We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dick's (DKS) Down 5.7% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Dick's Sporting Goods (DKS - Free Report) . Shares have lost about 5.7% 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 Beats on Q3 Earnings & Sales, Ups View
DICK'S Sporting Goods has posted better-than-expected top and bottom lines for third-quarter fiscal 2022. The company has been benefiting from a compelling assortment and its structural transformation in recent years.
Adjusted earnings were $2.60 per share in the fiscal third quarter, down 18% from the prior-year figure of $3.19. The decline can be attributed to a dismal gross margin and higher operating expenses in the reported quarter. However, adjusted earnings beat the Zacks Consensus Estimate of $2.24 per share.
Net sales of $2,959 million improved 7.7% year over year and surpassed the Zacks Consensus Estimate of $2,701 million. Also, net sales advanced 50.8% from third-quarter fiscal 2019, driven by strength in its core strategies.
Consolidated comparable store sales (comps) grew 6.5%, down from comps growth of 12.8% in the year-ago quarter. Also, DKS witnessed comps growth of 23.2% and 6% on a 2-year stack basis and a 3-year basis, respectively, in the fiscal third quarter.
The gross margin contracted 423 basis points year over year to 34.2% in the fiscal third quarter due to high promotional activity.
In the fiscal third quarter, the SG&A expense rate of 23% remained almost flat year over year. SG&A expenses, in dollar terms, increased 7.6% to $679.7 million, driven by continued investment in hourly wage rates and talent to support its growth strategies.
Financial Aspects
DICK’S Sporting ended the fiscal third quarter with cash and cash equivalents of $1,437.8 million, and no borrowings under the $1.6-billion revolving credit. Total inventory improved 35% year over year to $3,361.1 million as of Jul 30, 2022.
The company paid out dividends of $124 million and repurchased 4.4 million shares for $361 million. On Nov 21, DICK’s Sporting declared a quarterly dividend of 48.75 cents per share on common stock and Class B common stock, payable Dec 30, to its shareholders of record as of Dec 9.
In the nine months ending Oct 29, 2022, net capital expenditure amounted to $274.3 million. DICK’S Sporting projects capital expenditure of $400-$425 million on a gross basis and $340-$365 million on a net basis for fiscal 2022.
Guidance
Driven by the impressive quarterly results, the company raised its fiscal 2022 view. For fiscal 2022, the company expects comps to be negative 1.5-3%, which compares favorably with the earlier mentioned range between negative 6% and negative 2%. The company envisions adjusted earnings of $11.50-$12.10 per share versus the prior mentioned $10.00-$12.00. The adjusted earnings view assumes 88 million shares outstanding as of fiscal 2022.
DICK’s Sporting anticipates GAAP earnings per share of $10.5-$11.1 for fiscal 2022 compared with the $8.85-$10.55 mentioned earlier. The revised view assumes shares outstanding of 99 million as of fiscal 2022. The company’s GAAP earnings view does not include share repurchases beyond that worth $360 million repurchased in the first nine months ending Oct 29, 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Dick's has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. 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, Sally Beauty (SBH - Free Report) , a stock from the same industry, has gained 5.2%. The company reported its results for the quarter ended September 2022 more than a month ago.
Sally Beauty reported revenues of $962.46 million in the last reported quarter, representing a year-over-year change of -2.8%. EPS of $0.50 for the same period compares with $0.64 a year ago.
Sally Beauty is expected to post earnings of $0.48 per share for the current quarter, representing a year-over-year change of -23.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
Sally Beauty has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Dick's (DKS) Down 5.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Dick's Sporting Goods (DKS - Free Report) . Shares have lost about 5.7% 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 Beats on Q3 Earnings & Sales, Ups View
DICK'S Sporting Goods has posted better-than-expected top and bottom lines for third-quarter fiscal 2022. The company has been benefiting from a compelling assortment and its structural transformation in recent years.
Adjusted earnings were $2.60 per share in the fiscal third quarter, down 18% from the prior-year figure of $3.19. The decline can be attributed to a dismal gross margin and higher operating expenses in the reported quarter. However, adjusted earnings beat the Zacks Consensus Estimate of $2.24 per share.
Net sales of $2,959 million improved 7.7% year over year and surpassed the Zacks Consensus Estimate of $2,701 million. Also, net sales advanced 50.8% from third-quarter fiscal 2019, driven by strength in its core strategies.
Consolidated comparable store sales (comps) grew 6.5%, down from comps growth of 12.8% in the year-ago quarter. Also, DKS witnessed comps growth of 23.2% and 6% on a 2-year stack basis and a 3-year basis, respectively, in the fiscal third quarter.
The gross margin contracted 423 basis points year over year to 34.2% in the fiscal third quarter due to high promotional activity.
In the fiscal third quarter, the SG&A expense rate of 23% remained almost flat year over year. SG&A expenses, in dollar terms, increased 7.6% to $679.7 million, driven by continued investment in hourly wage rates and talent to support its growth strategies.
Financial Aspects
DICK’S Sporting ended the fiscal third quarter with cash and cash equivalents of $1,437.8 million, and no borrowings under the $1.6-billion revolving credit. Total inventory improved 35% year over year to $3,361.1 million as of Jul 30, 2022.
The company paid out dividends of $124 million and repurchased 4.4 million shares for $361 million. On Nov 21, DICK’s Sporting declared a quarterly dividend of 48.75 cents per share on common stock and Class B common stock, payable Dec 30, to its shareholders of record as of Dec 9.
In the nine months ending Oct 29, 2022, net capital expenditure amounted to $274.3 million. DICK’S Sporting projects capital expenditure of $400-$425 million on a gross basis and $340-$365 million on a net basis for fiscal 2022.
Guidance
Driven by the impressive quarterly results, the company raised its fiscal 2022 view. For fiscal 2022, the company expects comps to be negative 1.5-3%, which compares favorably with the earlier mentioned range between negative 6% and negative 2%. The company envisions adjusted earnings of $11.50-$12.10 per share versus the prior mentioned $10.00-$12.00. The adjusted earnings view assumes 88 million shares outstanding as of fiscal 2022.
DICK’s Sporting anticipates GAAP earnings per share of $10.5-$11.1 for fiscal 2022 compared with the $8.85-$10.55 mentioned earlier. The revised view assumes shares outstanding of 99 million as of fiscal 2022. The company’s GAAP earnings view does not include share repurchases beyond that worth $360 million repurchased in the first nine months ending Oct 29, 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Dick's has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. 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, Sally Beauty (SBH - Free Report) , a stock from the same industry, has gained 5.2%. The company reported its results for the quarter ended September 2022 more than a month ago.
Sally Beauty reported revenues of $962.46 million in the last reported quarter, representing a year-over-year change of -2.8%. EPS of $0.50 for the same period compares with $0.64 a year ago.
Sally Beauty is expected to post earnings of $0.48 per share for the current quarter, representing a year-over-year change of -23.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.
Sally Beauty has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.