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Saturday September 22nd, 2018 9:26AM

Dick's shares take a hit on disappointing holiday sales

By The Associated Press
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CORAOPOLIS, Pa. (AP) — Dick's Sporting Goods reported disappointing holiday sales numbers in part due to weak demand for one-time hot brands like Under Armour.

The company's CEO also said recent changes to its firearm policies, ending the sale of guns to anyone under 21, will hurt future sales and may cause fewer shoppers to come to its stores.

Last month, Dick's stepped into the national spotlight when, in the aftermath of a school massacre in Parkland, Florida, it banned the sale of assault-style rifles and the sale of all guns to anyone under 21. Other retailers followed suit, including Walmart, which also raised its minimum age rules for firearms.

Its stock tumbled in afternoon trading Tuesday.

Sales fell 2 percent at established stores during the fourth quarter, which was about double the decline that Wall Street was expecting. Industry analysts watch that figure closely as a barometer of a retailer's health as it excludes the volatility of stores recently opened or closed.

To try and improve sales, CEO Edward Stack said the company will give more store space to its private-label brands, such as Second Skin workout apparel. Its store brands are growing faster than others, and Stack expects them to surpass $2 billion in sales in a "short period of time," but did not give an exact time for that to happen.

Stack said Tuesday that the company's new firearms policy "is not going to be positive from a traffic standpoint and a sales standpoint."

Dick's expects full-year earnings of about $2.80 to $3 per share. Analysts polled by FactSet predict $2.79 per share.

For the period ended Feb. 3, Dick's Sporting Goods Inc. earned $116 million, or $1.11 per share. A year earlier the company, based just outside of Pittsburgh in Coraopolis, Pennsylvania, earned $90.2 million, or 81 cents per share.

Excluding certain items, earnings were $1.22 per share. That's 2 cents better than analysts expected, according to a survey by Zacks Investment Research.

Revenue rose to $2.66 billion, from $2.48 billion, with online sales up about 9 percent. But that was still shy of Wall Street projections for $2.73 billion.

Shares of Dick's Sporting Goods Inc. fell 76 cents, or 2.3 percent, to $31.80 in afternoon trading Tuesday.

_____

Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DKS at https://www.zacks.com/ap/DKS

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Economy
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