In a significant announcement, Dick's Sporting Goods has revised its expectations upward for full-year earnings and comparable sales growth, following a fiscal second-quarter performance that surpassed Wall Street projections. This adjustment underscores the retailer's robust operations amid a challenging economic landscape and presents key insights for investors. The company's latest guidance highlights an expectation for per-share earnings ranging from $13.55 to $13.90 for fiscal year 2024, an increase from the previous expectation of $13.35 to $13.75.
Market analysts, according to Capital IQ, anticipate a GAAP EPS of $13.73, showcasing the optimism surrounding the retailer’s fiscal health. In terms of sales, Dick's is now forecasting comparable sales growth between 2.5% and 3.5% for the current fiscal year, revising its earlier estimate of 2% to 3%.
With projected sales figures set between $13.1 billion and $13.2 billion, the market expects revenue of approximately $13.24 billion, reflecting a same-store sales growth of 2.9%. Despite these positive adjustments, shares of Dick's Sporting Goods saw a notable decline of 7.4% in Wednesday trading.
The investment community, particularly those on the buy side, may have found the increase in guidance less substantial than anticipated, indicating a potential "sharp deceleration" in performance trends moving into the latter half of the year, according to Wedbush Securities. This perspective suggests that analysts may have miscalculated the overall impact of a calendar shift and its implications on sales, especially as the company plans to modestly deleverage its selling, general, and administrative expenses this year, contrary to prior expectations of mild leverage. Navdeep Gupta, the Chief Financial Officer, expressed optimism during an earnings call, reinforcing the confidence in the company's strategic initiatives and operational efficacy.
"We are again raising our full-year outlook," Gupta stated, attributing this decision to the strong performance exhibited in the second quarter and the resilience of the company amidst a dynamic macroeconomic environment. The financial results for the three-month period that ended on August 3 were notably impressive, with Dick's reporting an adjusted EPS of $4.37, a substantial increase from $2.82 reported in the previous year.
This figure also surpassed market expectations, which estimated an EPS of $3.86. Year-over-year sales posted a robust improvement of 7.8%, reaching $3.47 billion, exceeding analysts' predictions of $3.43 billion. The comparable sales growth of 4.5% notably outpaced the 3.3% increase anticipated by the Street. Analyzing the company's financial metrics further, the gross profit margin as a percentage of sales demonstrated a notable shift, rising by 231 basis points year-over-year.
This positive movement is attributed to enhancements in merchandise margins alongside improved leverage on occupancy costs. On the downside, selling, general, and administrative expenses have risen to $796.7 million from $764.8 million in the previous year. It is crucial for investors to keep an eye on inventory levels, which reported $3.18 billion at the end of the quarter, marking an increase from $2.85 billion year-over-year and could foreshadow shifts in operational strategy. Looking ahead, the company anticipates the impact of a shifted calendar could potentially weigh on sales by an estimated $105 million, or roughly $0.35 per share, as indicated by Gupta during the call, urging stakeholders to remain vigilant on these developments..