Shares of Dick’s Sporting Goods jumped more than 7 percent in premarket trading Tuesday, after the athletic goods company reported earnings and revenue that handily topped Wall Street’s expectations.
The retailer raised its full-year guidance in wake of the better-than-expected results, which included comparable sales growth of 2.8 percent. Analysts had expected the company to report a 2.2 percent decline in that metric, according to FactSet, due to clearance sales at the bankrupt Sports Authority chain.
“We are pleased with our second quarter results, particularly in light of the liquidation activity in the market,” said Ed Stack, Dick’s chairman and CEO. “Looking ahead, we are focused on capturing the displaced market share and remain confident in our ability to strengthen our leadership position.”
Dick’s said it earned 82 cents a share in the fiscal second quarter, 13 cents higher than a consensus estimate from Thomson Reuters. The retailer’s sales increased 7.9 percent to $1.97 billion, topping Wall Street’s expectation for $1.82 billion.
The company raised the bar for its full-year performance, saying earnings per share should range from $2.90 to 3.05. That excludes the costs it expects to incur from converting 31 Sports Authority stores into Dick’s locations.
For the full year, Dick’s sees same-store sales increasing 2 to 3 percent. The company previously said it expected to earn $2.60 to $2.90 this year, with comparable sales falling in a range of negative 1 percent to positive 1 percent.
Analysts had expected the retailer to raise its full-year outlook, due to what they considered a more modest impact from The Sports Authority’s liquidation. When the chain initially said it would liquidate its merchandise, Wall Street was concerned the action would pull deal-hungry shoppers into its stores, and force Dick’s into additional discounting to compete.
Dick’s acquired The Sports Authority’s intellectual property in June and is positioned to grab at least $500 million to $750 million in revenue from it and Sport Chalet’s demise over the next few years, according to Susquehanna International Group.