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Why Is Dick's (DKS) Down 3.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Dick's Sporting Goods (DKS - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dick's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
DICK'S Sporting Goods 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.
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.
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.
The 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, the company’s effective tax rate is expected to be around 23%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -9.87% due to these changes.
VGM Scores
At this time, Dick's has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dick's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Dick's is part of the Zacks Retail - Miscellaneous industry. Over the past month, Ulta Beauty (ULTA - Free Report) , a stock from the same industry, has gained 2.5%. The company reported its results for the quarter ended July 2024 more than a month ago.
Ulta reported revenues of $2.55 billion in the last reported quarter, representing a year-over-year change of +0.9%. EPS of $5.30 for the same period compares with $6.02 a year ago.
Ulta is expected to post earnings of $4.52 per share for the current quarter, representing a year-over-year change of -10.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Ulta. Also, the stock has a VGM Score of A.
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Why Is Dick's (DKS) Down 3.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Dick's Sporting Goods (DKS - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dick's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
DICK'S Sporting's Q2 Earnings Beat & FY24 View Raised
DICK'S Sporting Goods 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.
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.
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.
The 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, the company’s effective tax rate is expected to be around 23%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -9.87% due to these changes.
VGM Scores
At this time, Dick's has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dick's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Dick's is part of the Zacks Retail - Miscellaneous industry. Over the past month, Ulta Beauty (ULTA - Free Report) , a stock from the same industry, has gained 2.5%. The company reported its results for the quarter ended July 2024 more than a month ago.
Ulta reported revenues of $2.55 billion in the last reported quarter, representing a year-over-year change of +0.9%. EPS of $5.30 for the same period compares with $6.02 a year ago.
Ulta is expected to post earnings of $4.52 per share for the current quarter, representing a year-over-year change of -10.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Ulta. Also, the stock has a VGM Score of A.