(Reuters) - Dick’s Sporting Goods Inc (DKS.N) on Wednesday topped analysts’ estimates for quarterly results and raised its full-year profit forecast, sending its shares surging 28 percent and on track for their best day since the 2002 initial public offering.
The retailer of camping supplies, sporting goods and guns reiterated that its tighter gun sales policy would pressure its hunt business, but said the decision was attracting more customers to stores.
“There’s been a number of people who have started shopping (with) us. They said they’re going to shop (with) us more because of the policy,” Chief Executive Edward Stack said on a post-earnings call with analysts.
Dick’s was one of the first retailers to bar selling of guns to people under age 21 and ending the sale of assault rifles and high-capacity magazines following a massacre at a Florida high school in February.
The move, however, has soured relationships with firearm suppliers, Stack said.
Dick’s raised its full-year profit forecast by 12 cents to $2.92 to $3.12 per share, betting on higher margins from selling more goods at full price and cutting back on inventories.
Analysts on average were expecting a profit of $2.94 per share, according to Thomson Reuters I/B/E/S.
The company maintained its annual same-store sales growth target of between flat to a low single-digit decline.
“We continue to believe that Dick’s remains well positioned to see its comparable store sales inflect to positive in the next quarter or two,” Telsey Advisory Group’s Joseph Feldman wrote.
Dick’s reported first-quarter earnings of 59 cents per share, above analysts’ average estimate of 45 cents.
Sales of $1.91 billion in the three months ended May 5 also exceeded estimate of $1.88 billion, despite a 2.5 percent decline in same-store sales due to colder weather that hurt purchases of hunting gear and electronics.
The company's shares have gained 6 percent this year, outperforming the near 4 percent gain for the S&P 500 index .SPX.
Reporting by Aishwarya Venugopal in Bengaluru and Kanika Sikka in New York; Editing by Sai Sachin Ravikumar and Sriraj Kalluvila