Dick’s Sporting Goods (DKS, Financial) released its first-quarter 2020 financial results on June 2 before the market opened. While the company’s earnings fell short of Zacks Consensus estimates, revenue marginally beat estimates.
Snapshot of the quarter
The Coraopolis, Pennsylvania-based company posted loss per share of $1.21 in the first quarter, which was more than the projected loss per share of $0.62. Revenue of $1.33 billion was down 30.6% on a year-over-year basis but surpassed analysts’ projection by 0.02%.
Comparable store sales plunged 29.5% in the reported quarter. This was driven by temporary store closures.
CEO Edward W. Stack had the following to say:
"Although the business environment of 2020 remains uncertain, DICK'S Sporting Goods is in a position of strength. We believe coming out of the current crisis, health and fitness will become even more important to the consumer. As the leader in the sporting goods retail sector, our relationships with key brands have never been stronger and we are in a great place to support this demand."
As a result of the pandemic, customers often refrained from going to the physical stores, which is why digital traffic gained momentum during the quarter. E-commerce sales, which include Curbside Contactless Pickup, jumped 110% during the quarter. The e-commerce segment made up roughly 29% of the first quarter sales, up from 13% in the same period last year.
Financials and liquidity position
At the end of the quarter, the company had cash and cash equivalents of $1.5 billion, which included the $255 million borrowed under its revolving credit facility. In order to strengthen its liquidity, Dick’s issued $575 million worth of 3.25% Convertible Senior Notes.
The company has temporarily halted its stock buyback program and quarterly dividend.
Guidance
The company has pulled its financial forecast for fiscal 2020.
Disclosure: I do not hold any positions in the stocks mentioned.
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