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DICK'S Sporting Goods, Inc. (DKS - Free Report) has posted better-than-expected top and bottom lines for third-quarter fiscal 2022. The company has been benefiting from compelling assortment and its structural transformation in recent years.
Adjusted earnings were $2.60 per share in the fiscal third quarter, down 18% from the prior-year figure of $3.19. The decline can be attributed to a dismal gross margin and higher operating expenses in the reported quarter. However, adjusted earnings beat the Zacks Consensus Estimate of $2.24 per share.
Net sales of $2,959 million improved 7.7% year over year and surpassed the Zacks Consensus Estimate of $2,701 million. Also, net sales advanced 50.8% from third-quarter fiscal 2019, driven by strength in its core strategies.
Consolidated comparable store sales (comps) grew 6.5%, down from comps growth of 12.8% in the year-ago quarter. Also, DKS witnessed comps growth of 23.2% and 6% on a 2-year stack basis and a 3-year basis, respectively, in the fiscal third quarter.
DICK'S Sporting Goods, Inc. Price, Consensus and EPS Surprise
The gross margin contracted 423 basis points year over year to 34.2% in the fiscal third quarter due to high promotional activity.
In the fiscal third quarter, the SG&A expense rate of 23% remained almost flat year over year. SG&A expenses, in dollar terms, increased 7.6% to $679.7 million, driven by continued investment in hourly wage rates and talent to support its growth strategies.
Financial Aspects
DICK’S Sporting ended the fiscal third quarter with cash and cash equivalents of $1,4378 million, and no borrowings under the $1.6-billion revolving credit. Total inventory improved 35% year over year to $3,361.1 million as of Jul 30, 2022.
The company paid out dividends of $124 million and repurchased 4.4 million shares for $361 million. On Nov 21, DICK’s Sporting declared a quarterly dividend of 48.75 cents per share on common stock and Class B common stock, payable Dec 30, to its shareholders of record as of Dec 9.
In the nine months ending Oct 29, 2022, net capital expenditure amounted to $274.3 million. DICK’S Sporting projects capital expenditure of $400-$425 million on a gross basis and $340-$365 million on a net basis for fiscal 2022.
Guidance
Driven by the impressive quarterly results, this Zacks Rank #3 (Hold) company has raised its fiscal 2022 view. For fiscal 2022, the company expects a comp to be negative 1.5-3%, which compares favorably with the earlier mentioned range between negative 6% and negative 2%. The company envisions adjusted earnings of $11.50-$12.10 per share versus the prior mentioned $10.00-$12.00. The adjusted earnings view assumes 88 million shares outstanding as of fiscal 2022.
DICK’s Sporting anticipates GAAP earnings per share of $10.5-$11.1 for fiscal 2022 compared with the $8.85-$10.55 mentioned earlier. The revised view assumes shares outstanding of 99 million as of fiscal 2022. The company’s GAAP earnings view does not include share repurchases beyond that worth $360 million repurchased in the first nine months ending Oct 29.
Price Performance
Image Source: Zacks Investment Research
Shares of DKS have lost 3.4% in the past three months against the industry’s 5% growth.
Wingstop currently sports a Zacks Rank #1 (Strong Buy). WING has a long-term earnings growth rate of 11%. Shares of WING have declined 9.2% in the past year.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.1% and 16.4%, respectively, from the year-ago period’s reported levels.
Dollar General, a discount retailer, currently carries a Zacks Rank #2 (Buy). DG has an expected EPS growth rate of 11.1% for three to five years.
The Zacks Consensus Estimate for Dollar General’s current financial-year revenues and EPS suggests growth of 10.8% and 13.8%, respectively, from the year-ago reported figures. Dollar General has a trailing four-quarter earnings surprise of 2.2%, on average.
Chipotle Mexican Grill, an operator of fast-casual restaurants, currently carries a Zacks Rank #2. The company’s expected EPS growth rate for three to five years is 23.4%.
The Zacks Consensus Estimate for Chipotle Mexican Grill’s current financial-year revenues and EPS suggests growth of 15.2% and 30.8%, respectively, from the year-ago reported figures. CMG has a trailing four-quarter earnings surprise of 4.1%, on average.
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DICK'S Sporting's (DKS) Beats on Q3 Earnings & Sales, Ups View
DICK'S Sporting Goods, Inc. (DKS - Free Report) has posted better-than-expected top and bottom lines for third-quarter fiscal 2022. The company has been benefiting from compelling assortment and its structural transformation in recent years.
Adjusted earnings were $2.60 per share in the fiscal third quarter, down 18% from the prior-year figure of $3.19. The decline can be attributed to a dismal gross margin and higher operating expenses in the reported quarter. However, adjusted earnings beat the Zacks Consensus Estimate of $2.24 per share.
Net sales of $2,959 million improved 7.7% year over year and surpassed the Zacks Consensus Estimate of $2,701 million. Also, net sales advanced 50.8% from third-quarter fiscal 2019, driven by strength in its core strategies.
Consolidated comparable store sales (comps) grew 6.5%, down from comps growth of 12.8% in the year-ago quarter. Also, DKS witnessed comps growth of 23.2% and 6% on a 2-year stack basis and a 3-year basis, respectively, in the fiscal third quarter.
DICK'S Sporting Goods, Inc. Price, Consensus and EPS Surprise
DICK'S Sporting Goods, Inc. price-consensus-eps-surprise-chart | DICK'S Sporting Goods, Inc. Quote
The gross margin contracted 423 basis points year over year to 34.2% in the fiscal third quarter due to high promotional activity.
In the fiscal third quarter, the SG&A expense rate of 23% remained almost flat year over year. SG&A expenses, in dollar terms, increased 7.6% to $679.7 million, driven by continued investment in hourly wage rates and talent to support its growth strategies.
Financial Aspects
DICK’S Sporting ended the fiscal third quarter with cash and cash equivalents of $1,4378 million, and no borrowings under the $1.6-billion revolving credit. Total inventory improved 35% year over year to $3,361.1 million as of Jul 30, 2022.
The company paid out dividends of $124 million and repurchased 4.4 million shares for $361 million. On Nov 21, DICK’s Sporting declared a quarterly dividend of 48.75 cents per share on common stock and Class B common stock, payable Dec 30, to its shareholders of record as of Dec 9.
In the nine months ending Oct 29, 2022, net capital expenditure amounted to $274.3 million. DICK’S Sporting projects capital expenditure of $400-$425 million on a gross basis and $340-$365 million on a net basis for fiscal 2022.
Guidance
Driven by the impressive quarterly results, this Zacks Rank #3 (Hold) company has raised its fiscal 2022 view. For fiscal 2022, the company expects a comp to be negative 1.5-3%, which compares favorably with the earlier mentioned range between negative 6% and negative 2%. The company envisions adjusted earnings of $11.50-$12.10 per share versus the prior mentioned $10.00-$12.00. The adjusted earnings view assumes 88 million shares outstanding as of fiscal 2022.
DICK’s Sporting anticipates GAAP earnings per share of $10.5-$11.1 for fiscal 2022 compared with the $8.85-$10.55 mentioned earlier. The revised view assumes shares outstanding of 99 million as of fiscal 2022. The company’s GAAP earnings view does not include share repurchases beyond that worth $360 million repurchased in the first nine months ending Oct 29.
Price Performance
Image Source: Zacks Investment Research
Shares of DKS have lost 3.4% in the past three months against the industry’s 5% growth.
Stocks to Consider
Here are three better-ranked stocks to consider — Wingstop (WING - Free Report) , Dollar General (DG - Free Report) and Chipotle Mexican Grill (CMG - Free Report) .
Wingstop currently sports a Zacks Rank #1 (Strong Buy). WING has a long-term earnings growth rate of 11%. Shares of WING have declined 9.2% in the past year.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.1% and 16.4%, respectively, from the year-ago period’s reported levels.
Dollar General, a discount retailer, currently carries a Zacks Rank #2 (Buy). DG has an expected EPS growth rate of 11.1% for three to five years.
The Zacks Consensus Estimate for Dollar General’s current financial-year revenues and EPS suggests growth of 10.8% and 13.8%, respectively, from the year-ago reported figures. Dollar General has a trailing four-quarter earnings surprise of 2.2%, on average.
Chipotle Mexican Grill, an operator of fast-casual restaurants, currently carries a Zacks Rank #2. The company’s expected EPS growth rate for three to five years is 23.4%.
The Zacks Consensus Estimate for Chipotle Mexican Grill’s current financial-year revenues and EPS suggests growth of 15.2% and 30.8%, respectively, from the year-ago reported figures. CMG has a trailing four-quarter earnings surprise of 4.1%, on average.