Shoppers view merchandise being sold at discount prices at the JCPenney at the Columbia Mall on July 24, 2017 in Bloomsburg, Pennsylvania. The JCPenney is having a store liquidation sale and plans to close July 31, 2017. Abandoned by the big brands, deserted by the young, the American mall, once temples of the shopping, have become ghost towns, victims of the explosion of online shopping. / AFP PHOTO / Don Emmert / TO GO WITH AFP STORY by John BIERS, ‘Deserted, US shopping centers look for a future’ (Photo credit should read DON EMMERT/AFP/Getty Images)
Today Dicks Sporting Goods (DKS) announced second quarter earnings results and the commentary suggested the retail market is currently influx. The companys CEO, Ed Stack, said the environment is highly competitive and dynamic. We continue to believe this disruption translates into opportunity for our business long-term.
Dicks sales and earnings did not meet original expectations, as second quarter non-GAAP earnings per diluted share were $0.96, below guidance of $1.02 to $1.07.
Dicks said it was lowering its full year guidance, and expects non-GAAP earnings per diluted share to be in the range of $2.80 to $3.00, which includes approximately $0.05 coming from the 53rd week. This compares to our previous guidance range of $3.65 to $3.75. Also, consolidated same-store sales are guided to be flat to low single-digit negative for the year, compared to the previous guidance of positive 1% to 3%.
On the earnings call, one analyst asked what kind of variance would say in those A mall versus the C mall, B mall for fleet locations, are you seeing under brick-and-mortar from a comp basis?
The CEO replied, we are not going to get to that level of granularity to kind of layout what our comps are by category A mall, B mall, C mall.
In response to another analyst question, Dicks CEO replied,
we’ve talked about slowing down our store growth not because we’re not happy with our new store performance or new store performance has been very good. We slowed the store growth down because we think real estate prices a couple years from now are going to be less expensive than they are today.
We’re starting to see that as we renegotiate leases or relocate stores. The rents are coming down in all but the true A mall so, if you take a look at the true A malls we actually think rents in those malls might actually go up we’re not in a ton of those, we think in and we’ve got long term options so it won’t affect us.