Shares of Dick's Sporting Goods lost fan support on Tuesday, falling almost 8 percent to close at $46.64, down $3.95, after the Findlay company dampened its earnings outlook following a soggy second quarter.
After two previous quarters that weren't inspiring either, one of the first questions that Edward W. Stack, chairman and CEO, took from an analyst on a conference call Tuesday was about whether there are broader problems hurting the retailer's results.
"We don't see that there's something fundamentally at issue within our business. We just hit the perfect storm," said Mr. Stack, as he was explaining why Dick's had a disappointing second quarter and had to revise its full year earnings guidance to a range of $2.60 to $2.65 per share. Analysts polled by Thomson Financial had been looking for $2.83.
"We do feel the consumer is going to continue to be cautious," he said.
For the three months ended Aug. 3, Dick's reported net income of $84.2 million, or 67 cents per share, compared to $53.7 million, or 43 cents per share, during the comparable period a year earlier. On an adjusted basis, the retailer said profit came in at $88.9 million or 71 cents per share.
That's below both the projections that Dick's provided in May of earnings in the range of 75 to 77 cents per share, and below the 74 cents per share that analysts polled by Thomson Financial Network had been looking for.
Net sales rose 6.6 percent to $1.5 billion. Adjusted for calendar differences, Dick's said sales at stores open at least a year -- also called same store sales -- fell 0.4 percent, with the company's Golf Galaxy stores taking the hardest hit.
That slip in sales at established stores accounted for the biggest earnings hit. Rain and cool weather didn't help, with golfers staying off the course.
In recent weeks, a number of retailers nationally have been forced to explain disappointing sales results, and analysts have been trying to figure out what that means for the broader economy, since consumer spending is a key factor.
Mr. Stack expressed his confidence in the Dick's format and said the retailer is already shifting space inside the stores from underperforming categories, such as fitness, to things such as youth apparel and women's apparel. The online business has been especially strong, he said, and the company expects to test a "buy online, pick up in store" option this fall.
Dick's also is taking steps to draw more customers into its stores, including doing more advertising and adding more hours for employees in areas that require more service, such as guns and ammunition and women's apparel. It also is adding more merchandise offerings at lower prices in categories such as athletic shoes, youth clothing and outerwear.
To try to avoid being sideswiped by another warm winter, Mr. Stack said the company will stock more fleece items and clothes that can be layered.
On the bright side, the company said its new Field & Stream store in Cranberry, the first of a new concept, had the best grand opening in the history of Dick's Sporting Goods.
The company last year bought the intellectual property rights to the brand in the hunting, fishing, camping and paddle categories.
Teresa F. Lindeman: firstname.lastname@example.org or 412-263-2018. First Published August 20, 2013 9:00 AM