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 Sporting (DKS) Eyes e-Commerce Growth: Time to Hold?
Read MoreHide Full Article
The full-line sporting goods retailer, DICK’S Sporting Goods, Inc. (DKS - Free Report) is focusing on strengthening its e-Commerce business and offering exclusive merchandise to retain its favorable position amid a challenging industry scenario.
DICK’S Sporting has been gaining from its continued focus on developing every possible avenue to generate higher sales. Apart from strengthening its store network, the company remains on track to expand its e-Commerce business. This is evident from the fact that this business generated about 9.3% of net sales in first-quarter fiscal 2017. Also, the company successfully re-launched its website in the fiscal first-quarter, which helped delivered a solid performance, also contributing largely to the top line.
Further, the company is progressing well with its merchandising strategy, which is all about optimizing inventory in order to make shelves available for popular and private label brands.
Of late, the company has been gaining from opportunities arising from the liquidation of rivals like The Sports Authority (TSA), Sport Chalet and Golfsmith International Holding. The company has been making use of every chance to acquire intellectual property and store leases from these rivals. The company is currently on track to reopen many TSA and Golfsmith stores under the DICK’s Sporting and Golf Galaxy banners, respectively. Notably, DICK’s Sporting’s results have been gaining from these factors, as evident from the first-quarter fiscal 2017 performance.
Additionally, the company expects the liquidation of Gander Mountain to boost its market share going forward.
Benefiting from these factors, the company delivered in-line earnings in first-quarter fiscal 2017, while it increased 8% year over year and came in the higher end of its own guidance range. Also, it has reported positive earnings surprise in four out of the trailing five quarters. The company has long-term earnings growth rate of 12.8% with a VGM Scoreof “A”, which underlines its inherent strength.
However, this Zacks Rank #3 (Hold) stock has underperformed the Retail-Miscellaneous/Diversified industry in the past six months, with its shares down 33.9% compared with the industry’s fall of 8.3%. This could be attributed to the sales miss reported in the most recent quarter.
Further, DICK’s Sporting announced plans to slow down on its store expansion plan due to the challenges looming over the retail space. The company plans to reduce its store openings significantly in the following fiscal years. DICK’S Sporting also faces challenges emerging out of intensive overseas sourcing and seasonality of sales.
While the liquidation of Gander Mountain should boost DICK’S Sporting’s market share, it may hurt third-quarter sales of the company. Given this short-term hurdle and the current trends, management tweaked its fiscal 2017 sales view, while retaining its earnings outlook.
All said investors need to wait and watch if DICK’S Sporting’sstrategic moves aid in improving its performance, amidst the tough consumer landscape.
Big 5 Sporting has an average positive earnings surprise of 94.5% in the trailing four quarters and a long-term earnings growth rate of 12%.
The Children's Place has an average positive earnings surprise of 36.6% in the trailing four quarters and a long-term earnings growth rate of 8%.
Build-A-Bear Workshophas an average positive earnings surprise of 67.5% in the trailing four quarters and a long-term earnings growth rate of 22.5%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
DICK'S Sporting (DKS) Eyes e-Commerce Growth: Time to Hold?
The full-line sporting goods retailer, DICK’S Sporting Goods, Inc. (DKS - Free Report) is focusing on strengthening its e-Commerce business and offering exclusive merchandise to retain its favorable position amid a challenging industry scenario.
DICK’S Sporting has been gaining from its continued focus on developing every possible avenue to generate higher sales. Apart from strengthening its store network, the company remains on track to expand its e-Commerce business. This is evident from the fact that this business generated about 9.3% of net sales in first-quarter fiscal 2017. Also, the company successfully re-launched its website in the fiscal first-quarter, which helped delivered a solid performance, also contributing largely to the top line.
Further, the company is progressing well with its merchandising strategy, which is all about optimizing inventory in order to make shelves available for popular and private label brands.
Of late, the company has been gaining from opportunities arising from the liquidation of rivals like The Sports Authority (TSA), Sport Chalet and Golfsmith International Holding. The company has been making use of every chance to acquire intellectual property and store leases from these rivals. The company is currently on track to reopen many TSA and Golfsmith stores under the DICK’s Sporting and Golf Galaxy banners, respectively. Notably, DICK’s Sporting’s results have been gaining from these factors, as evident from the first-quarter fiscal 2017 performance.
Additionally, the company expects the liquidation of Gander Mountain to boost its market share going forward.
Benefiting from these factors, the company delivered in-line earnings in first-quarter fiscal 2017, while it increased 8% year over year and came in the higher end of its own guidance range. Also, it has reported positive earnings surprise in four out of the trailing five quarters. The company has long-term earnings growth rate of 12.8% with a VGM Score of “A”, which underlines its inherent strength.
However, this Zacks Rank #3 (Hold) stock has underperformed the Retail-Miscellaneous/Diversified industry in the past six months, with its shares down 33.9% compared with the industry’s fall of 8.3%. This could be attributed to the sales miss reported in the most recent quarter.
Further, DICK’s Sporting announced plans to slow down on its store expansion plan due to the challenges looming over the retail space. The company plans to reduce its store openings significantly in the following fiscal years. DICK’S Sporting also faces challenges emerging out of intensive overseas sourcing and seasonality of sales.
While the liquidation of Gander Mountain should boost DICK’S Sporting’s market share, it may hurt third-quarter sales of the company. Given this short-term hurdle and the current trends, management tweaked its fiscal 2017 sales view, while retaining its earnings outlook.
All said investors need to wait and watch if DICK’S Sporting’sstrategic moves aid in improving its performance, amidst the tough consumer landscape.
Key Picks
Better-ranked stocks in the Retail/Wholesale space include Big 5 Sporting Goods Corporation (BGFV - Free Report) , The Children's Place, Inc. (PLCE - Free Report) and Build-A-Bear Workshop, Inc. (BBW - Free Report) each having a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Big 5 Sporting has an average positive earnings surprise of 94.5% in the trailing four quarters and a long-term earnings growth rate of 12%.
The Children's Place has an average positive earnings surprise of 36.6% in the trailing four quarters and a long-term earnings growth rate of 8%.
Build-A-Bear Workshophas an average positive earnings surprise of 67.5% in the trailing four quarters and a long-term earnings growth rate of 22.5%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>