DICK'S Sporting Goods reported second-quarter results that showed strong core performance overshadowed by the costly integration of its newly acquired Foot Locker business. Consolidated net sales jumped 53.2% to $5.59 billion, but nearly all of that growth came from the Foot Locker acquisition, while the core DICK'S banner posted a 4.9% comp sales gain and expanded gross margin by 79 basis points. In contrast, Foot Locker's comparable sales fell 3.6%, and the company slashed its full-year earnings guidance to $11 to $12 per share from a prior range of $13.50 to $14.50. Integration charges have already reached $516 million of an expected $750 million total, and consolidated operating margin dropped to 8.1% from 13.02% a year ago. Despite the challenges, hedge fund ownership increased from 48 to 52 funds, and the company reaffirmed cost synergy targets of $100 million to $125 million.
Dick’s Sporting Goods IncCore comps up but guidance cut and integration costs weigh on earnings.
Foot Locker comps fell and guidance slashed due to integration drag.
