“We are pleased with how our consumer is holding up within the sporting goods industry and then particularly that they’re choosing Dick’s increasingly to meet their needs,” said Lauren Hobart, president and chief executive officer, on a conference call with analysts.
“People are prioritizing a healthy and active lifestyle, they’re prioritizing team sports, outdoor living, running, walking, all of those things,” Hobart said “So we felt in this past quarter particularly pleased there was an increase in transactions and ticket — and the fact that our consumers are not trading down that our consumer has held up very, very well.”
Net income fell by 12 percent in the third quarter to $201 million from $228 million a year earlier. But adjusted earnings per share rose to $2.85 — coming in 25 cents better than a year ago and 40 cents ahead of the $2.45 analysts projected, according to FactSet.
And revenues for the three months ended Oct. 28 increased 2.8 percent to $3.04 billion from $2.96 billion a year earlier. Same-store sales rose 1.7 percent.
That was more than many expected and Wall Street gave the quarter a hardy sign of approval, sending shares of Dick’s up 4.8 percent to $124.68 in midday trading.
Will Gaertner, an analyst at Wells Fargo, said: “The biggest surprise out of the print was the strong same-store sales which came in nearly 300 basis points ahead of Street [projections] driven by increased traffic and ticket. Credit card and traffic data in [the third quarter] pointed to much weaker comps in the quarter, but Dick’s appears to have bucked the trend. Management indicated that back-to-school was strong and the banners continued to gain market share.”
Neil Saunders, managing director of GlobalData, described the quarter’s sales as “very impressive.”
“Growth of 2.8 percent may sound modest, but it comes off the back of a big uplift last year and good gains in previous years,” Saunders said. “Indeed, compared to the pre-pandemic period of 2019, Dick’s sales are up by a whopping 55.1 percent.
“The slight concern within Dick’s numbers is the continued slowing of the growth rate, which has now been moderating for a year,” he said. “This is not so much an issue for Dick’s itself, but it sends another signal that the overall market is becoming tougher, and that the consumer is starting to pull back on spending.”
Saunders pointed to apparel as an area of particular strength.
“Over the past few years, Dick’s has become more of a destination for everyday casual apparel as well as for sporting apparel where it has always performed well,” he said. “Part of this is because clothing tastes and preferences have become more casual, which includes the rise of athleisure garments. However, part is also because Dick’s has rounded out its assortment with new brands and a better own-brand offering. This has allowed Dick’s to attract new shoppers and enlarge the share of wallet it gets from existing shoppers.”