DICK’S Sporting Goods (NYSE: DKS) surpassed market estimates for revenue and earnings in the second quarter of 2019 and raised its earnings guidance for the full year, sending shares soaring over 11% in premarket hours on Thursday.
Net sales rose 3.8% year-over-year to approx. $2.26 billion, beating estimates of $2.21 billion. Consolidated same-store sales increased 3.2%, driven by increases in average ticket and transactions.
Net income was $112.5 million, or $1.26 per share, compared to $119.4 million, or $1.20 per share, in the prior-year quarter. Analysts had forecast EPS of $1.20.
eCommerce sales grew 21% in the quarter and represented approx. 12% of total net sales compared to 11% in the prior-year period. Total inventory increased 19% at the end of the quarter, mainly due to strategic investments to support key growth categories.
During the quarter, the company opened two new DICK’S Sporting Goods stores and closed two DICK’S Sporting Goods stores. As of August 3, 2019, the retailer had 727 DICK’S Sporting Goods stores in 47 states, with approx. 38.6 million square feet, 95 Golf Galaxy stores in 32 states, with approx. 2 million square feet, and 35 Field & Stream stores in 16 states, with approx. 1.7 million square feet.
For the full year of 2019, the company raised its EPS outlook to a range of $3.30-3.45 from the prior range of $3.20-3.40. Consolidated same store sales are expected to increase low single digits.
The company expects to open eight new DICK’S Sporting Goods stores and relocate three DICK’S Sporting Goods stores in 2019. It also expects to open two new Golf Galaxy stores and relocate two Golf Galaxy stores during the year. Seven of the new stores are expected to open during the third quarter.
DICK’S Sporting declared a quarterly dividend of $0.275 per share on its common stock and Class B common stock, payable on September 27, 2019 to stockholders of record on September 13, 2019.
On August 22, 2019, DICK’S completed the sale of two of its technology subsidiaries, Blue Sombrero and Affinity Sports, to Stack Sports for $45 million. The sale is expected to result in a one-time gain which will be determined later in the third quarter. The company is continuing the strategic review of its hunt business, including Field & Stream.