Dick’s Sporting Goods took a major hit from the coronavirus crisis but its shares rose amid signs of a rebound with the lifting of pandemic restrictions.
For the first quarter, the company swung to a net loss of $143.4 million, or $1.71 per share, from a profit of $57.5 million, or 61 cents per share, a year ago.
Net sales declined 30.6% to approximately $1.33 billion as same-store sales plunged by 29.5%, reflecting temporary store closures that began in mid-March due to the pandemic. Dick’s said it incurred $62 million, or roughly 50 cents a share, in pretax expenses related to COVID-19 during the quarter.
But Dick’s e-commerce sales rose 110% in the quarter ended May 2 and its shares rose 1.9% to $37.21 in trading Tuesday as company officials expressed confidence that it can weather the COVID storms.
“We believe coming out of the current crisis, health and fitness will become even more important to the consumer,” CEO Edward Stack said in a news release
Company President Lauren Hobart noted that through the first four weeks of the second quarter, same-store sales decreased only 4.0%, “representing a progressive recovery as we reopen our stores and maintain strong sales momentum in our e-commerce business, which has increased over 250%.”
Dick’s said its online sales got a boost from people under stay-at-home orders stocking up on weights, workout clothes, and other fitness gear to keep them busy. It also introduced a new Curbside Contactless Pickup service.
As of May 30, Dick’s had re-opened about 80% of its stores. “As sporting goods may be one of the first categories shoppers cut back on, sales may be able to bounce back more quickly, as consumers focus more on health and wellness, as well as outdoor activities that allow for social distancing,” Barron’s said.
The publication also suggested that “in some cases, investors have applauded companies that try to take as much of their coronavirus-related costs as possible, as soon as possible. That allows for future quarters to be more focused on rebounds in traffic and sales, rather than inventory write-downs and safety costs.”