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Here's What to Expect from Dick's Sporting Goods (DKS) Q3 Earnings

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Dick's Sporting Goods (DKS - Free Report) saw its stock price pop 0.94% during regular trading Tuesday in a sign that investors might expect big things from the retailer’s Q3 financial results, especially after Foot Locker’s (FL - Free Report) quarterly earnings impressed last week. 

Foot Locker stock soared last week after the sports retailer posted better-than-expected top and bottom-line results. The company’s comparable store sales also jumped 2.9%. Foot Locker benefited from the fact that Nike (NKE - Free Report) , Adidas (ADDYY - Free Report) , and Under Armour (UAA - Free Report) have more selective wholesale businesses these days as they focus on their own direct-to-consumer sales.

DKS Q3 Outlook

Dick’s Q3 revenues are projected to fall 3.6% to hit $1.87 billion, based on our current Zacks Consensus Estimate. At the bottom end of the income statement, the company’s adjusted quarterly earnings are projected to plummet 13.3% from the year-ago period to reach $0.26 per share.

With that said, we still need to know how likely it is that Dick’s will top our quarterly earnings estimate since a beat could help its stock price climb in the near-term. Luckily, we can turn to our exclusive Earnings ESP figure to help us.

 

The Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

Dick’s Sporting Goods recent positive earnings estimate revision activity helps the company earn a Zacks Rank #2 (Buy). The company also sports an Earnings ESP of 7.35%. Therefore, investors can consider DKS a firm that could top our quarterly earnings estimate Wednesday. However, we should remember that the retailer’s overall Q3 outlook doesn’t appear strong.

Dick's Sporting Goods is scheduled to release its Q3 financial results before the market opens on Wednesday.

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