ended Aug. 3 was $362 million, or $4.37 per share, compared with $244 million, or $2.82 per share, a year earlier.

Sales rose to $3.47 billion, up 8% from $3.22 billion a year earlier. Comparable sales rose 4.5%, above the 3.6% expected by analysts, according to StreetAccount.

In a statement, CEO Lauren Hobart said comparable sales were driven by both transactions and tickets, indicating more people are visiting Dick's stores and spending more while there.

For fiscal 2024, Dick's now expects diluted earnings per share to be between $13.55 and $13.90, up from prior guidance of $13.35 to $13.75 per share. At the midpoint, Dick's only raised its earnings guidance by about 18 cents, even though its fiscal second-quarter earnings were 54 cents higher than expected. At the low end, Dick's earnings guidance falls just short of the $13.79 that analysts had expected, according to LSEG.

According to LSEG, Dick's maintained its sales forecast of $13.1 billion to $13.2 billion, which was also flat compared with the $13.24 billion expected by analysts. The company raised its comparable sales growth projections and now expects sales to grow between 2.5% and 3.5%, up from the previous forecast of 2% to 3%. The high end of the forecast is ahead of the 3% growth that analysts had expected, according to StreetAccount.

Last week, the company disclosed in a filing with securities regulators that it had been the victim of a cyberattack and that “certain confidential information” had been leaked. Dick’s said that as a result, it had activated its “cybersecurity response plan” and had engaged outside experts to investigate and isolate the threat.

In its filing, Dick's said it was not aware that the breach was disrupting business operations and, based on the information it had, did not believe the incident was material.

Last year around this time, Dick's shocked investors when it said the theft, along with aggressive writedowns of declining inventory, would hurt its full-year profit outlook, sending its stock down 24%. At the time, profits were down 23%, but with Wednesday's earnings beating expectations, those troubles appear to be behind the company.

Several other retailers including Aim and Walmart – said in recent weeks that shrink, or loss of inventory due to a variety of factors including theft and damage, had moderated. One of the major issues retailers said they would face throughout 2023, shrink appears to be in the rearview mirror for some after investments in operations, technology and a reduction in the use of self-checkout machines.

In recent weeks, a number of retailers reported second-quarter numbers that beat expectations but issued guidance for the final two quarters of 2024 that was either subpar or poor compared to the company’s performance. Retailers have been preparing for the upcoming November election and the impact it could have on consumer spending. Beyond the election, there are also uncertainties tied to the Federal Reserve’s expected rate cut and the impact it could have on discretionary spending.

Dick's is scheduled to discuss its results with analysts and share more information about its guidance at 8 a.m. Eastern Time.