Dick's Sporting Goods on Wednesday reported net income of $57.5 million in the first quarter, compared to $60.1 million in the year-ago quarter, according to a company press release. On a non-GAAP basis, net income was $58.4 million.
Net sales in the quarter were $1.92 billion, an increase of 0.6%, and ahead of the FactSet consensus for $1.90 billion, per MarketWatch. Consolidated same-store sales were flat, reaching the higher end of the company's expectations and representing "another quarter of sequential improvement," according to the retailer. In the same period last year, comps declined 2.5%, and in Q4 they fell 3.7%.
E-commerce sales in the first quarter rose 15%, and made up 13% of total net sales, up from 11% in the year-ago quarter. The retailer closed two stores, opened one and relocated one in the period. Thanks to the stronger quarter, Dick's raised its full-year earnings per-share guidance to a new range of $3.20 to $3.40 from a previous range of $3.15 to $3.35.
Dick's first quarter results were better than expected after a fourth quarter that didn't inspire much confidence. While the retailer beat earnings estimates, net income in Q1 was down from the previous year — "a function of weaker store productivity and higher online fulfillment costs," according to GlobalData Retail Managing Director Neil Saunders.
The retailer is also facing pressure from specialists like Lululemon and popular brands like Nike, the latter of which has been focused on growing its direct-to-consumer business. Saunders also points to a "pincer movement" that is hurting Dick's position, as more intense athletes head to higher quality specialists and more casual consumers head to mass merchandisers.
"The rise of the generalists, such as Target and Kohl's, is particularly problematic as it has pulled footfall away from Dick's stores and that has a knock-on effect which reduces impulse sales," Saunders wrote in emailed comments to Retail Dive. "The blunt truth is that, as a sporting destination, Dick's is not as visible on the occasional consumer radar as it once was."
The athletics retailer is also likely still paying for its strong stance on guns, which included cutting assault-style rifles out of the assortment at its Field & Stream stores and lobbying for gun control. In the retailer's last earnings, CEO and Chairman Ed Stack also announced the removal of the hunting category from 125 Dick's stores where it was underperforming, with potentially more to come.
E-commerce continued to be a bright spot for the retailer, though, as growth in that area fell roughly in line with previous quarters. Digital sales rose 17% in Q4 and 16% in Q3, and executives expressed confidence in the retailer's omnichannel experience to strengthen its position in the market.
"During the first quarter, we made great progress in executing against our strategic priorities and investments as we remain focused on improving the in-store and online experience for our athletes and driving productivity improvements across our business," Lauren Hobart, president of Dick's Sporting Goods, said in a statement.