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DICK'S Sporting (DKS) Looks Well-Poised for Q4 Earnings Beat
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DICK’S Sporting Goods Inc. (DKS - Free Report) is expected to register year-over-year sales and earnings growth when it releases fourth-quarter fiscal 2023 results on Mar 14. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $3.8 billion, indicating growth of 4.2% from the year-ago quarter’s reported figure.
The consensus estimate for fiscal fourth-quarter earnings is pegged at $3.34, which suggests a rise of 14% from the year-ago reported number. The consensus mark has moved up 1.2% in the past 30 days.
For fiscal 2024 earnings, the Zacks Consensus Estimate is pegged at $12.41 per share, suggesting 3.1% growth from the year-ago quarter’s reported figure. The consensus mark has moved up by a penny in the past seven days. The consensus estimate for the company’s fiscal 2024 revenues is pegged at $12.9 billion, implying 4% growth from the prior-year quarter’s reported figure.
In the last reported quarter, the company delivered an earnings surprise of 16.8%. It has a trailing four-quarter negative earnings surprise of 0.04%, on average.
DICK'S Sporting Goods, Inc. Price, Consensus and EPS Surprise
DICK’S Sporting has been benefiting from strength in its businesses, strong operational execution and store expansion initiatives. The company has been tapping the positive trends in the sporting industry, thanks to its robust strategies, including merchandising initiatives and store-related efforts.
Strong growth in demand for its key product categories, driven by differentiated assortments across footwear, athletic apparel and team sports, has been aiding its top-line performance. Healthy transaction growth and higher average tickets have led to increased comparable store sales (comps).
On the last reported quarter’s earnings call, management expected comps growth of 0.5-2% for fiscal 2023. Our model predicts comps growth of 1.5% for the fourth quarter of fiscal 2023, with comps expected to increase 2% for fiscal 2023.
The company’s compelling assortment and structural transformation initiatives have been beneficial in recent quarters. Gross margin rates have been benefiting from reduced merchandise margin rates due to the normalization of pricing activity from the prior year. Additionally, lower supply-chain costs have been aiding the gross margin performance. On the last reported quarter’s earnings call, management expected the gross margin rate to improve in fourth-quarter fiscal 2023.
We expect the adjusted gross margin to expand 210 bps year over year to 34.5% for the fiscal fourth quarter and 40 bps to 35% for fiscal 2023.
However, escalating operating costs and expenses amid a high inflationary environment have been weighing on DICK’S Sporting’s margin performance. The company has also been witnessing higher SG&A rates, driven by higher wage rate, and increased investments in talent and technology to create a better athlete experience, as well as investments in marketing. The continuation of higher SG&A expenses and elevated inventory shrink is likely to have partly marred the company’s margins and the bottom line in the to-be-reported quarter.
On the last reported quarter’s earnings call, management anticipated SG&A expenses to deleverage in fiscal 2023 due to the proactive investments in its growth strategies.
As a percentage of sales, we expect adjusted SG&A expenses to increase 120 basis points (bps) to 24.1% for the fiscal fourth quarter and 170 bps to 24.1% for fiscal 2023. In dollar terms, SG&A expenses are expected to increase 7.1% year over year for the fiscal fourth quarter and 11% for fiscal 2023. This is anticipated to have partly offset growth in the gross margin in the to-be-reported quarter. Our model predicts the adjusted operating margin to increase 60 bps to 10.1% for the fiscal fourth quarter and decline 170 bps to 10.4% for fiscal 2023.
What the Zacks Model Unveils
Our proven model conclusively predicts an earnings beat for DICK'S Sporting this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
DICK’S Sporting currently has an Earnings ESP of +1.80% and a Zacks Rank #2.
Other Stocks With Favorable Combination
Here are some other companies that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat in their upcoming releases.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +0.53% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2023 results. The consensus mark for DLTR’s quarterly revenues is pegged at $8.7 billion, which suggests growth of 12.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Dollar Tree’s earnings has moved up by a penny to $2.67 share in the past seven days. The consensus estimate indicates growth of 30.9% from the year-ago quarter’s actual.
Ulta Beauty (ULTA - Free Report) presently has an Earnings ESP of +0.05% and a Zacks Rank #3. The company is likely to register growth in the top and bottom lines when it reports fourth-quarter fiscal 2023 results. The consensus mark for ULTA’s quarterly revenues is pegged at $3.5 billion, which suggests 9% growth from the figure reported in the prior-year quarter.
The consensus mark for ULTA’s quarterly earnings has moved up by a penny in the past 30 days to $7.48 per share. The consensus estimate suggests growth of 12% from the year-ago quarter’s actual.
Dollar General (DG - Free Report) currently has an Earnings ESP of +0.36% and a Zacks Rank of 3. The company is likely to register top and bottom-line declines when it reports fourth-quarter fiscal 2023 results. The consensus mark for DG’s quarterly revenues is pegged at $9.8 billion, which suggests a dip of 4.2% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for DG’s earnings has moved up by a penny to $1.74 per share in the past 30 days. The consensus estimate indicates a 41.2% decrease from the year-ago quarter’s reported figure.
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DICK'S Sporting (DKS) Looks Well-Poised for Q4 Earnings Beat
DICK’S Sporting Goods Inc. (DKS - Free Report) is expected to register year-over-year sales and earnings growth when it releases fourth-quarter fiscal 2023 results on Mar 14. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $3.8 billion, indicating growth of 4.2% from the year-ago quarter’s reported figure.
The consensus estimate for fiscal fourth-quarter earnings is pegged at $3.34, which suggests a rise of 14% from the year-ago reported number. The consensus mark has moved up 1.2% in the past 30 days.
For fiscal 2024 earnings, the Zacks Consensus Estimate is pegged at $12.41 per share, suggesting 3.1% growth from the year-ago quarter’s reported figure. The consensus mark has moved up by a penny in the past seven days. The consensus estimate for the company’s fiscal 2024 revenues is pegged at $12.9 billion, implying 4% growth from the prior-year quarter’s reported figure.
In the last reported quarter, the company delivered an earnings surprise of 16.8%. It has a trailing four-quarter negative earnings surprise of 0.04%, on average.
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
Factors to Note
DICK’S Sporting has been benefiting from strength in its businesses, strong operational execution and store expansion initiatives. The company has been tapping the positive trends in the sporting industry, thanks to its robust strategies, including merchandising initiatives and store-related efforts.
Strong growth in demand for its key product categories, driven by differentiated assortments across footwear, athletic apparel and team sports, has been aiding its top-line performance. Healthy transaction growth and higher average tickets have led to increased comparable store sales (comps).
On the last reported quarter’s earnings call, management expected comps growth of 0.5-2% for fiscal 2023. Our model predicts comps growth of 1.5% for the fourth quarter of fiscal 2023, with comps expected to increase 2% for fiscal 2023.
The company’s compelling assortment and structural transformation initiatives have been beneficial in recent quarters. Gross margin rates have been benefiting from reduced merchandise margin rates due to the normalization of pricing activity from the prior year. Additionally, lower supply-chain costs have been aiding the gross margin performance. On the last reported quarter’s earnings call, management expected the gross margin rate to improve in fourth-quarter fiscal 2023.
We expect the adjusted gross margin to expand 210 bps year over year to 34.5% for the fiscal fourth quarter and 40 bps to 35% for fiscal 2023.
However, escalating operating costs and expenses amid a high inflationary environment have been weighing on DICK’S Sporting’s margin performance. The company has also been witnessing higher SG&A rates, driven by higher wage rate, and increased investments in talent and technology to create a better athlete experience, as well as investments in marketing. The continuation of higher SG&A expenses and elevated inventory shrink is likely to have partly marred the company’s margins and the bottom line in the to-be-reported quarter.
On the last reported quarter’s earnings call, management anticipated SG&A expenses to deleverage in fiscal 2023 due to the proactive investments in its growth strategies.
As a percentage of sales, we expect adjusted SG&A expenses to increase 120 basis points (bps) to 24.1% for the fiscal fourth quarter and 170 bps to 24.1% for fiscal 2023. In dollar terms, SG&A expenses are expected to increase 7.1% year over year for the fiscal fourth quarter and 11% for fiscal 2023. This is anticipated to have partly offset growth in the gross margin in the to-be-reported quarter. Our model predicts the adjusted operating margin to increase 60 bps to 10.1% for the fiscal fourth quarter and decline 170 bps to 10.4% for fiscal 2023.
What the Zacks Model Unveils
Our proven model conclusively predicts an earnings beat for DICK'S Sporting this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
DICK’S Sporting currently has an Earnings ESP of +1.80% and a Zacks Rank #2.
Other Stocks With Favorable Combination
Here are some other companies that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat in their upcoming releases.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +0.53% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports fourth-quarter fiscal 2023 results. The consensus mark for DLTR’s quarterly revenues is pegged at $8.7 billion, which suggests growth of 12.4% from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dollar Tree’s earnings has moved up by a penny to $2.67 share in the past seven days. The consensus estimate indicates growth of 30.9% from the year-ago quarter’s actual.
Ulta Beauty (ULTA - Free Report) presently has an Earnings ESP of +0.05% and a Zacks Rank #3. The company is likely to register growth in the top and bottom lines when it reports fourth-quarter fiscal 2023 results. The consensus mark for ULTA’s quarterly revenues is pegged at $3.5 billion, which suggests 9% growth from the figure reported in the prior-year quarter.
The consensus mark for ULTA’s quarterly earnings has moved up by a penny in the past 30 days to $7.48 per share. The consensus estimate suggests growth of 12% from the year-ago quarter’s actual.
Dollar General (DG - Free Report) currently has an Earnings ESP of +0.36% and a Zacks Rank of 3. The company is likely to register top and bottom-line declines when it reports fourth-quarter fiscal 2023 results. The consensus mark for DG’s quarterly revenues is pegged at $9.8 billion, which suggests a dip of 4.2% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for DG’s earnings has moved up by a penny to $1.74 per share in the past 30 days. The consensus estimate indicates a 41.2% decrease from the year-ago quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.