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Dick's Sporting Goods (DKS) Issues "Beat and Raise" Q1, Shares Higher

May 18, 2010 9:12 AM EDT
DKS Hot Sheet
EPS Growth %: +50.0%

Financial Fact:
Net sales: 1.28B

Today's EPS Names:
TARO, BRLI, TLB, More
Dick's Sporting Goods Inc. (NYSE: DKS) posted better-than-expected quarterly results on Tuesday on the strength of improved margins, but the company gave a lukewarm forecast for the current quarter.

The largest publically traded sporting goods company in the U.S. reported first-quarter earnings of $26.2 million or 22 cents per share, compared to earnings of $10.2 million or 9 cents per share in the same quarter last year.

Revenue for Dick's jumped 9 percent to $1.05 billion in the three month period ended May 1. Gross margin improved to 28.9 percent of sales from 26.1 percent in the year-ago quarter.

The first-quarter results beat the market consensus of 14 cents per share in earnings and revenue of $1.03 billion.

"In the first quarter, we grew earnings through higher sales and improved margins, increased our cash position by $161 million, and effectively managed our inventory levels," said Edward W. Stack, Chairman and CEO of Dick’s. "At the same time, we continued to invest in the future growth of our business through the opening of new Dick's Sporting Goods stores, investing in technology and ramping up marketing initiatives geared towards driving market share gains."

Looking ahead, the company sees second-quarter earnings in the range of 37 cents to 39 cents per share, compared to the Street’s expectation of 39 cents per share.

Dick’s also sees same store sales in the full year 2010 rising 3 percent to 4 percent, and raised its full-year earnings forecast from a previous guidance of $1.32 to $1.35 per share to $1.41 to $1.44 per share. Analysts are currently looking for full-year earnings of $1.38 per share from the company.

Shares of Dick’s Sporting Goods are up 3.58 percent to $29.50 in premarket trade Tuesday.

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