https://www.barrons.com/articles/dicks-sporting-goods-sale-revenue-outlook-stock-b46ac307
Dick’s Sporting Items‘ on Tuesday reported a better-than-expected revenue outlook for the 12 months and elevated its annual dividend because it tightens stock, expands shops, and retains margins excessive.
The sports activities retailer (ticker: DKS) mentioned it expects 2023 fiscal 12 months earnings to be between $12.90 and $13.80. That’s larger than the $12 consensus amongst analysts tracked by FactSet .
CEO Lauren Hobart mentioned the corporate will develop its gross sales and earnings in 2023 partly via rising its sq. footage and better merchandise margin. Dick’s sells sports activities tools, attire, footwear, and equipment.
The corporate reported same-store gross sales progress of 5.3% within the fourth quarter, greater than double the estimates of two.1%, in accordance with FactSet. Identical-store gross sales consult with income from shops opened for 14 full months.
The inventory moved up almost 8% to $141.94 after markets opened on Tuesday. It’s up 10% this 12 months, as of Monday’s shut.
Dick’s has been beating earnings estimates over the previous 12 months regardless of different retailers struggling in an inflationary atmosphere. A part of it has to do with the corporate’s positioning: Dick’s has routinely emphasised it’s a “necessity-based” retailer. A few of its classes, such lively life-style and workforce sports activities, feed habits that individuals have adopted, and which proceed to stay resilient regardless of exhausting financial occasions, Chief Monetary Officer Navdeep Gupta mentioned late final 12 months.
Plus, the corporate serves totally different demographics—kids’s soccer cleats vary in worth from about $24.99 to $279.99.
“Shoppers are going via loads of challenges with grocery costs and gasoline costs,” mentioned Hobart in September final 12 months when recession alarm bells had been ringing loudly. However “everyone [is] simply making the alternatives which are proper for them.”
The strikes by Dick’s allowed the retailer to greater than double its annual dividend on Tuesday to $4 per share, from $1.95 per share in 2022. The corporate “now has among the many highest yield in our Retailing/Broadlines & Hardlines house,” Michael Baker, an analyst at D.A. Davidson wrote Tuesday. He has a Purchase score on the inventory
Advance Auto Elements (AAP) and Finest Purchase (BBY) are the one two shares in Baker’s sector protection that beat Dick’s 3% dividend yield. The common yield among the many group is 2.3%.
To make certain, the corporate’s stock ranges had been elevated final 12 months because it struggled with supply-chain disruptions like different retailers. On the finish of the second quarter stock was 49% larger than the identical interval the earlier 12 months, by the tip of the third quarter it was 35% larger, however by the tip of the fourth quarter (which led to January) it was right down to 23% larger.
The corporate additionally reported $2.93 in adjusted earnings per share for the fourth fiscal quarter, larger than expectations for $2.88 amongst analysts. Gross sales had been $3.6 billion, barely beating estimates of $3.45 billion.
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