Dick's Sporting Goods Reports Earnings

Welcome back to FN Daily, where we break down the biggest stories happening in footwear and retail.

Today we are diving into earnings from Dick's Sporting Goods and a new survey about how shoe executives feel about the next six months.

Plus, Erik and Pete Nordstrom offer to buy the retailer.

Here's what you need to know.

Dick’s Sporting Goods Raises Outlook Following Strong Q2

Dick’s Sporting Goods raised its 2024 outlook on Wednesday morning after the retailer reported sales and earnings figures that beat expectations.

In the second quarter, the sporting goods store’s revenues were $3.47 billion, up 7.8 percent from the same quarter last year and ahead of the $3.44 billion expected by analysts surveyed by Yahoo Finance. Earnings per diluted share were $4.37, up 55 percent from last year and ahead of the $3.83 analysts were looking for. Comparable store sales were up 4.5 percent.

The shoe angle: In a call with analysts discussing the results, Dick’s president and chief executive officer Lauren Hobart said that the chain’s investments in full-service footwear decks in stores has helped bring new, cool lifestyle products to consumers in a new way.

“We still have incredible footwear, apparel and gear for anybody who wants to compete at a high level,’ Hobart said, citing products like soccer cleats. “But at the same time, we now have access to the cool shoes, and that’s important to the athlete when they come and they can get everything that they need.”

Shoe Execs Uneasy About Trade Policy Ahead of Presidential Election

A new survey from The Footwear Distributors and Retailers of America (FDRA) released today revealed that tariff and trade policy are top of mind for U.S. shoe executives in the third quarter.

The FDRA’s Q3 2024 Shoe Executive Business Survey showed that a record-high number of executives have cited governmental actions on tariffs, taxes and trade as their companies most prominent issues likely to define business over the next six months. The data comes as the U.S. gears up for a presidential election in November that will likely have major ramifications for the industry either way.

For example,?Donald Trump?has said that if he wins the November presidential election, he might impose a 60 percent tariff on all goods imported from China and a general 10 percent tariff on all other imported goods. On the other hand, Kamala Harris’ tariff policies are expected to be a continuation of President Joe Biden’s policies, which includes keeping the burdensome Section 301 rates in place.

“Our Q3 Shoe Executive Survey reflects both the optimism and the challenges facing the footwear industry,” said FDRA president and chief executive officer Matt Priest in a statement. “With trade policy looming large in a presidential election year and consumer behavior constantly evolving, our members are prepared to navigate these uncertainties. FDRA will continue to provide the tools and insights they need to succeed.”

Erik and Pete Nordstrom Offer $3.8 Billion to Buy the?Retailer

Brothers Erik and Pete Nordstrom, along with other members of the Nordstrom family and Mexican retailer Liverpool, have offered to acquire all of the outstanding shares of the company the group does not already own for $23 a share in cash for a total of $3.8 billion.

In pre-market trading, Nordstrom’s stock price was down $0.07, or 0.31 percent, to $22.75.

The offer was received by a special committee of the board of directors of Nordstrom Inc., which confirmed the receipt of it on Wednesday morning.

The proposal states that the merger consideration would be financed through a combination of rollover equity and cash commitments by members of the Nordstrom family and Liverpool and?$250 million?in new bank financing, with the existing indebtedness of the company to remain outstanding. Mexico’s Liverpool department store chain had a 9.63 percent stake in Nordstrom as of March 31, 2024. Liverpool first purchased Nordstrom stock in 2022.

The special committee, composed of independent and disinterested directors, was formed in response to interest expressed by?Erik and Pete Nordstrom?earlier this year in exploring a possible transaction. Erik is chief executive officer of Nordstrom, and Pete is president and chief brand officer.

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