Dick’s Sporting Goods reported “the golf business was particularly weak” during a first quarter in which it witnessed its net income decline 4.3 percent. The company noted it is beginning to feel the effects of an economic slowdown and lowered its earnings forecast for the full year.
For the period, the Pittsburgh-based retailer generated net sales of $912.1 million, up 11 percent from $823.6 million a year ago. Net income, however, dropped to $20.8 million compared with $21.7 million in the first quarter last year.
Quarterly same store-sales, or sales at stores open at least a year, fell 3.8 percent. Dick’s officials expect same-store sales to decline 3 percent to 5 percent in 2008. The company’s forecast doesn’t include Golf Galaxy or Chick’s Sporting Goods locations, which Dick’s bought last year.
The retail chain also announced pro forma sales for its Golf Galaxy stores declined 7.4 percent. (Four new Golf Galaxy stores opened in the first quarter, increasing the total number of Golf Galaxy stores to 83.)
“We think that the golf market is quite difficult out there right now,” said Ed Stack, Dick’s president and CEO. “But I think the Golf Galaxy Group is doing a very good job of running this business in a difficult environment and is certainly outperforming the rest of the golf industry.”
He said golfers postponed purchases because of a weak economy, higher gas prices and uncertainty about the future. Stack also anticipates consumers will continue to spend conservatively on golf products at least through the balance of the year.
Dick’s lowered its full-year earnings forecast to a range of $1.22 a share to $1.36 a share, down from its earlier outlook of $1.49 a share to $1.54 a share.