Dick's Sporting Goods Scores 3Q EPS Beat, Reveals Dividend Plans
Boosted by strengthening same-store sales, Dick’s Sporting Goods (NYSE:DKS) revealed third-quarter results on Tuesday that beat the Street, leading the retailer to announce plans to begin paying a dividend.
Shares of the Pittsburgh-based sporting-goods seller climbed more than 4% amid enthusiasm for the figures and upbeat guidance for the holiday-shopping season.
Dick’s said it earned $41.5 million, or 33 cents a share, last quarter, compared with a profit of $16.9 million, or 14 cents a share, a year earlier. Excluding one-time items, it earned 32 cents a share, easily topping estimates from analysts for 26 cents.
Total sales jumped 9.3% to $1.18 billion, narrowly surpassing the Street’s view of $1.16 billion. Same-store sales climbed 4.1%.
“In the third quarter, we generated sales and earnings meaningfully above our expectations while increasing our margins and further strengthening our balance sheet," CEO Edward Stack said in a statement.
Dick’s, the largest publicly traded sporting-goods chain, also raised its full-year guidance. The retailer now sees 2011 non-GAAP EPS of $2.01 to $2.03, up from $1.94 to $1.96 previously. Same-store sales are expected to be up 2%, up from a forecast of 1% to 2% earlier.
For the crucial fourth quarter, which is dominated by the holiday-shopping season, Dick’s forecasted EPS of 87 cents to 89 cents, compared with estimates for 87 cents. Same-store sales are expected to be flat to up 1%.
Dick’s also disclosed plans to begin paying a dividend for the first time. The company’s board signed off on an annual dividend for 2011 of 50 cents per share, payable on December 28.
Dick’s said it plans to begin paying a regular quarterly dividend in 2012, but hasn’t yet determined the details on such a move.
"Our solid cash position and cash flow outlook enable us to continue to invest in future profitable growth opportunities, while also returning cash to our shareholders through the dividend,” Stack said.
Shares of Dick’s jumped 4.47% to $41.35 ahead of Tuesday’s open on the upbeat news, putting them on pace to extend their 2011 rally of about 5.5%.