DICK'S Sporting (DKS) Strategies Place It for Growth in 2024
DICK'S Sporting Goods, Inc. DKS is well-poised to tap the positive trends in the sporting industry, thanks to its robust strategies including merchandising initiatives and store-related efforts. The company is gaining from brand strength and demand for its products that resonate well with customers. Undoubtedly, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing and efficiently controlling expenses.
Buoyed by such strengths, shares of this sporting goods dealer have increased 27.6% compared with the industry’s 17.4% growth in the three-month time frame. A Value Score of A further adds strength to this current Zacks Rank #3 (Hold) company.
Analysts also seem quite optimistic about the company. The Zacks Consensus Estimate for fiscal 2023 sales and earnings per share (EPS) is currently pegged at $12.8 billion and $12.36, respectively. These estimates show corresponding growth of 3.8% and 2.7% year over year. The consensus mark for next fiscal year’s sales and EPS is $13.1 billion and $12.84, respectively, reflecting a year-over-year increase of 1.7% and 3.8%.
Let’s Delve Deeper
On the storefront, DICK’S Sporting’s earlier launched DICK'S House of Sport, Golf Galaxy Performance Center, Public Lands and Going, Going, Gone! have been performing well. As a result, it launched another five House of Sport locations in the third quarter of fiscal 2023. Earlier, it opened two types of concept stores namely OVERTIME by DICK’S Sporting Goods and DICK’S Sporting Goods Warehouse.
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The company opened seven Golf Galaxy Performance Centers, expanding its Golf Galaxy chain to 104 locations, including 13 performance centers. The total store count was 725, including 104 Golf Galaxy stores, seven Public Lands stores and 17 Going, Going, Gone! Stores, as of Oct 28, 2023.
DKS plans to open other 10 House of Sport locations throughout 2024. By 2027, it expects 75 to 100 House of Sport stores nationwide. The company is anticipated to open seven Golf Galaxy performance centers this year. In 2024, Dick’s Sporting expects to grow its golf Galaxy footprint with 10 new locations.
DICK’S Sporting fiscal third-quarter results benefited from the solid back-to-school season and continued market share gains. This led to a robust top-line performance in the reported quarter. Net sales improved 2.8% year over year. Also, strong comparable store sales (comps) and healthy transaction growth acted as tailwinds. Consolidated comps grew 1.7% year over year, driven by higher transactions and average tickets. For fiscal 2023, the company expects comps growth of 0.5-2%.
DICK’S Sporting boasts a robust history of returning value to shareholders. In the fiscal third quarter, the company repurchased 3.5 million shares of its common stock for $388 million under its share repurchase program. As of Oct 28, 2023, it has $780 million remaining under its authorization. On Nov 20, 2023, the board authorized and declared a quarterly dividend of $1.00 per share on the company's common stock and Class B common stock.
Given all the positives, DICK’S Sporting stock seems to deserve a place in your investment portfolio.
Eye These Solid Picks
We have highlighted three better-ranked stocks, namely Hibbett HIBB, Gap GPS and American Eagle AEO.
Hibbett, the key sporting goods retailer, currently sports a Zacks Rank #1 (Strong Buy). HIBB delivered an earnings surprise of 24.2% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hibbett’s current financial-year sales suggests growth of 1.7% from the year-ago reported figure.
Gap, a fashion retailer of apparel and accessories, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 137.9%, on average.
The Zacks Consensus Estimate for Gap’s current financial-year EPS suggests growth of 387.5%, from the year-ago reported figure.
American Eagle, a leading apparel retailer, currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for American Eagle’s current financial-year sales suggests growth of 4% from the year-ago reported figure. AEO delivered an earnings surprise of 23% in the trailing four quarters.
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American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
The Gap, Inc. (GPS) : Free Stock Analysis Report
DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
Hibbett, Inc. (HIBB) : Free Stock Analysis Report
