Outdoor financials: Lower same-store sales rock Dick's Q2 profit - SNEWS

Outdoor financials: Lower same-store sales rock Dick's Q2 profit

Lower same-store sales rocked the Q2 profit for Dick's Sporting Goods.
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Lower same-store sales rock Dick's Q2 profit

Dick's Sporting Goods (NYSE: DKS) said its fiscal second-quarter earnings dropped 5 percent, partly from lower same-store sales.

The company reported net income of $41.1 million, or $0.35 per share, for the quarter ended Aug. 2, compared with $47.9 million, or $0.41 per share in the same quarter last year. Adjusted earnings, which exclude costs related to the integration of Golf Galaxy, were $0.39 per share.

Second-quarter net sales rose 7 percent to $1.09 billion from $1.01 billion in the year-ago quarter. The company attributed the sales increase to the opening of nine new Dick's stores and the inclusion of Chick's Sporting Goods results for the quarter.

Net earnings included operating results from Golf Galaxy and Chick's Sporting Goods. Dick's acquired Golf Galaxy in February of last year, and Chick's was acquired in November.

Dick's same-store sales dropped 3.7 percent for the quarter, while Golf Galaxy same-store sales declined 4.5 percent. Chick's Sporting Goods was excluded from the same-store calculations, the company said.

For 2008, Dick's said it anticipates reporting earnings per diluted share of approximately $1.27 to $1.36. Comparable store sales, which include Dick's Sporting Goods stores only, are expected to decrease approximately 3 percent to 5 percent.

For the third quarter, the company predicts earnings of $0.04 to $0.08 per share.

Shares of Dick's rose $2.63, or about 15 percent, to close at $20.92 on Aug. 21. The stock has traded between $14.93 and $36.77 over the past year.

Citi analyst Kate McShane reiterated her "Buy" rating on the company. "Despite macro pressures, Dick's management continues to execute its long-term strategy of double-digit square foot expansion while managing near-term costs and maintaining margins," McShane wrote in a note to investors. "Despite the run in the stock price today, we think the stock remains cheap and is an attractive entry point for investors."



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