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Dick's Sporting (DKS) Q1 Earnings: Stock to Beat Again?
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We expect Dick's Sporting Goods, Inc. (DKS - Free Report) to beat expectations when it reports first-quarter fiscal 2017 results on May 16.
Dick's Sporting outperformed the Zacks Consensus Estimate by an average of 9.8% in the trailing four quarters, with a beat in each quarter. The Zacks Consensus Estimate for both, the first-quarter and fiscal 2017 have been stable in the last 30 days. Further, the current Zacks Consensus Estimate of 54 cents per share for the first quarter reflects a year-over-year increase of 7.4%. Moreover, analysts polled by Zacks expect revenues of $1.8 billion, up nearly 10.6% from the year-ago quarter. So, let’s see how things are shaping up for this announcement.
Our proven model shows that Dick's Sporting may beat earnings because it has the right combination of the two key components.
Zacks ESP: Dick's Sporting currently has an Earnings ESP of +1.85%. This is because the Most Accurate estimate is 55 cents, while the Zacks Consensus Estimate is pegged a notch lower at 54 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Dick's Sporting currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
The combination of Dick's Sporting’s Zacks Rank #3 and a positive ESP make us reasonably confident of a positive earnings beat.
What's Driving the Better-than-Expected Earnings?
Dick's Sporting’s shares have rallied 23.6% over the past one year, outperforming the Zacks categorized Retail – Miscellaneous/Diversified industry’s growth of 5.5%.
Of late, Dick's Sporting has been gaining from the consolidation in the sporting goods space, and opportunities arising from the liquidation of rival firms. Further, the company has been aggressively expanding its store base and e-commerce capabilities to achieve its long-term revenue target of $8.7–$9.0 billion by the end of fiscal 2017. The company is also moving ahead with its omnichannel efforts, focusing on capturing displaced market share via store growth. The latest merchandise strategy of reducing 20% of its vendor base is likely to optimize DICK’S Sporting’s collection. We believe that this plan, along with the company’s digital endeavors and robust online performance, is likely to keep it ahead of consumer trends, thus helping it combat competition.
These factors make us optimistic about Dick's Sporting’s ability to maintain its superb earnings streak. For the upcoming quarter, management had projected adjusted earnings in a range of 50–55 cents per share, with comparable store sales expected to grow in a band of 3–4%.
Other Stocks that Warrant a Look
Here are some other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat:
Wal-Mart Stores, Inc. (WMT - Free Report) , scheduled to release earnings on May 18, currently has an Earnings ESP of +1.04% and a Zacks Rank #3.
Lowe's Companies, Inc. (LOW - Free Report) , slated to release earnings on May 24, currently has an Earnings ESP of +2.83% and a Zacks Rank #3.
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market.See these critical buys and sells free >>
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Dick's Sporting (DKS) Q1 Earnings: Stock to Beat Again?
We expect Dick's Sporting Goods, Inc. (DKS - Free Report) to beat expectations when it reports first-quarter fiscal 2017 results on May 16.
Dick's Sporting outperformed the Zacks Consensus Estimate by an average of 9.8% in the trailing four quarters, with a beat in each quarter. The Zacks Consensus Estimate for both, the first-quarter and fiscal 2017 have been stable in the last 30 days. Further, the current Zacks Consensus Estimate of 54 cents per share for the first quarter reflects a year-over-year increase of 7.4%. Moreover, analysts polled by Zacks expect revenues of $1.8 billion, up nearly 10.6% from the year-ago quarter. So, let’s see how things are shaping up for this announcement.
Dick's Sporting Goods Inc Price and EPS Surprise
Dick's Sporting Goods Inc Price and EPS Surprise | Dick's Sporting Goods Inc Quote
Why a Likely Positive Surprise?
Our proven model shows that Dick's Sporting may beat earnings because it has the right combination of the two key components.
Zacks ESP: Dick's Sporting currently has an Earnings ESP of +1.85%. This is because the Most Accurate estimate is 55 cents, while the Zacks Consensus Estimate is pegged a notch lower at 54 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Dick's Sporting currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
The combination of Dick's Sporting’s Zacks Rank #3 and a positive ESP make us reasonably confident of a positive earnings beat.
What's Driving the Better-than-Expected Earnings?
Dick's Sporting’s shares have rallied 23.6% over the past one year, outperforming the Zacks categorized Retail – Miscellaneous/Diversified industry’s growth of 5.5%.
Of late, Dick's Sporting has been gaining from the consolidation in the sporting goods space, and opportunities arising from the liquidation of rival firms. Further, the company has been aggressively expanding its store base and e-commerce capabilities to achieve its long-term revenue target of $8.7–$9.0 billion by the end of fiscal 2017. The company is also moving ahead with its omnichannel efforts, focusing on capturing displaced market share via store growth. The latest merchandise strategy of reducing 20% of its vendor base is likely to optimize DICK’S Sporting’s collection. We believe that this plan, along with the company’s digital endeavors and robust online performance, is likely to keep it ahead of consumer trends, thus helping it combat competition.
These factors make us optimistic about Dick's Sporting’s ability to maintain its superb earnings streak. For the upcoming quarter, management had projected adjusted earnings in a range of 50–55 cents per share, with comparable store sales expected to grow in a band of 3–4%.
Other Stocks that Warrant a Look
Here are some other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat:
Wal-Mart Stores, Inc. (WMT - Free Report) , scheduled to release earnings on May 18, currently has an Earnings ESP of +1.04% and a Zacks Rank #3.
Lowe's Companies, Inc. (LOW - Free Report) , slated to release earnings on May 24, currently has an Earnings ESP of +2.83% and a Zacks Rank #3.
Best Buy Co., Inc. (BBY - Free Report) , slated to release earnings on May 25, currently has an Earnings ESP of +12.50% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>