Dick's Sporting Goods blows past earnings estimates but issues cautious guidance ahead of 2024 election

Dick's Sporting Goods beat Wall Street's fiscal second-quarter profit expectations on Wednesday, and while the retailer raised its full-year forecast as a result, the new guidance was disappointing.

The sporting goods store follows a string of other retailers that gave muted or cautious forecasts for the second half of the fiscal year as companies prepare for the November presidential election and what some say could lead to a slowdown in consumer spending.

Here's how Dick's performed compared to what Wall Street expected, based on a survey of analysts by LSEG:

• Earnings per share: €4.37 vs. $3.83 expected
• Gain: $3.47 billion vs. $3.44 billion expected

The company's reported net income for the three-month period ended Aug. 3 was $362 million, or $4.37 per share, compared with $244 million, or $2.82 per share, a year earlier.

Revenue rose to $3.47 billion, up about 8% from $3.22 billion a year earlier. Comparable sales rose 4.5% — more than the 3.6% analysts had expected, StreetAccount said.

In a statement, CEO Lauren Hobart said comparable sales were driven by both transactions and tickets, indicating more people are coming to Dick's stores and spending more.

For fiscal 2024, Dick's now expects diluted earnings per share to be between $13.55 and $13.90, up from its previous forecast of $13.35 to $13.75 per share. At the midpoint, Dick's only raised its profit forecast by about 18 cents, even though profit in the fiscal second quarter came in 54 cents higher than expected. At the low end, Dick's profit forecast falls slightly short of the $13.79 that analysts had expected, according to LSEG.

Dick's maintained its sales forecast of $13.1 billion to $13.2 billion, which also missed the $13.24 billion analysts had expected, LSEG said. The company raised its comparable sales growth forecast, now expecting it to grow between 2.5% and 3.5%, up from its previous forecast of 2% to 3%. The high end of the forecast is above the 3% growth analysts had expected, StreetAccount said.

Last week, the company disclosed in a securities filing that it had been the victim of a cyberattack and that “certain confidential information” had been breached. Dick's said that as a result, it activated its “cybersecurity response plan” and brought in outside experts to investigate and isolate the threat.

Dick's said in its filing that it had no knowledge that the breach would disrupt its business operations. Based on the information available to it, the company did not believe the incident was material.

This time last year, Dick's shocked investors when it said theft — along with aggressive markdowns on ailing stock — would hurt full-year earnings expectations, sending shares down 24%. At the time, earnings were down about 23%, but given Wednesday's earnings beat, it appears that those woes are now behind us.

A number of other retailers – including Goal And Walmart – said in recent weeks that shrinkage, or inventory loss due to a range of factors including theft and damage, had declined. One of the biggest issues retailers said they would face in 2023, shrinkage, appears to be behind some after investments in operations, technology and a reduction in the use of self-checkout.

In recent weeks, several retailers have reported second-quarter earnings that beat expectations but issued guidance for the final two quarters of 2024 that was either muted or poor relative to the company’s performance. Retailers are bracing for the upcoming November election and the impact it could have on consumer spending. Beyond the election, there are also uncertainties surrounding the expected Federal Reserve rate cut and the impact it could have on discretionary spending.

Dick's is expected to discuss its results with analysts at 8 a.m. ET and provide further insight into its outlook.