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Dick’s Sporting Goods Suffers 31% Decline in Same-Store Sales

As the earnings report showed, Dick’s made up to a 30 percent decline in same-store sales for the first quarter.
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Popular sports retail company Dick’s Sporting Goods has reported its earnings and revenues for the first quarter of the year.

While many believed that the company would suffer some losses – like just about every retail company – the firm appeared to have had an even worse quarter than analysts expected.

Pandemic-Hit Operations Aren’t a Surprise

As the earnings report showed, Dick’s made up to a 30 percent decline in same-store sales for the first quarter. The report isn’t entirely surprising, as the coronavirus pandemic forced retail firms to shut their locations and lose a great deal of business.

However, the firm’s e-commerce sales surged by a staggering 210 percent in the same period. With most of its stores closed, the firm has had to move to e-commerce to keep business and sales going. That move has so far paid dividends, as online sales surged 110 percent since the lockdown began.

The firm also got a bit of a boost from its curbside delivery service, which it launched to help provide a way for people to still shop while maintaining social distancing and other safety measures.

Overall net sales fell to about 31 percent, marking $1.33 billion for the quarter. By comparison, the firm made $1.92 billion in net sales for the first quarter of 2019.

For the quarter, the company reported a net loss of $143.4 million, translating to $1.71 per share. The results paled significantly to the $57.5 million – and 61 cents per share – that the firm earned in the same period last year.

Dick’s shares rose 1.5% in premarket trading Tuesday following the release. However, the company’s stock is trading down about 26% for the year.

The company’s overall performance was significantly worse than what many analysts had expected. Forbes reported that the company was expected to report a loss of $0.41 per share, with $1.55 billion in sales revenues. The news medium also confirmed that the Whisper Number – mainly, an unofficial estimate from top Wall Street analysts – was a $0.46 net loss.

Analysts at Refinitiv had also been calling for the company to report a net loss of $0.57 per share, with sales totaling $1.45 billion. The company’s performance hit both expectations out of the park.

However, given that many retail companies saw losses due to the pandemic and its effects, it’s quite easy to want to forgive the lackluster performance and wait. It’s also challenging to see how much of an impact the pandemic had on the firm’s performance.

Time to Focus on E-commerce?

While Dick’s sales suffer, the firm appears to be poised for a stronger quarter. With more states easing the lockdown restrictions and allowing for business activities to return, there is a significant level of optimism surrounding retail companies and their ability to return to profitable ways.

However, the company might want to take a cue and focus more on its more productive unit— e-commerce. The fact that states will be open isn’t a guarantee that customers would be willing to come out and shop as much as they would like. However, e-commerce has proven to be a sure way for companies to keep their operations afloat.

Walmart, the retail industry leader, saw a similar trend. The firm published its earnings report for the first quarter last month, and while it showed that the pandemic rocked its main retail business, one area where it did succeed was online sales.

Walmart’s report showed that online sales had grown by an impressive 74 percent across the first quarter. On the flip side, same-store sales grew by just 10 percent. The growth of its e-commerce business was the significant reason why the retail giant managed to record $134.6 billion in revenues and adjusted earnings per share of $1.18.

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Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works. jimmy@moneycheck.com

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