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Dick's Sporting Goods, Campbell Soup, GMS, Beacon Roofing Supply and Builders FirstSource highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – July 29, 2021 – Zacks Equity Research Shares of DICK's Sporting Goods Inc. (DKS - Free Report) as the Bull of the Day, Campbell Soup Company (CPB - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on GMS Inc. (GMS - Free Report) , Beacon Roofing Supply, Inc. (BECN - Free Report) and Builders FirstSource, Inc. (BLDR - Free Report) .
Dick's Sporting Goods is a popular, well-known retailer where customers can find a wide range of sporting goods products: athletic shoes; fitness apparel and accessories; and a broad selection of outdoor and athletic equipment for team sports, camping, fishing, tennis, golf, and water sports.
Q1 Earnings Recap
Back in May, DKS reported better-than-expected first quarter results, impressing Wall Street across the board.
Net sales soared 119% year-over-year (and up 58% compared to Q1 2019) to $2.92 billion and adjusted earnings of $3.79 per share easily beat the consensus estimate.
Overall, Dick's continued to see strength online and in its brick-and-mortar stores. Consolidated same-store sales increased 115% year-over-year, which includes e-commerce growth of 14%. The company's online business has grown from 13% of total net sales in Q1 2019 to 20% in the last quarter.
CEO Edward Stack said in a statement that "We are in a great lane right now, and 2021 will be our boldest and most transformational year in the company's history. We believe the future of retail is experiential, powered by technology and a world-class omni-channel operating model."
DKS ended the quarter with roughly $1.86 billion in cash and cash equivalents. The retailer also announced that it plans to repurchase a minimum of $200 million, or more than 2.2%, of its common stock this year.
Investors cheered all the good news that day, sending shares up over 16%.
DKS Is Surging
Year-to-date, shares of Dick's have climbed 82.8% compared to the S&P 500's gain of 17.2%. Estimates have been rising too, and DKS is a Zacks Rank #1 (Strong Buy) right now.
For the current fiscal year, three analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $7.84 per share to $8.92 per share. Earnings are expected to see double-digit growth for fiscal 2021, increasing more than 45%.
Like fellow sports and outdoor recreational retailers, DKS saw a sales boom during the pandemic as people stuck at home looked to spend more and more time outside. The company benefited from social distancing as well, as outdoor activities allowed people to safely spend time with their loved ones.
Looking ahead, Dick's Sporting Goods has plans to invest in technology that will make its shopping experience even better for customers, and the record revenue generated in 2020 shows investors and analysts that it has the ability to sustain business growth during periods of economic uncertainty.
Even more, Dick's has a solid dividend that yields 1.4% on an annual basis.
If you're an investor searching for a retail stock to add to your portfolio, make sure to keep DKS on your shortlist.
Based in Camden, NJ, Campbell Soup, together with its subsidiaries, is a worldwide manufacturer and marketer of high-quality, branded convenience food products. Its brands are sold in approximately 120 countries, but the company's principal operating regions include North America, France, Germany, Belgium, and Australia. Campbell owns widely-recognized brands like the name-sake Campbell's, Pepperidge Farm, Bolthouse Farms, Arnott's, V8, Swanson, Pace, Prego, Royal Dansk, and Garden Fresh Gourmet.
Q3 Earnings Recap
Net sales of $1.98 billion decreased 11% year-over-year, while adjusted EPS dropped 31% to $0.57 per share.
Revenue for Campbell's Meals & Beverages and Snacks segments both declined, down 14% and 8%, respectively. Both divisions were impacted by volume declines within the each portfolio due to less people stocking up on shelf-stable items and pantry essentials than they did during lockdown.
Adjusted gross margin declined 290 basis points to 31.8% because of inflationary impacts and other supply chain costs.
Fiscal year-to-date cash flow from operations decreased from $1.1 billion in the prior year to $881 million.
CEO Mark Clouse explained in the earnings press release that Campbell faced expected and unexpected headwinds in the third quarter, from pronounced inflation-related pressures to the ongoing, negative effects Covid-19 still has on its business.
Bottom Line
CPB is now a Zacks Rank #5 (Strong Sell).
Seven analysts have cut their full year earnings outlook over the past 60 days. Campbell's bottom line is expected to decline 1.36% year-over-year, and the consensus estimate has fallen $0.16 to $2.91 per share for fiscal 2021. Next year's earnings consensus has dropped as well, and Wall Street now expects earnings to decrease a slight 0.88% to $2.88.
Shares have been volatile so far in 2021. Year-to-date, CPB is down 8.8% compared to the S&P 500's gain of 17.2%.
Looking ahead, management anticipates inflationary pressures will continue in Q4; the pandemic will also "remain a headwind from a margin perspective." Net sales are expected to decline 3.5% to 5% and adjusted EPS to be in the range of $2.90 to 42.93 per share, reflecting a year-over-year decline of -2% to -1%.
However, Campbell is still optimistic that it will be able to deliver on the growth strategies it's put in place, and of the "underlying strength" of its brands.
But until then, potential investors may want to wait on the sidelines until the outlook improves.
Additional content:
3 Stocks to Watch Amid Continued Demand for Home Improvement
As the home became the center for learning and working last year when the coronavirus gripped the United States, people began to engage in renovation and home improvement projects to make their stay at home more comfortable. The demand for homes was also steady in 2020, which in turn, increased the people's requirement for home improvement. Researchers at Harvard University found that Americans spent nearly $420 billion on home improvement projects in 2020, as cited in a CBS Los Angeles article.
The vaccination drive across the country is leading to the gradual reopening of the economy but even then, the demand for home improvement projects looks set to sustain, auguring well for home improvement retailers. A Fast Company article, citing the 2021 Houzz & Home Study by Houzz, mentioned that the trends of overall home renovation projects are set to continue in 2021. Respondents stated that they were planning "similar renovation projects this year as well."
The Fast Company article added, citing Marine Sargsyan, Houzz senior economist, that with the shift to the hybrid working model, they anticipate a continued focus on home offices and outdoor projects. Reflective of this trend, spending on home improvement is estimated to grow in 2021. Research assistant Sophia Wedeen, of the Joint Center for Housing Studies of Harvard University ("JCHS"), said that large metro areas are expected to see remodeling gains with an average growth rate of almost 5% compared to an estimated rise of 2% last year, as mentioned in an MReport article.
Wedeen further said, as mentioned in the article, "fully 14 metros are projected to see robust growth above 6% this year, while an additional 17 metros are set for moderate gains between 3 and 6%."
Adding to the positive note, Kitchen Infinity also mentioned in a report citing Home Renovations Statistics and Trends that 52% of Americans are going to spend $15,000 on home repairs this year. The Commerce Department reported that housing starts also increased 6.3% in June as mentioned in a CNBC article.
3 Stocks to Keep a Close Eye On
The trend for home improvement looks ready to sustain even as we move beyond the pandemic. This, in turn, should be beneficial for home improvement retailers that continue to cater to this trend. Keeping that in mind, we have selected three such stocks that carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.
GMS distributes commercial and residential building materials, and so on, serving homebuilders, individuals and others. GMS also recently completed the acquisition of Westside Building Material, an independent distributor of interior building products, for $135 million in cash. This acquisition will allow GMS to expand its reach in major California markets and foray into the Las Vegas market.
Shares of GMS have risen 56.2% year to date and the company currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 19.6% over the past 60 days. The company's expected earnings growth rate for the current year is 34.5%.
Beacon Roofing Supply distributes residential and non-residential roofing materials, and complementary building products. The demand for home improvement seems to have benefitted the company as in the fiscal second quarter of 2021, sales of residential roofing and complementary products rose 18.7% and 9.4%, respectively. Beacon Roofing's new On-Time and Complete Delivery Network, which supports in-store and online customers with enhanced product availability and other features, should also augur well.
Year to date, shares of Beacon Roofing have gained 31.7% and it currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 3.6% over the past 60 days. The company's expected earnings growth rate for the current year is 55.8%.
Builders FirstSource is benefiting from the steady demand for repair and remodeling, and housing as it manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, remodelers and others. The company is also focused on offering innovative digital solutions to its customers and on Jun 29, Builders FirstSource announced that it has entered into a definitive agreement to acquire WTS Paradigm, which provides software development and consulting services to the building products industry.
Shares of Builders First Source have gained 8.3% year to date and it currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased nearly 17% over the past 60 days. The company's expected earnings growth rate for the current year is 55.8%.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Dick's Sporting Goods, Campbell Soup, GMS, Beacon Roofing Supply and Builders FirstSource highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 29, 2021 – Zacks Equity Research Shares of DICK's Sporting Goods Inc. (DKS - Free Report) as the Bull of the Day, Campbell Soup Company (CPB - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on GMS Inc. (GMS - Free Report) , Beacon Roofing Supply, Inc. (BECN - Free Report) and Builders FirstSource, Inc. (BLDR - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Dick's Sporting Goods is a popular, well-known retailer where customers can find a wide range of sporting goods products: athletic shoes; fitness apparel and accessories; and a broad selection of outdoor and athletic equipment for team sports, camping, fishing, tennis, golf, and water sports.
Q1 Earnings Recap
Back in May, DKS reported better-than-expected first quarter results, impressing Wall Street across the board.
Net sales soared 119% year-over-year (and up 58% compared to Q1 2019) to $2.92 billion and adjusted earnings of $3.79 per share easily beat the consensus estimate.
Overall, Dick's continued to see strength online and in its brick-and-mortar stores. Consolidated same-store sales increased 115% year-over-year, which includes e-commerce growth of 14%. The company's online business has grown from 13% of total net sales in Q1 2019 to 20% in the last quarter.
CEO Edward Stack said in a statement that "We are in a great lane right now, and 2021 will be our boldest and most transformational year in the company's history. We believe the future of retail is experiential, powered by technology and a world-class omni-channel operating model."
DKS ended the quarter with roughly $1.86 billion in cash and cash equivalents. The retailer also announced that it plans to repurchase a minimum of $200 million, or more than 2.2%, of its common stock this year.
Investors cheered all the good news that day, sending shares up over 16%.
DKS Is Surging
Year-to-date, shares of Dick's have climbed 82.8% compared to the S&P 500's gain of 17.2%. Estimates have been rising too, and DKS is a Zacks Rank #1 (Strong Buy) right now.
For the current fiscal year, three analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $7.84 per share to $8.92 per share. Earnings are expected to see double-digit growth for fiscal 2021, increasing more than 45%.
Like fellow sports and outdoor recreational retailers, DKS saw a sales boom during the pandemic as people stuck at home looked to spend more and more time outside. The company benefited from social distancing as well, as outdoor activities allowed people to safely spend time with their loved ones.
Looking ahead, Dick's Sporting Goods has plans to invest in technology that will make its shopping experience even better for customers, and the record revenue generated in 2020 shows investors and analysts that it has the ability to sustain business growth during periods of economic uncertainty.
Even more, Dick's has a solid dividend that yields 1.4% on an annual basis.
If you're an investor searching for a retail stock to add to your portfolio, make sure to keep DKS on your shortlist.
Bear of the Day:
Based in Camden, NJ, Campbell Soup, together with its subsidiaries, is a worldwide manufacturer and marketer of high-quality, branded convenience food products. Its brands are sold in approximately 120 countries, but the company's principal operating regions include North America, France, Germany, Belgium, and Australia. Campbell owns widely-recognized brands like the name-sake Campbell's, Pepperidge Farm, Bolthouse Farms, Arnott's, V8, Swanson, Pace, Prego, Royal Dansk, and Garden Fresh Gourmet.
Q3 Earnings Recap
Net sales of $1.98 billion decreased 11% year-over-year, while adjusted EPS dropped 31% to $0.57 per share.
Revenue for Campbell's Meals & Beverages and Snacks segments both declined, down 14% and 8%, respectively. Both divisions were impacted by volume declines within the each portfolio due to less people stocking up on shelf-stable items and pantry essentials than they did during lockdown.
Adjusted gross margin declined 290 basis points to 31.8% because of inflationary impacts and other supply chain costs.
Fiscal year-to-date cash flow from operations decreased from $1.1 billion in the prior year to $881 million.
CEO Mark Clouse explained in the earnings press release that Campbell faced expected and unexpected headwinds in the third quarter, from pronounced inflation-related pressures to the ongoing, negative effects Covid-19 still has on its business.
Bottom Line
CPB is now a Zacks Rank #5 (Strong Sell).
Seven analysts have cut their full year earnings outlook over the past 60 days. Campbell's bottom line is expected to decline 1.36% year-over-year, and the consensus estimate has fallen $0.16 to $2.91 per share for fiscal 2021. Next year's earnings consensus has dropped as well, and Wall Street now expects earnings to decrease a slight 0.88% to $2.88.
Shares have been volatile so far in 2021. Year-to-date, CPB is down 8.8% compared to the S&P 500's gain of 17.2%.
Looking ahead, management anticipates inflationary pressures will continue in Q4; the pandemic will also "remain a headwind from a margin perspective." Net sales are expected to decline 3.5% to 5% and adjusted EPS to be in the range of $2.90 to 42.93 per share, reflecting a year-over-year decline of -2% to -1%.
However, Campbell is still optimistic that it will be able to deliver on the growth strategies it's put in place, and of the "underlying strength" of its brands.
But until then, potential investors may want to wait on the sidelines until the outlook improves.
Additional content:
3 Stocks to Watch Amid Continued Demand for Home Improvement
As the home became the center for learning and working last year when the coronavirus gripped the United States, people began to engage in renovation and home improvement projects to make their stay at home more comfortable. The demand for homes was also steady in 2020, which in turn, increased the people's requirement for home improvement. Researchers at Harvard University found that Americans spent nearly $420 billion on home improvement projects in 2020, as cited in a CBS Los Angeles article.
The vaccination drive across the country is leading to the gradual reopening of the economy but even then, the demand for home improvement projects looks set to sustain, auguring well for home improvement retailers. A Fast Company article, citing the 2021 Houzz & Home Study by Houzz, mentioned that the trends of overall home renovation projects are set to continue in 2021. Respondents stated that they were planning "similar renovation projects this year as well."
The Fast Company article added, citing Marine Sargsyan, Houzz senior economist, that with the shift to the hybrid working model, they anticipate a continued focus on home offices and outdoor projects. Reflective of this trend, spending on home improvement is estimated to grow in 2021. Research assistant Sophia Wedeen, of the Joint Center for Housing Studies of Harvard University ("JCHS"), said that large metro areas are expected to see remodeling gains with an average growth rate of almost 5% compared to an estimated rise of 2% last year, as mentioned in an MReport article.
Wedeen further said, as mentioned in the article, "fully 14 metros are projected to see robust growth above 6% this year, while an additional 17 metros are set for moderate gains between 3 and 6%."
Adding to the positive note, Kitchen Infinity also mentioned in a report citing Home Renovations Statistics and Trends that 52% of Americans are going to spend $15,000 on home repairs this year. The Commerce Department reported that housing starts also increased 6.3% in June as mentioned in a CNBC article.
3 Stocks to Keep a Close Eye On
The trend for home improvement looks ready to sustain even as we move beyond the pandemic. This, in turn, should be beneficial for home improvement retailers that continue to cater to this trend. Keeping that in mind, we have selected three such stocks that carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.
GMS distributes commercial and residential building materials, and so on, serving homebuilders, individuals and others. GMS also recently completed the acquisition of Westside Building Material, an independent distributor of interior building products, for $135 million in cash. This acquisition will allow GMS to expand its reach in major California markets and foray into the Las Vegas market.
Shares of GMS have risen 56.2% year to date and the company currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 19.6% over the past 60 days. The company's expected earnings growth rate for the current year is 34.5%.
Beacon Roofing Supply distributes residential and non-residential roofing materials, and complementary building products. The demand for home improvement seems to have benefitted the company as in the fiscal second quarter of 2021, sales of residential roofing and complementary products rose 18.7% and 9.4%, respectively. Beacon Roofing's new On-Time and Complete Delivery Network, which supports in-store and online customers with enhanced product availability and other features, should also augur well.
Year to date, shares of Beacon Roofing have gained 31.7% and it currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 3.6% over the past 60 days. The company's expected earnings growth rate for the current year is 55.8%.
Builders FirstSource is benefiting from the steady demand for repair and remodeling, and housing as it manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, remodelers and others. The company is also focused on offering innovative digital solutions to its customers and on Jun 29, Builders FirstSource announced that it has entered into a definitive agreement to acquire WTS Paradigm, which provides software development and consulting services to the building products industry.
Shares of Builders First Source have gained 8.3% year to date and it currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased nearly 17% over the past 60 days. The company's expected earnings growth rate for the current year is 55.8%.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.