Dick's Sporting Goods Inc. (DKS) said Thursday that its board of directors has authorized a share repurchase program of up to $200 million of the company's common stock over the next twelve months.
The Pennsylvania-based sporting goods retailer also narrowed its earnings per share guidance for the fourth quarter and fiscal year 2011, and revised its same store sales outlook for both the periods. The company said that the warmer- and drier-than-normal winter impacted its same store sales and inventory levels.
The company said that the share repurchases, which may be made in privately-negotiated transactions or in the open market, could begin immediately and may occur from time-to-time in the future. The company will finance the repurchases from cash on hand.
For the fourth quarter, Dick's Sporting Goods now expects earnings per share in a range of $0.87 to $0.88, compared to the prior range of $0.87 to $0.89 per share. On average, 23 analysts polled by Thomson Reuters expect the company to earn $0.87 per share for the quarter. Analysts estimates typically exclude special items.
The company also expects consolidated same store sales for the quarter to be slightly negative to slightly positive, compared to the prior outlook of flat to 1 percent increase.
For fiscal year 2011, Dick's Sporting Goods now forecasts adjusted earnings per share in a range of $2.01 to $2.02, compared to the prior range of $2.01 to $2.03 per share. In the year 2010, the company's reported earnings were $1.50 per share and adjusted earnings were $1.63 per share. Analysts expect the company to earn $2.02 per share for the year.
The company projects consolidated same store sales for the full year to approach 2 percent, compared to the previous outlook of approximately 2 percent. This is on top of an increase of 7.2 percent in fiscal 2010. Edward Stack, Chairman and CEO of Dick's Sporting Goods said, "At the time of our third quarter earnings announcement we noted that our guidance was predicated on normal winter weather patterns. While the warmer- and drier-than-normal winter has impacted our same store sales and inventory levels, sales and gross margin pressure has been minimized due to better than anticipated operating leverage, resulting in anticipated full year EPS growth of 23 to 24%."
In mid-November, Dick's Sporting Goods reported a profit for the third quarter that doubled from last year, driven by higher same store sales and the opening of new stores. The company's profit for the third quarter was $41.48 million or $0.33 per share, higher than $16.86 million or $0.14 per share in the year-ago period. Net sales grew 9.3 percent to $1.18 billion from $1.08 billion in the prior-year period.
In Thursday's regular session, DKS is trading at $39.76, up $3.36 or 9.23 percent on a volume of 2.14 million shares.
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