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DICK’s Sporting Goods Inc. (DKS - Analyst Report) upped its fourth quarter and fiscal 2013 earnings forecast citing higher-than-anticipated comparable store sales results from an otherwise short and promotional holiday season. The company emerged triumphant amid a wary consumer spending trend, given its ability to uphold merchandise margin at par with the year-ago level and leverage SG&A.

Upbeat on this news, the shares of the sporting goods retailer gained momentum rising 1.5% during the trading day.

The company reported an increase of 7% in comparable store sales (comps) for fourth-quarter 2013, adjusted for the 53rd week in fiscal 2012, reflecting significant growth from the company’s guidance of a 3% to 4% increase and a 1.2% increase reported in the fourth quarter of fiscal 2012. On an unadjusted basis, comps for the quarter rose 6%, up from the company’s projection of a 2% to 3% increase.

Full-year comps on an adjusted basis rose 1.9% against the company’s forecast of a flat to 1% increase and the prior-year comps of 4.3%.

The robust comps performance coupled with improved merchandise margins boosted management’s confidence, which led to an upward revision of its fourth quarter and full-year earnings per share guidance. The company raised its fourth quarter adjusted earnings per share forecast to $1.10 – $1.11, compared with $1.04 – $1.07 projected earlier and $1.03 reported in the year-ago quarter.

For the fiscal year, the company anticipates earnings per share of $2.68 – $2.69 versus the previous forecast of $2.62 – $2.65 and the year-ago earnings of $2.53 per share.

Further, management provided a robust initial fiscal 2014 guidance as it believes that the company is well positioned for double-digit earnings growth given its growing omni-channel network and exciting merchandising opportunities.  Taking all factors into consideration, the company projected earnings per share of $3.03 – $3.08 for fiscal 2014 along with estimated shares outstanding of 124 million.

Moreover, this Foot Locker Inc. (FL - Snapshot Report) peer expects to come up with additional details on the 2014 outlook when it releases its fourth quarter and fiscal 2013 results in March.

Over time, DICK’s Sporting has repositioned itself in a challenging macroeconomic backdrop via measures such as a stringent focus on new product introductions, effective cost management and new store openings. We believe expanding direct-to-consumer operations, omni-channel strategies, effective inventory management and optimum capital allocation augur well for DICK’s Sporting to sustain its growth momentum.

Currently, DICK's Sporting carries a Zacks Rank #4 (Sell). Better performing stocks in the retail space include Coastal Contacts Inc. and KAR Auction Services Inc. (KAR - Snapshot Report). While Coastal Contacts sports a Zacks Rank #1 (Strong Buy), KAR Auction holds a Zacks Rank #2 (Buy).

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