Yahoo Finance DICK'S Sporting (DKS) Growth Moves Hold Promise: Apt to Buy?
DICK'S Sporting Goods, Inc. DKS is well-poised to tap the positive trends in the sporting industry, thanks to its robust strategies including merchandising initiatives and store-related efforts. The company is gaining from brand strength and demand for its products that resonate well with customers. Undoubtedly, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing and efficiently controlling expenses.
Let’s Delve Deeper
DICK’S Sporting is emphasizing the omnichannel athlete experience to drive solid athlete engagement. It has been enhancing service levels at its digital and store experiences to cater well to athletes. During the fiscal first quarter, the company witnessed growth in the omnichannel athletes’ performance. It also continues to invest in the digital capabilities.
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Further, the company is making significant investments to reposition its portfolio to deliver an elevated omnichannel athlete experience. Management expects House of Sport and the next-generation 50,000 square-foot DICK's store to boost strong omnichannel athlete engagement, and in turn, generate huge sales and profitability.
DICK’S Sporting’s store-related efforts are on track. The company had launched DICK'S House of Sport, Golf Galaxy Performance Center, Public Lands and Going, Going, Gone!, which have been performing well. In the fiscal first quarter, it opened two House of Sport locations. It remains on track to introduce six additional stores this year.
The company also opened two next-generation 50K locations in the first quarter of fiscal 2024 and looks forward to opening stores in additional 14 locations in the current year. The total store count was 863, including 106 Golf Galaxy stores, seven Public Lands stores and 18 Going Going Gone! stores and other specialty concept stores, as of May 4. By 2027, it anticipates opening 75 to 100 House of Sport stores nationwide.
DICK’S Sporting Goods has been benefiting from the brand strength and continued market share gains. The company is on track with business optimization to streamline the overall cost structure. Also, strong comparable store sales (comps) on healthy transaction growth are aiding the company’s overall results.
For fiscal 2024, management expects net sales in the range of $13.1-$13.2 billion and comps growth in the band of 2-3%. The gross margin is likely to expand modestly year over year. DKS envisions adjusted earnings in the band of $13.35-$13.75 per share compared with the earlier guided range of $12.85-$13.25 per share.
Buoyed by such strengths, shares of this sporting goods dealer have gained 50.7% versus the industry’s 1.5% growth in the past six months.
Given all the positives, this Zacks Rank #2 (Buy) company seems to deserve a place in your investment bucket. Analysts seem quite optimistic about the company. The Zacks Consensus Estimate for fiscal 2024 sales and earnings per share (EPS) is currently pegged at $13.2 billion and $13.76, respectively. These estimates indicate corresponding growth of 1.8% and 6.6% year over year. The consensus mark for the next fiscal year’s sales and EPS is $13.8 billion and $14.72, respectively, implying a year-over-year increase of 4.6% and 7%.
Other Key Picks
We have highlighted three other top-ranked stocks, namely Abercrombie & Fitch ANF, Gap GPS and Deckers DECK.
Abercrombie & Fitch, a leading casual apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales indicates growth of 10.4% from the year-ago reported figure. ANF delivered an earnings surprise of 28.9% in the last reported quarter.
Gap, a leading apparel retailer, currently sports a Zacks Rank of 1. GPS delivered an average earnings surprise of 202.7% in the trailing four quarters.
The Zacks Consensus Estimate for Gap’s current financial-year sales indicates growth of 0.2% from the year-ago reported figure.
Deckers, a footwear and accessories dealer, currently carries a Zacks Rank of 2. DECK delivered an average earnings surprise of 42.8% in the trailing four quarters.
The Zacks Consensus Estimate for Deckers’ current financial-year sales indicates growth of 15.6% from the year-ago reported figure.
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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
The Gap, Inc. (GPS) : Free Stock Analysis Report
DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
