(Reuters) - Dick’s Sporting Goods Inc (DKS.N) reported lower-than-expected fourth-quarter results after misjudging demand for cold weather merchandise due to mild temperatures early in the season.
The company, whose shares fell more than 10 percent, was unable to take advantage of colder weather in January because it had already cut stocks of winter gear.
Dick‘s, which sells Livestrong fitness equipment, said Lance Armstrong’s doping admission had also hurt sales of equipment bearing his brand.
“People had a very negative reaction to the Livestrong brand,” Chief Executive Edward Stack said on a conference call, noting that the brand constitutes slightly more than 50 percent of the company’s treadmill and elliptical trainer business.
Gun sales had a positive impact, Stack said, although little or no growth was expected in 2013 because of a shortage of ammunition.
Gun sales have been soaring in the United States on expectations of a tightening in gun ownership laws, following several mass shootings.
Dick’s pulled all guns from its store closest to the site of the school massacre in Newtown, Connecticut, in December and suspended the sale of certain kinds of semi-automatic rifles from its stores nationwide.
The company said it would likely report a profit of 47 cents to 49 cents per share for the current quarter, below the average analyst estimate of 50 cents per share.
Dick’s said investments in marketing, mobile and e-commerce platforms and remodeling its stores would reduce full-year earnings by 12 cents per share to $2.84 to $2.86 per share.
Analysts were expecting full-year earnings of $2.92 per share, according to Thomson Reuters I/B/E/S.
Comparable store sales at its Dick’s Sporting Goods stores fell 2.2 percent in the fourth quarter ended February 2.
Net income rose to $129.7 million, or $1.03 per share, from $111.1 million, or 88 cents per share, a year earlier.
Revenue rose 12 percent to $1.8 billion, short of analysts’ average forecast of $1.86 billion.
Same-store sales at Golf Galaxy stores rose 1.3 percent, while eCommerce sales rose 54.2 percent. The company did not provide a figures for actual sales.
The company, which sells footwear, gear and apparel of brands such as Nike, Adidas and Under Armour, operated 518 namesake and 81 Golf Galaxy stores as of February 2.
Analysts had expected a profit of $1.06 a share, according to Thomson Reuters I/B/E/S.
Dick’s also said that its board had authorized a share repurchase program of up to $1 billion over the next five years.
Shares of the Pittsburgh-based company were trading down 10.31 at $45.40 Monday. The stock was the biggest percentage loser on the New York Stock Exchange.
Reporting by Aditi Shrivastava in Bangalore; Editing by Saumyadeb Chakrabarty