10:45 AM EDT, 09/04/2024 (MT Newswires) -- Dick's Sporting Goods (DKS) raised its full-year earnings and comparable sales growth outlook on Wednesday, as the athletic goods retailer's fiscal second-quarter results beat Wall Street's estimates.

The company now anticipates per-share earnings to come in between $13.55 and $13.90 for fiscal 2024, up from its prior guidance of $13.35 to $13.75. The consensus on Capital IQ is for GAAP EPS of $13.73.

Comparable sales are set to increase by 2.5% to 3.5% for the ongoing fiscal year versus the retailer's previous projections for a 2% to 3% increase. The company continues to forecast sales of $13.1 billion to $13.2 billion. The Street is looking for revenue of $13.24 billion and same-store sales growth of 2.9%.

However, shares of the company dropped 7.4% in Wednesday trading.

The magnitude of the guidance increase is "likely below buy side expectations" and implies a "sharp deceleration" in trends in the second half, Wedbush Securities said in a client note. "This is likely partly due to consensus mis-modeling the impact of a calendar shift, but also due to the company now expecting to deleverage (selling, general and administrative expenses) modestly for the year (versus) previously expecting it to leverage modestly," according to the brokerage.

"We are again raising our full-year outlook," Chief Financial Officer Navdeep Gupta said on an earnings call, according to a Capital IQ transcript. "This reflects our strong (second-quarter) performance and our confidence in our strategic initiatives and operational strength balanced against the dynamic macroeconomic environment."

Dick's logged adjusted EPS of $4.37 for its three-month period ended Aug. 3, up from $2.82 the year before, and ahead of the market's view for $3.86. Sales improved 7.8% year over year to $3.47 billion, topping analysts' $3.43 billion estimate. Comparable sales advanced 4.5%, beating the 3.3% gain modeled by the Street.

The company's gross profit as a percentage of sales increased by 231 basis points on a yearly basis, driven by higher merchandise margin and leverage on occupancy costs, Gupta told analysts. Selling, general and administrative expenses rose to $796.7 million from $764.8 million last year. At the end of the quarter, net inventories stood at $3.18 billion, compared with $2.85 billion the year before.

For the ongoing three-month period, Dick's expects the impact of a shifted calendar to weigh on sales by about $105 million or roughly $0.35 per share on earnings, Gupta said on the call.

Price: 208.93, Change: -23.19, Percent Change: -9.99