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DICK'S Stock Price Increases 42% YTD: Does It Have More Room to Run?
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DICK’S Sporting Goods Inc. (DKS - Free Report) stock has witnessed an uptrend from the start of 2024. Solid strategic efforts, brand strength and continued market share gains have driven the stock’s momentum. The company is also positioned to benefit from enhanced digital and store experiences to cater to athletes’ needs.
The stock of the prominent sporting goods retailer has garnered year-to-date growth of 42% against the industry’s decline of 1.5%. The company also outperformed the broader Zacks Retail-Wholesale sector and the S&P 500's rallies of 19.6% and 20.5%, respectively, in the same period.
At the current price of $208.7, the stock trades at a 12.8% discount to its 52-week high of $239.3. This indicates that the stock has further upside potential from here.
DKS Stock’s YTD Performance
Image Source: Zacks Investment Research
DICK’S trades above the 200-day moving average, indicating robust upward momentum and price stability. This technical strength reflects positive market perception, and confidence in DICK’S financial health and prospects.
What Holds Up DKS Stock?
The company stays ahead of the competition due to its ability to create a seamless experience for athletes. Robust omnichannel athlete experience and unique product assortment are the key growth catalysts. DICK’S is focused on persistent investments to provide the best omni-channel athlete experience by redefining its stores and digital portals.
Management has been committed to digital innovation, which is critical for omni-channel success. GameChanger, the company’s new premier live-streaming mobile sports app for youth sports, positions it well for long-term growth. Through the app, DKS is on track to explore the fast-growing, multibillion-dollar youth sports technology market, strengthening its leadership in sports.
In second-quarter fiscal 2024, 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.
The Pittsburgh-based retailer has also been keen on offering exciting DICK’S store concepts to customers. The company’s various concept stores, including DICK’S Sporting Goods, Golf Galaxy, Public Lands and Going Going Gone, have been performing well. Management expects House of Sport and the company’s next-generation 50,000-square-foot DICK's store to boost strong omnichannel athlete engagement, and generate huge sales and profitability.
The company is well-placed as the go-to destination for sports in the United States due to its commitment to providing access to differentiated, on-trend products. It is optimistic about the product pipeline from its key brand partners and confident about its private brands, which resonate well with customers.
Guidance & Upward Estimate Trajectory
DICK’S outlook for fiscal 2024 remains robust, anticipating net sales of $13.1-$13.2 billion, with comparable sales (comps) growth of 2.5-3.5% and adjusted earnings of $13.55-$13.90 per share. These expectiations indicate increases from the sales of $13 billion and EPS of $12.91 reported in fiscal 2023.
The Zacks Consensus Estimate for DKS’s fiscal 2024 and 2025 earnings per share rose 0.7% and 0.1%, respectively, in the last 30 days. The upward revision in earnings estimates indicates analysts’ increasing confidence in the stock.
Image Source: Zacks Investment Research
For fiscal 2024, the Zacks Consensus Estimate for DKS’s sales and EPS implies 2.1% and 7.7% year-over-year growth, respectively. The consensus mark for fiscal 2025 sales and earnings indicates 4.4% and 6.3% year-over-year increases, respectively.
DKS's Valuation Discount
DICK’S is currently trading at a discount than its industry on a forward 12-month P/E basis, making the stock an attractive pick for investors. The company is currently trading at a forward 12-month P/E ratio of 14.41X, which is below the industry average of 16.87X and the S&P 500’s average of 21.92X.
Image Source: Zacks Investment Research
Can DKS’s Cost Picture Derail Growth?
While DICK’S looks poised for growth, it is not immune to the uncertain macroeconomic environment, which is hurting companies across most sectors. Higher wage rates, and investments in talent and technology to create a better athlete experience, with marketing investments, have led to elevated costs for the company.
Management expects a modest year-over-year adjusted SG&A expenses deleverage for fiscal 2024, thanks to strategic investments to aid long-term growth. DICK’S 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 fiscal third quarter.
How to Play the Stock?
DKS continues to retain its strong position in the sporting goods industry. The company’s robust strategies, including merchandising initiatives and store-related efforts, bode well. Management’s focus on creating a trend-right merchandise assortment, deepening relations with customers via marketing, and efficiently controlling expenses should drive sustained growth in the future.
The company's robust fundamentals highlight its strong financial health and operational efficiency. The upward price and estimates trajectory, combined with a relatively low valuation than peers, offers an attractive opportunity for investors looking to invest in this profitable retailer. For current shareholders, we suggest staying with this Zacks Rank #3 (Hold) stock with solid long-term potential.
3 Retail-Wholesale Stocks to Consider
We have highlighted three better-ranked stocks from the Retail-Wholesale sector, namely Abercrombie & Fitch (ANF - Free Report) , Build-A-Bear Workshop (BBW - Free Report) and Boot Barn (BOOT - Free Report) .
Abercrombie is a specialty retailer of premium, high-quality casual apparel for men, women and kids. ANF presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 28%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for ANF’s current financial year’s sales and EPS indicates growth of 13.1% and 63.4%, respectively, from the year-ago reported figures.
Build-A-Bear is the leading and only national company providing a make-your-own stuffed animal interactive retail entertainment experience. BBW currently has a Zacks Rank #2 (Buy). It has a trailing four-quarter negative earnings surprise of 3.9%, on average.
The Zacks Consensus Estimate for BBW’s current financial-year sales and earnings suggests growth of 1.2% and 8.8%, respectively, from the year-ago reported figures.
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for BOOT’s current financial-year sales and earnings indicates growth of 11.6% and 10.7%, respectively, from the year-earlier actuals. BOOT has a trailing four-quarter earnings surprise of 7.1%, on average.
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DICK'S Stock Price Increases 42% YTD: Does It Have More Room to Run?
DICK’S Sporting Goods Inc. (DKS - Free Report) stock has witnessed an uptrend from the start of 2024. Solid strategic efforts, brand strength and continued market share gains have driven the stock’s momentum. The company is also positioned to benefit from enhanced digital and store experiences to cater to athletes’ needs.
The stock of the prominent sporting goods retailer has garnered year-to-date growth of 42% against the industry’s decline of 1.5%. The company also outperformed the broader Zacks Retail-Wholesale sector and the S&P 500's rallies of 19.6% and 20.5%, respectively, in the same period.
At the current price of $208.7, the stock trades at a 12.8% discount to its 52-week high of $239.3. This indicates that the stock has further upside potential from here.
DKS Stock’s YTD Performance
Image Source: Zacks Investment Research
DICK’S trades above the 200-day moving average, indicating robust upward momentum and price stability. This technical strength reflects positive market perception, and confidence in DICK’S financial health and prospects.
What Holds Up DKS Stock?
The company stays ahead of the competition due to its ability to create a seamless experience for athletes. Robust omnichannel athlete experience and unique product assortment are the key growth catalysts. DICK’S is focused on persistent investments to provide the best omni-channel athlete experience by redefining its stores and digital portals.
Management has been committed to digital innovation, which is critical for omni-channel success. GameChanger, the company’s new premier live-streaming mobile sports app for youth sports, positions it well for long-term growth. Through the app, DKS is on track to explore the fast-growing, multibillion-dollar youth sports technology market, strengthening its leadership in sports.
In second-quarter fiscal 2024, 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.
The Pittsburgh-based retailer has also been keen on offering exciting DICK’S store concepts to customers. The company’s various concept stores, including DICK’S Sporting Goods, Golf Galaxy, Public Lands and Going Going Gone, have been performing well. Management expects House of Sport and the company’s next-generation 50,000-square-foot DICK's store to boost strong omnichannel athlete engagement, and generate huge sales and profitability.
The company is well-placed as the go-to destination for sports in the United States due to its commitment to providing access to differentiated, on-trend products. It is optimistic about the product pipeline from its key brand partners and confident about its private brands, which resonate well with customers.
Guidance & Upward Estimate Trajectory
DICK’S outlook for fiscal 2024 remains robust, anticipating net sales of $13.1-$13.2 billion, with comparable sales (comps) growth of 2.5-3.5% and adjusted earnings of $13.55-$13.90 per share. These expectiations indicate increases from the sales of $13 billion and EPS of $12.91 reported in fiscal 2023.
The Zacks Consensus Estimate for DKS’s fiscal 2024 and 2025 earnings per share rose 0.7% and 0.1%, respectively, in the last 30 days. The upward revision in earnings estimates indicates analysts’ increasing confidence in the stock.
Image Source: Zacks Investment Research
For fiscal 2024, the Zacks Consensus Estimate for DKS’s sales and EPS implies 2.1% and 7.7% year-over-year growth, respectively. The consensus mark for fiscal 2025 sales and earnings indicates 4.4% and 6.3% year-over-year increases, respectively.
DKS's Valuation Discount
DICK’S is currently trading at a discount than its industry on a forward 12-month P/E basis, making the stock an attractive pick for investors. The company is currently trading at a forward 12-month P/E ratio of 14.41X, which is below the industry average of 16.87X and the S&P 500’s average of 21.92X.
Image Source: Zacks Investment Research
Can DKS’s Cost Picture Derail Growth?
While DICK’S looks poised for growth, it is not immune to the uncertain macroeconomic environment, which is hurting companies across most sectors. Higher wage rates, and investments in talent and technology to create a better athlete experience, with marketing investments, have led to elevated costs for the company.
Management expects a modest year-over-year adjusted SG&A expenses deleverage for fiscal 2024, thanks to strategic investments to aid long-term growth. DICK’S 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 fiscal third quarter.
How to Play the Stock?
DKS continues to retain its strong position in the sporting goods industry. The company’s robust strategies, including merchandising initiatives and store-related efforts, bode well. Management’s focus on creating a trend-right merchandise assortment, deepening relations with customers via marketing, and efficiently controlling expenses should drive sustained growth in the future.
The company's robust fundamentals highlight its strong financial health and operational efficiency. The upward price and estimates trajectory, combined with a relatively low valuation than peers, offers an attractive opportunity for investors looking to invest in this profitable retailer. For current shareholders, we suggest staying with this Zacks Rank #3 (Hold) stock with solid long-term potential.
3 Retail-Wholesale Stocks to Consider
We have highlighted three better-ranked stocks from the Retail-Wholesale sector, namely Abercrombie & Fitch (ANF - Free Report) , Build-A-Bear Workshop (BBW - Free Report) and Boot Barn (BOOT - Free Report) .
Abercrombie is a specialty retailer of premium, high-quality casual apparel for men, women and kids. ANF presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 28%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for ANF’s current financial year’s sales and EPS indicates growth of 13.1% and 63.4%, respectively, from the year-ago reported figures.
Build-A-Bear is the leading and only national company providing a make-your-own stuffed animal interactive retail entertainment experience. BBW currently has a Zacks Rank #2 (Buy). It has a trailing four-quarter negative earnings surprise of 3.9%, on average.
The Zacks Consensus Estimate for BBW’s current financial-year sales and earnings suggests growth of 1.2% and 8.8%, respectively, from the year-ago reported figures.
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for BOOT’s current financial-year sales and earnings indicates growth of 11.6% and 10.7%, respectively, from the year-earlier actuals. BOOT has a trailing four-quarter earnings surprise of 7.1%, on average.