Dick's Sporting Goods sinks in UK investment

PITTSBURGH (AP) ? Dick's Sporting Goods topped Wall Street expectations for the second quarter and boosted its outlook for the year, but an impairment charged tied a stake in a troubled European retailer dragged down earnings and jolted investors.

Shares slid 4 percent in early trading Tuesday.

Dick's Sporting Goods made an investment in the U.K.'s JJB Sports in April. It acknowledged Tuesday that the company's performance has deteriorated in part because of the economic crisis in Europe.

Chairman and CEO Edward Stack said that the JJB Sports investment was high risk from the outset, and that Dick's has no further funding obligations to JJB and will continue to monitor the situation.

Nonetheless, the company took a 22 cent per-share charge from the investment for the quarter.

For the period ended July 28, Dick's Sporting Goods earned $53.7 million, or 43 cents per share. A year earlier it earned $73.8 million, or 59 cents per share.

Removing the one-time charge related to its investment in JJB Sports, earnings increased to 65 cents per share, from 52 cents.

That edges out the 64 cents analysts had been looking for, according to a poll by FactSet.

Revenue climbed 10 percent to $1.44 billion from $1.31 billion.

Revenue at stores open at least a year rose 3.8 percent. While sales improved at both its Golf Galaxy and namesake stores, online sales provided the biggest boost, climbing 34.6 percent.

Revenue at stores open at least a year is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

Dick's Sporting Goods now anticipates full-year adjusted earnings of $2.47 to $2.51 per share, up from $2.45 to $2.48 per share. Revenue at stores open at least a year is expected to increase about 4 percent to 5 percent.

For the third quarter, the company foresees earnings of approximately 36 cents per share, with revenue at stores open at least a year up about 4 percent.

Analysts expect full-year earnings of $2.52 per share and third-quarter earnings of 36 cents per share.

Dick's Sporting Goods Inc. also declared a quarterly dividend of 12.5 cents per share. The dividend will be paid on Sept. 28 to shareholders of record on Aug. 31.

There were 490 Dick's Sporting Goods stores in 44 states and 81 Golf Galaxy stores in 30 states at quarter's end.

Shares of Dick's Sporting Goods Inc. fell $2.01 to $48.53. Over the past year, the shares have traded between $30.21 and $52.

Source: http://news.yahoo.com/dicks-sporting-goods-sinks-uk-investment-142236084--finance.html

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