Dick’s Sporting Goods Inc (NYSE:DKS) disappointed investors with weak first quarter guidance on Tuesday Morning.
The shares were down 4% at US$50.50 in pre-market trading as the sporting goods retailer spoiled a decent set of full-year results with some lukewarm guidance on current trading.
The company expects earnings per share will fall somewhere between 50 and 55 cents in the first quarter, which was not what analysts wanted to hear, given they had pencilled in numbers around the 62 cents mark.
Like-for-like sales in the first quarter are expected to be 3 to 4% higher year-on-year, having been up 5% in the final quarter of 2016.
Net sales in the fourth quarter of last year rose 10.9% from a year earlier to US$2.5bn.
Adjusted net income for the fourth quarter was US$147.8mln, equivalent to US$1.32 per share, which was a shade above the top end of the company’s guidance range of US$1.19 to US$1.31.
"We are very pleased with our strong fourth quarter results, as we delivered a 17% increase in non-GAAP earnings per diluted share driven by strong comp sales and gross margin expansion. We realized meaningful market share gains and saw growth across each of our three primary categories of hard-lines, apparel and footwear," said Edward Stack, who is not only chairman but also chief executive officer of Dick’s Sporting Goods.
"In 2016, we capitalized on opportunities in the marketplace, and further solidified our leadership position by enhancing the shopping experience in our stores, building brand equity and successfully relaunching our eCommerce business on our own web platform," he added.
Stack said the company is looking at its entire vendor base, and segmenting it into strategic partners and transactional vendors; those that do not make the cut – what Stack called “tertiary vendors” – will be jettisoned.
“This strategy, combined with our efforts to enhance our digital capabilities, will enable us to stay ahead of consumer trends and differentiate us from the competition," Stack claimed.