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DICK'S Sporting Goods, Inc. (DKS - Free Report) posted impressive second-quarter fiscal 2024 results, wherein the bottom and top lines beat the Zacks Consensus Estimate. Both earnings and sales also improved year over year. Despite the challenging macroeconomic environment, the company has been benefiting from its strategic efforts and continued market share gains. It is on track with business optimization to streamline the overall cost structure. Robust omnichannel athlete experience and unique product assortment are added catalysts.
Management remains committed to digital innovation. During the reported quarter, more than 6 million unique users engaged with GameChanger, reflecting a rise of 11% from the prior year. This averages nearly 45 minutes per day on the app. GameChanger allows the company to connect to athletes beyond the traditional shopping experience, thus strengthening leadership in sport.
Shares of the company gained nearly 5% in the trading session on Wednesday. Impressive fiscal second-quarter results, coupled with raised comparable sales (comps) and earnings per share (EPS) outlook for fiscal 2024, lifted investors’ sentiments. DKS’ shares have gained 23.5% in the past six months against the industry’s 15% decline.
DKS’ Quarterly Performance: Key Metrics and Insights
Adjusted EPS were $4.37, up 55% from the year-ago figure of $2.82. Also, the metric beat the Zacks Consensus Estimate of earnings of $3.77 per share.
Net sales of $3,474 million improved 7.8% year over year and surpassed the consensus estimate of $3,432 million. The upside was driven by comps and healthy transaction growth.
DICK'S Sporting Goods, Inc. Price, Consensus and EPS Surprise
Consolidated comps grew 4.5% year over year. We estimated the metric to grow 5.7%. The upside was driven by higher transactions and average tickets.
DKS Records Higher Margins & Expenses
Gross profit rose 15% year over year to $1,275.7 million and surpassed our estimate of $1,207.6 million. Meanwhile, the margin expanded 230 basis points (bps) year over year to 36.7%.
The adjusted SG&A expense rate of 22.6% fell 80 bps year over year. Adjusted SG&A expenses, in dollar terms, increased 4.1% to $786.3 million and missed our estimate of $802.5 million.
DKS’ Financial Health Snapshot
DICK’S Sporting ended the fiscal second quarter with cash and cash equivalents of $1.7 billion and no outstanding borrowings under the revolving credit facility. It had a total debt of $1.5 billion as of Aug. 3, 2024. Total inventory rose 10.3% year over year to $3.2 billion.
This Zacks Rank #2 (Buy) company repurchased 0.8 million shares under its share repurchase program for $163.6 million in the 26 weeks ended Aug. 3, 2024. It had $616 million remaining under its authorization as of the same date. It paid quarterly dividends of $183.1 million.
On Sept. 3, 2024, the company's board declared a quarterly cash dividend of $1.10 per share on its common and Class B common stock. This is payable on Oct. 4, 2024, to stockholders of record as of Sept. 20.
As of Aug. 3, 2024, net capital expenditure was $325.5 million. DICK’S Sporting continues to project capital expenditure of $900 million on a gross basis and $800 million on a net basis for fiscal 2024.
In the reported quarter, the company opened two DICK'S Sporting Goods and five Specialty Concept stores. The total store count was 861, including 108 Golf Galaxy stores, eight Public Lands stores and 20 Going Going Gone! stores as of Aug. 3, 2024.
What to Expect From DKS in Fiscal 2024?
Management raised its comps and EPS view for fiscal 2024. The company now expects comps growth to be in the band of 2.5-3.5% compared with the prior-expected growth range of 2-3%. It still expects net sales to be in the range of $13.1-$13.2 billion.
DKS now envisions adjusted earnings to be in the band of $13.55-$13.90 per share compared with the earlier guided range of $13.35-$13.75. The adjusted earnings view assumes 83 million shares outstanding as of fiscal 2024. Also, tthe company’s effective tax rate is expected to be around 23%.
Management forecasts the gross margin to grow year over year compared with the prior expectation of a modest expansion. EBT margin is likely to be at 11.2% at the midpoint compared with 11.1% guided previously. It expects modest deleveraged adjusted SG&A expenses year over year, thanks to strategic investments to aid growth in the long haul. DICK’S Sporting envisions pre-opening expenses for the second half of fiscal 2024 to be moderately higher than the first half, led by the timing and mix of its store openings. Much of such expenses will fall in the third quarter.
Boot Barn, a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has a trailing four-quarter earnings surprise of 7.1%, on average. The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS indicates growth of 10.7% and 8.9%, respectively, from the year-ago figures.
Abercrombie, a leading casual apparel retailer, currently sports a Zacks Rank of 1. ANF delivered an earnings surprise of 28.9% in the last reported quarter. The Zacks Consensus Estimate for Abercrombie’s current financial-year sales indicates growth of 11.5% from the year-ago figure.
Deckers, a footwear and accessories dealer, currently carries a Zacks Rank #2. DECK delivered an average earnings surprise of 47.2% in each of the trailing four quarters. The Zacks Consensus Estimate for Deckers’ current financial-year sales indicates growth of 11.5% from the year-ago figure.
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DICK'S Sporting's Stock Gains on Q2 Earnings Beat & Raised FY24 View
DICK'S Sporting Goods, Inc. (DKS - Free Report) posted impressive second-quarter fiscal 2024 results, wherein the bottom and top lines beat the Zacks Consensus Estimate. Both earnings and sales also improved year over year. Despite the challenging macroeconomic environment, the company has been benefiting from its strategic efforts and continued market share gains. It is on track with business optimization to streamline the overall cost structure. Robust omnichannel athlete experience and unique product assortment are added catalysts.
Management remains committed to digital innovation. During the reported quarter, more than 6 million unique users engaged with GameChanger, reflecting a rise of 11% from the prior year. This averages nearly 45 minutes per day on the app. GameChanger allows the company to connect to athletes beyond the traditional shopping experience, thus strengthening leadership in sport.
Shares of the company gained nearly 5% in the trading session on Wednesday. Impressive fiscal second-quarter results, coupled with raised comparable sales (comps) and earnings per share (EPS) outlook for fiscal 2024, lifted investors’ sentiments. DKS’ shares have gained 23.5% in the past six months against the industry’s 15% decline.
DKS’ Quarterly Performance: Key Metrics and Insights
Adjusted EPS were $4.37, up 55% from the year-ago figure of $2.82. Also, the metric beat the Zacks Consensus Estimate of earnings of $3.77 per share.
Net sales of $3,474 million improved 7.8% year over year and surpassed the consensus estimate of $3,432 million. The upside was driven by comps and healthy transaction growth.
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
Consolidated comps grew 4.5% year over year. We estimated the metric to grow 5.7%. The upside was driven by higher transactions and average tickets.
DKS Records Higher Margins & Expenses
Gross profit rose 15% year over year to $1,275.7 million and surpassed our estimate of $1,207.6 million. Meanwhile, the margin expanded 230 basis points (bps) year over year to 36.7%.
The adjusted SG&A expense rate of 22.6% fell 80 bps year over year. Adjusted SG&A expenses, in dollar terms, increased 4.1% to $786.3 million and missed our estimate of $802.5 million.
DKS’ Financial Health Snapshot
DICK’S Sporting ended the fiscal second quarter with cash and cash equivalents of $1.7 billion and no outstanding borrowings under the revolving credit facility. It had a total debt of $1.5 billion as of Aug. 3, 2024. Total inventory rose 10.3% year over year to $3.2 billion.
This Zacks Rank #2 (Buy) company repurchased 0.8 million shares under its share repurchase program for $163.6 million in the 26 weeks ended Aug. 3, 2024. It had $616 million remaining under its authorization as of the same date. It paid quarterly dividends of $183.1 million.
On Sept. 3, 2024, the company's board declared a quarterly cash dividend of $1.10 per share on its common and Class B common stock. This is payable on Oct. 4, 2024, to stockholders of record as of Sept. 20.
As of Aug. 3, 2024, net capital expenditure was $325.5 million. DICK’S Sporting continues to project capital expenditure of $900 million on a gross basis and $800 million on a net basis for fiscal 2024.
In the reported quarter, the company opened two DICK'S Sporting Goods and five Specialty Concept stores. The total store count was 861, including 108 Golf Galaxy stores, eight Public Lands stores and 20 Going Going Gone! stores as of Aug. 3, 2024.
What to Expect From DKS in Fiscal 2024?
Management raised its comps and EPS view for fiscal 2024. The company now expects comps growth to be in the band of 2.5-3.5% compared with the prior-expected growth range of 2-3%. It still expects net sales to be in the range of $13.1-$13.2 billion.
DKS now envisions adjusted earnings to be in the band of $13.55-$13.90 per share compared with the earlier guided range of $13.35-$13.75. The adjusted earnings view assumes 83 million shares outstanding as of fiscal 2024. Also, tthe company’s effective tax rate is expected to be around 23%.
Management forecasts the gross margin to grow year over year compared with the prior expectation of a modest expansion. EBT margin is likely to be at 11.2% at the midpoint compared with 11.1% guided previously. It expects modest deleveraged adjusted SG&A expenses year over year, thanks to strategic investments to aid growth in the long haul. DICK’S Sporting envisions pre-opening expenses for the second half of fiscal 2024 to be moderately higher than the first half, led by the timing and mix of its store openings. Much of such expenses will fall in the third quarter.
More Key Picks
We have highlighted three other better-ranked stocks, namely Boot Barn (BOOT - Free Report) , Abercombie (ANF - Free Report) and Deckers (DECK - Free Report) .
Boot Barn, a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has a trailing four-quarter earnings surprise of 7.1%, on average. The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS indicates growth of 10.7% and 8.9%, respectively, from the year-ago figures.
Abercrombie, a leading casual apparel retailer, currently sports a Zacks Rank of 1. ANF delivered an earnings surprise of 28.9% in the last reported quarter. The Zacks Consensus Estimate for Abercrombie’s current financial-year sales indicates growth of 11.5% from the year-ago figure.
Deckers, a footwear and accessories dealer, currently carries a Zacks Rank #2. DECK delivered an average earnings surprise of 47.2% in each of the trailing four quarters. The Zacks Consensus Estimate for Deckers’ current financial-year sales indicates growth of 11.5% from the year-ago figure.