Mar 14, 2009
Dick's Sporting posts Q4 loss on charges
Mar 14, 2009
* Q4 adj. EPS $0.55 vs EPS $0.53 market view
* Same-store sales falls 8.6 pct
* Q1 outlook below analysts' view
* To reduce operating costs in 2009
* Shares rise 17 pct
(Recasts; adds analysts' comments, conference call details, share movement)
By Renju Jose
BANGALORE, March 10 (Reuters) - Dick's Sporting Goods Inc (DKS.N) posted a better-than-expected adjusted quarterly profit and said it expects to reduce operating costs in 2009 by about $50 million through payroll and other expense reductions, sending its shares up 17 percent.
"In the current environment, forecasts of improved cost controls and operating cash flows are likely to help shares move up," Wedbush Morgan Securities analyst Jeff Mintz told Reuters from Los Angeles.
The company, which plans to open about nine Dick's Sporting and stores one Golf Galaxy Store in the first quarter, expects same-store sales for 2009 to fall about 8 percent to 12 percent, compared with a 4.8 percent decrease in 2008.
It also expects lower consolidated gross margin levels for 2009.
Barclays Capital analyst Michael Lasser said the company's prudent managing along with low expectations for the year ahead should benefit it in this difficult environment.
"They have assumed that the difficult trends that they saw in the fourth quarter carries throughout 2009," Lasser told Reuters from New York. Even as the outlook suggests demand will decrease in the coming year, the company is well-positioned to emerge much stronger from the economic downturn, Lasser added.
The company, which sells sporting equipment, apparel and footwear, forecast first-quarter earnings of 3 cents to 8 cents, excluding items. Analysts on average were expecting earnings of 10 cents a share, according to Reuters Estimates.
For the latest fourth quarter, the company posted a loss of $104.4 million, or 93 cents a share. Excluding charges, the retailer earned 55 cents a share, which was 2 cents above the analysts' average estimate.
Shares of the Pittsburgh-based company were trading up $1.58 at $12.51 Tuesday afternoon on the New York Stock Exchange. They had touched a high of $12.80 earlier in the day.
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