Dick’s Sporting Goods Inc. on Thursday reported a quarterly profit that missed estimates as rising theft and markdowns on excess inventory dented margins, but the retailer’s comparable sales topped expectations..
For the second quarter ended July 30, the sporting goods retailer said it earned $145 million, or $1.35 per share, compared with $233.4 million, or $2.16 per share, a year earlier..
Analysts on average had expected the company to earn $1.50 per share, according to Refinitiv data..
Dick’s gross margin rate slid to 30.4% from 32.8%, primarily reflecting higher markdowns on excess inventory and increased shrink, partly offset by higher initial markups..
Total net sales rose 8.0% to $2.85 billion, beating estimates of $2.76 billion, as the company saw double-digit increases in golf, tennis, outdoor living and team sports categories, partly offset by a decline in firearms..
Comparable store sales jumped 8.4%, ahead of analysts’ expectations of a 6.6% increase, marking the 19th consecutive quarter of growth..
Inventory at the end of the quarter rose 34% to $3.89 billion..
Dick’s raised its full-year sales forecast and now expects comparable sales to increase between 3% and 4%, up from its previous forecast of a rise of 2% to 3%..
The company sees fiscal 2023 net sales between $12.36 billion and $12.51 billion, compared with its prior outlook of $11.96 billion to $12.11 billion..
Dick’s also maintained its adjusted earnings per share outlook for the year, still expecting it to be in the range of $10.00 to $11.00..
In a post-earnings call with analysts, Chief Executive Officer Lauren Hobart said inventory levels remain elevated but the company made progress in reducing its excess inventory, which now represents about 10% of total inventory..
She noted that demand for firearms remains below pre-pandemic levels and that the company continues to see higher levels of theft, particularly in urban areas..
Dick’s shares were down 3.7% in premarket trading on Thursday..
