Dick’s Sporting Goods reported second-quarter diluted earnings of $3.50, down from $4.71 a year earlier, while non-GAAP diluted earnings were $3.53 versus $4.38.
Net sales jumped to $5.59 billion from $3.65 billion, a 53.2% increase, reflecting the addition of Foot Locker. Gross profit rose to $1.94 billion from $1.35 billion.
Operating income came in at 7.9% of sales, down from 12.4% in the prior-year quarter. Net income fell to $315 million from $381 million.
On a business-by-business basis, Dick’s Sporting Goods posted 4.9% comparable sales growth in the quarter, up from 5.0% a year ago. For the first half, Dick’s comps were up 5.4%, compared with 4.7% in the prior-year period.
Foot Locker’s pro forma comparable sales declined 3.6% in the quarter, versus a 2.2% decline in the prior-year comparison. For the first half, Foot Locker pro forma comps fell 1.6%, compared with a 2.5% decline a year earlier.
For the first six months, consolidated net sales reached $10.75 billion, up from $6.82 billion. Net income was $635 million, down from $646 million. Earnings per diluted share were $7.04, compared with $7.95.
The company’s balance sheet showed cash and equivalents of $914 million, down from $1.23 billion a year earlier. Inventories climbed to $5.57 billion from $3.40 billion. Long-term debt and financing lease obligations rose to $1.91 billion from $1.49 billion.
During the first half, Dick’s repurchased $141 million of stock, down from $299 million a year earlier, while dividends paid increased to $225 million from $196 million. Capital spending rose to $743 million from $526 million.
For the full year, Dick’s now expects net sales of $21.9 billion to $22.2 billion and earnings per diluted share of $10.94 to $11.94. It is guiding to Dick’s business comparable sales growth of 2.5% to 4.0%, while Foot Locker’s pro forma comparable sales are now expected to range from down 2.0% to flat.
The company also lowered its operating income outlook, to $1.45 billion to $1.55 billion on a GAAP basis, from a higher prior view, and now sees Foot Locker segment profit at a loss of $80 million to $40 million.
At quarter end, Dick’s operated 723 stores in its core business, up from 721 at the start of the period, while Foot Locker’s store count declined to 2,478 from 2,561. Today the company's shares have moved -25.52% to a price of $133.5662. For the full picture, make sure to review DICK'S SPORTING GOODS, INC.'s 8-K report.
