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Revenue Miss Does Not Deter Investors in Dick's Sporting Goods

Revenue Miss Does Not Deter Investors in Dick's Sporting Goods

Reporting Q1 earnings of 48 cents a share, up seven percent from last year and in line with analysts’ estimates has, so far, helped Dick’s Sporting Goods Inc. (NYSE: DKS) overcome the 4 percent, $1.3 billion gain in revenue that fell slightly below Wall Street expectations.

The seven percent EPS growth reported Tuesday represented the first time in 13 quarters that earnings per share growth was under double digits.

Revenue for the quarter gained four percent to $1.3 billion, slightly below views.

Chief executive, Edward Stack, said in a statement reported by Investors Business Daily, "We generated earnings in line with our original guidance, but were not pleased with our sales results, which came in below our expectations."

As of May 4, the company operated 520 Dick's Sporting Goods stores in 44 states and 81 Golf Galaxy stores in 30 states.

Following a recent survey of more than 26,000 readers, Consumer Reports said that while the two most popular sporting goods stores were Dick’s Sporting Goods and Sports Authority, sports chains in general do not please customers as much as independent retailers and outdoor chain stores like Bass Pro Shops and Cabela’s Inc. (NYSE: CAB).

Lack of consumer enthusiasm has not escaped CEO Stack. In a statement reported by the Pittsburgh Post-Gazette Tuesday, he said, "To drive sales and preserve margins in the near term, we will work with our vendor partners, particularly in golf, to provide value offerings; we will aggressively execute our store remodel program, with approximately 75 percent of the identified stores expected to be completed by the end of the second quarter; and we will continue to manage clearance inventory, which has declined meaningfully," he said.

Late afternoon, Tuesday, shares of the Coraopolis, Pennsylvania-based company, were trading for $52.82, up $0.61 or a little over one percent on the day. Prices, earlier, went as high as $54.25 from an opening bid of $52.12.

Meanwhile, Dick’s competitor, Hibbett Sports (NASDAQ: HIBB), will report Q1 earnings Friday before the open. Thomson Reuters polled analysts who expect EPS of $1.07, up from 98 cents in 2012.

Hibbett shares were selling for $61.49 late Tuesday, down 1 cent.

Big 5 Sporting Goods(NASDAQ: BGFV) reported its first-quarter results May 1 showing earnings of 34 cents a share, up from 1 cent the previous year.

Big 5 was trading at $20.93, up $0.35 or 1.7 percent.

Cabela’s shares were selling at $70.89, down $0.67 or about one percent on the day.

As of this writing, Jim Probasco had no position in any mentioned securities.


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