Dick’s Sporting Goods Heading in Opposite Direction than Big 5 Sporting Goods
Shares of Dick’s Sporting Goods (NYSE:DKS) climbed 11 percent after the company admitted that unusually warm winter weather has damaged sales and profit a bit, but added it has plans to buy back as much as $200 million worth of its stock in the coming year. Dick’s said it now predicts fourth quarter earnings per share to be 87 cents or 88 cents, compared to a previous range of 87 cents to 89 cents. The company also foresees “slightly negative to slightly positive” same-store sales in the fourth quarter vs. a previous forecast of flat to an increase of 1 percent.
“At the time of our third quarter earnings announcement we noted that our guidance was predicated on normal winter weather patterns,” said Chief Executive Edward Stack. “While the warmer- and drier-than-normal winter has impacted our same store sales and inventory levels, sales and gross margin pressure has been minimized due to better than anticipated operating leverage, resulting in anticipated full year EPS growth of 23 to 24 percent.”
Not So Warm at Big 5 Sporting Goods
A warmer-than-expected winter in the U.S. forced Big 5 Sporting Goods (NASDAQ:BGFV) to lower its fourth-quarter earnings outlook, causing the shares to fall 14.2 percent in Thursday trading. The retailer said that due to the mild weather, it has sold fewer winter-related products.
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