Boston, MA 05/22/2014 (wallstreetpr) – Dicks Sporting Goods Inc (NYSE:DKS), the sporting goods retailer, announced the results of the first quarter ended May 3, 2014. Dicks continued to witness the challenge from golf and hunting categories as sales in both the businesses declined during the first quarter and, therefore, lowers its full year guidance.
Operating outcome
In same store sales, Golf Galaxy segment sales were down by 10.4% compared to prior year period, which was partly offset by 2.3% YoY increase in sales of Sporting segment.
The e-commerce business continued to show exceptional growth due to increasing sales across several categories including women and youth athletic apparel, footwear and team sports.
So, the consolidated net sales increased by 7.9% to $1.4 billion with 1.5% YoY in same store sales.
Gross profit also increased with increasing cost of sales as a result of higher sales and accordingly the adjusted (non-GAAP) EBITDA was up by 3% to $137 million (1Q2013: $133 million) and adjusted net income of $61.3 million or $0.50 per diluted shares (1Q2013: $60.5 million or $0.48 per share).
Allocation of capital
Dicks generated cash flow inflows of $13.9 million from its operation in 1Q2014 compared to cash used of $75.3 million in 1Q2013. The growth was due to increasing net income and improvement working capital changes.
The Company received $74 million from the sale of assets that partly offset the increasing capital expenditures. In addition, Dicks Sporting Goods Inc (NYSE:DKS) repurchased shares of $25.0 million in 1Q2014 (1Q2013: $81 million). So, Dicks ended up with cash and cash equivalents of $139 million as of May 3, 2014.
Outlook
Dicks expects challenges in golf sales in the coming quarters, however, anticipates stability in hunting sales by the end of 2014. In 2014, the Company expects to open one Golf Galaxy stores and eight new Field & Stream stores and relocate two Golf Galaxy stores. In addition, the expansion plans include the opening of ~50 new sporting goods stores, remodel five and relocate five sporting stores.
Based on the current trends over golf and hunting sales, Dicks Sporting Goods Inc (NYSE:DKS) expects a moderate growth (1 to 3%) in same store sales and anticipates adjusted EPS of $2.70 to $2.85 in FY2014.
