Dick’s Sporting Goods Pays More Attention to Women and Kids, Less to Golf

Same-store sales for the second quarter rose 3.2%, with sales at Dick’s Sporting Goods stores up 4.1% and sales at Golf Galaxy stores down 9.3%. Online sales accounted for 6.3% of total sales for the quarter.

The company took pretax charges of $20.4 million in the quarter related to the restructuring of its golf business. The bulk of that, $14.7 million was a non-cash impairment charge. Another $3.7 million was related to employee separation costs, and $2.4 million was a write-down for golf inventory. The company consolidated the Golf Galaxy operations with the sporting goods stores that were “necessitated by the current and expected trends in golf.” In other words, there is less interest in golf.

The company’s continues to estimate that full-year 2014 EPS will total $2.70 to $2.85. The outlook for the third quarter calls for EPS of $0.38 to $0.42 and same-store sales are expected to rise 1% to 3%. The consensus estimate calls for third-quarter EPS of $0.42 and full-year EPS of $2.79.

The company’s CEO said:

Our second quarter results came in at the high end of our expectations. As anticipated, the golf and hunting businesses continued to experience negative comps. However, excluding these two categories, the remainder of the business delivered a 7.8% same store sales increase. We saw significant strength in several areas, including categories that have received more space within our stores, such as women’s and youth athletic apparel.

While second-quarter results were not outstanding, the company did beat both EPS and revenue estimates and took steps to cut losses from its golf business. That full-year EPS estimates from March were above $3.00 doesn’t seem to mean anything any longer; expectations (and the stock price) have been reset lower and Dick’s Sporting Goods doesn’t seem to have any trouble exceeding the new targets.

Shares were up more than 5% in premarket trading, at $45.76 in a 52-week range of $41.30 to $58.87. Thomson Reuters had a consensus analyst price target of around $51.60 before these results were announced.

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