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DICK'S Sporting (DKS) Q4 Earnings: What Awaits the Stock?

Zacks Equity Research

DICK'S Sporting Goods, Inc. DKS is set to report fourth-quarter fiscal 2016 results before the market opens on Mar 7. The question lingering in investors’ minds now is, whether this full-line sporting goods retailer will be able to maintain its positive earnings streak in the to-be-reported quarter. DICK'S Sporting has outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 8.8%. Let’s see how things are shaping up prior to this announcement.

What to Expect?

A glimpse at DICK'S Sporting’s earnings estimates reveals that the Zacks Consensus Estimate for both the fourth quarter and fiscal 2016 has declined by a penny in the last seven days. However, the current Zacks Consensus Estimate of $1.30 and $3.09 for the fourth quarter and fiscal 2016 reflects growth of 15.3% and 7.8%, from the year-ago quarter and fiscal 2015, respectively. Further, analysts polled by Zacks expect revenues of $2.47 billion in the fiscal fourth quarter, up 10.4% from the year-ago quarter.

DICK'S Sporting forms part of the Retail-Wholesale sector. As per the latest Earnings Preview, total earnings for the sector are expected to decline marginally by 1.2%, whereas revenues are projected to improve 4.7%. In addition, we observed that the Retail-Wholesale sector has lagged the S&P 500 index in the past six months. While the Zacks categorized sector rose 2.5%, the S&P 500 index gained 8.1%, over the said time frame.

What Does the Zacks Model Unveil?

Our proven model does not conclusively show that DICK'S Sporting is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Dick's Sporting Goods Inc Price, Consensus and EPS Surprise


Dick's Sporting Goods Inc Price, Consensus and EPS Surprise | Dick's Sporting Goods Inc Quote

DICK'S Sporting has an Earnings ESP of -0.77% as the Most Accurate estimate of $1.29 stands below the Zacks Consensus Estimate of $1.30. However, the company has a Zacks Rank #3, which increases the predictive power of ESP. But we need to have a positive ESP in order to be confident about earnings surprise.

Factors Influencing the Quarter

DICK'S Sporting has significantly outperformed the Zacks categorized Retail–Miscellaneous/Diversified industry in the past one year. While the stock rose nearly 13%, the industry gained 4.1% in the said time period.


DICK'S Sporting has been benefiting from the expansion of its store base and powerful merchandising strategies, along with the improvement of its eCommerce capabilities. Apart from strengthening its store network, DICK’S Sporting is also focused on enhancing its omni-channel network in a bid to generate higher sales. These measures are likely to effectively promote the company’s products, thereby boosting its financial performance.

Further, the company is gaining from bankruptcy declared by major rivals like the Sports Authority, which is also expected to benefit its ongoing performance.

Throwing light upon its quarterly performance, the company scored a hat trick with earnings beat in third-quarter fiscal 2016. Results were driven by robust comparable store sales (comps), gross margin expansion and tough inventory management. Consequently, management raised its fiscal 2016 view and adjusted earnings per share is expected in the band of $2.99−$3.11, up from $2.90–$3.05 projected earlier. In the fiscal fourth quarter, adjusted earnings per share are envisioned in the range of $1.19−$1.31.

However, DICK'S Sporting remains prone to macroeconomic hurdles and stiff competition from other sporting goods retailers, which weigh upon the company’s performance. Furthermore, an adverse movement in foreign currency exchange rates might dent the company’s operational performance.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Fred's, Inc. FRED has an Earnings ESP of +15.79% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Staples, Inc. SPLS has an Earnings ESP of +4.00% and a Zacks Rank #3.

Costco Wholesale Corporation COST has an Earnings ESP of +0.74% and a Zacks Rank #3.

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