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Bull of the Day: Dick's Sporting Goods (DKS)

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Dick’s Sporting Goods Inc. (DKS - Free Report) is a popular, well-known retailer where customers can find a wide range of sporting goods products: athletic shoes; fitness apparel and accessories; and a broad selection of outdoor and athletic equipment for team sports, camping, fishing, tennis, golf, and water sports.

Q3 Earnings Recap

Back in November, DKS reported better-than-expected third quarter results, impressing Wall Street across the board.

Adjusted EPS hit $2.01 per share on revenue of $2.41 billion, both figures easily beating the Zacks Consensus Estimate.

Overall, Dick’s saw strength online and in its brick-and-mortar stores. Same-store sales increased 23.2% year-over-year, a record for the retailer and an improvement over the already strong 20.7% in the second quarter.

CEO Edward Stack explained on the company’s earnings call that “Our stores were the key to this unprecedented growth, and serve as the hub of our industry-leading omnichannel experience. Brick-and-mortar stores comps grew [by] double digits, and our stores fulfilled 70% of our online sales, which increased nearly 100% for the quarter."

Digital sales soared 95% as well, and online revenue made up 21% of Dick’s total business in the third quarter compared to 13% last year. Mobile is also expanding, and the retailer saw mobile sales penetration above 50%.

DKS is Surging


Since March 23, shares of Dick’s have climbed over 230%. Estimates have been rising too, and DKS is a Zacks Rank #1 (Strong Buy) right now.

For the current fiscal year, 11 analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $3.97 per share to $5.83 per share. Earnings are expected see double-digit growth for the current fiscal year, up 58%.

Like fellow sports and outdoor recreational retailers, DKS has seen a sales boom during the pandemic as people stuck at home looked to spend more and more time outside. The company benefitted from social distancing as well, as outdoor activities allowed people to safely spend time with their loved ones.

Looking ahead, Dick’s Sporting Goods has plans to invest in technology that will make its shopping experience even better for customers, and the record revenue generated this year shows investors and Wall Street analysts that it has the ability to sustain business growth during periods of economic uncertainty.

If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep DKS on your shortlist.

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