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DICK'S Sporting Rallies on Solid Q2 Results: Time to Buy?
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DICK’S Sporting Goods Inc.’s (DKS - Free Report) shares have been rising since the sporting goods retailer reported higher-than-expected second-quarter fiscal 2020 results. Further, investors are buoyed by the expectations of continued sales momentum in the fiscal third quarter. Apart from this, the company’s shares have gained 43.2% in the past three months, outperforming the industry’s growth of 14.4%.
What’s Driving the Stock?
During the fiscal second quarter, DICK’S Sporting’s top and bottom lines improved year over year. Results gained from solid comps and robust e-commerce performance. Notably, all its stores have resumed operations from June-end, which also aided results to some extent.
Net sales of $2,713.4 million rose 20.1% year over year in the fiscal second quarter, with comps growth of 20.7% driven by higher transactions and rise in average ticket to the tune of 2.8% and 17.9%, respectively. Also, solid performance in all the core categories, including hardlines, apparel and footwear, contributed to comps growth. Going ahead, consumer demand remains positive and has resulted in comps growth of 11% for the first three weeks of the third quarter.
Further, the company remains focused on strengthening the omnichannel experience for athletes by expanding store network and e-commerce presence. Despite coronavirus woes, it has been witnessing solid online show, driven by strong online demand and improved omnichannel capabilities, including curbside pickup services and BOPIS. As a result, e-commerce sales surged 194% year over year, which was nearly 30% of net sales in the reported quarter compared with 12% in the prior-year quarter.
Apart from these, DICK’S Sporting launched two types of concept stores — OVERTIME by DICK'S Sporting Goods and DICK'S Sporting Goods Warehouse — bringing the total number of outlet and clearance stores to 11. This move is in sync with its plans to offer popular athletic brands at discounted prices.
Wrapping Up
Although costs and uncertainties related to the COVID-19 crisis are likely to persist, we hope that a solid top line, driven by strength in core categories, along with a robust e-commerce business will help the company maintain momentum. In fact, a VGM Score of A and a long-term earnings growth rate of 4.1% raise optimism in this Zacks Rank #1 (Strong Buy) stock. Also, it is hovering close to its 52-week high of $57.20.
Best Buy (BBY - Free Report) has a Zacks Rank #2 (Buy) and a long-term earnings growth rate of 8.5%.
The Kroger Co. (KR - Free Report) has an impressive long-term earnings growth rate of 5.5% and a Zacks Rank #2.
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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.
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DICK'S Sporting Rallies on Solid Q2 Results: Time to Buy?
DICK’S Sporting Goods Inc.’s (DKS - Free Report) shares have been rising since the sporting goods retailer reported higher-than-expected second-quarter fiscal 2020 results. Further, investors are buoyed by the expectations of continued sales momentum in the fiscal third quarter. Apart from this, the company’s shares have gained 43.2% in the past three months, outperforming the industry’s growth of 14.4%.
What’s Driving the Stock?
During the fiscal second quarter, DICK’S Sporting’s top and bottom lines improved year over year. Results gained from solid comps and robust e-commerce performance. Notably, all its stores have resumed operations from June-end, which also aided results to some extent.
Net sales of $2,713.4 million rose 20.1% year over year in the fiscal second quarter, with comps growth of 20.7% driven by higher transactions and rise in average ticket to the tune of 2.8% and 17.9%, respectively. Also, solid performance in all the core categories, including hardlines, apparel and footwear, contributed to comps growth. Going ahead, consumer demand remains positive and has resulted in comps growth of 11% for the first three weeks of the third quarter.
Further, the company remains focused on strengthening the omnichannel experience for athletes by expanding store network and e-commerce presence. Despite coronavirus woes, it has been witnessing solid online show, driven by strong online demand and improved omnichannel capabilities, including curbside pickup services and BOPIS. As a result, e-commerce sales surged 194% year over year, which was nearly 30% of net sales in the reported quarter compared with 12% in the prior-year quarter.
Apart from these, DICK’S Sporting launched two types of concept stores — OVERTIME by DICK'S Sporting Goods and DICK'S Sporting Goods Warehouse — bringing the total number of outlet and clearance stores to 11. This move is in sync with its plans to offer popular athletic brands at discounted prices.
Wrapping Up
Although costs and uncertainties related to the COVID-19 crisis are likely to persist, we hope that a solid top line, driven by strength in core categories, along with a robust e-commerce business will help the company maintain momentum. In fact, a VGM Score of A and a long-term earnings growth rate of 4.1% raise optimism in this Zacks Rank #1 (Strong Buy) stock. Also, it is hovering close to its 52-week high of $57.20.
3 More Stocks to Watch in the Retail Space
Hibbett Sports (HIBB - Free Report) has a long-term earnings growth rate of 11.3% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Best Buy (BBY - Free Report) has a Zacks Rank #2 (Buy) and a long-term earnings growth rate of 8.5%.
The Kroger Co. (KR - Free Report) has an impressive long-term earnings growth rate of 5.5% and a Zacks Rank #2.
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>>