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Why DICK'S Sporting (DKS) is Poised to Beat Earnings in Q4

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DICK’S Sporting Goods Inc. (DKS - Free Report) is slated to report fourth-quarter fiscal 2020 results on Mar 9. The leading sporting goods retailer is likely to register top and bottom-line growth when it reports fourth-quarter 2020 results.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $2.21 per share, indicating growth of 67.4% from the prior-year quarter. The estimate has risen 0.9% over the past 30 days. The consensus mark for revenues is pegged at $3.02 billion, calling for growth of 15.8% from the year-ago quarter.

In the last reported quarter, the company beat the Zacks Consensus Estimate by 113.8%. Moreover, it delivered an earnings surprise of 34.7%, on average, in the trailing four quarters.

Key Factors to Note

DICK’S Sporting is expected to have witnessed positive sales trends in the fiscal fourth quarter owing to favorable customer demand, a solid product portfolio and strength in the online platform. Healthy demand and improved omni-channel capabilities, including curbside pickup services and BOPIS, are likely to have aided the online performance. Also, the newly launched omni-channel services like mobile checkout and return stations, a Shop/Click/Pay app at a few locations and store management initiatives are likely to have contributed to the top line in the to-be-reported quarter.

DICKS Sporting Goods, Inc. Price and EPS Surprise

 

DICKS Sporting Goods, Inc. Price and EPS Surprise

DICKS Sporting Goods, Inc. price-eps-surprise | DICKS Sporting Goods, Inc. Quote

Additionally, benefits from its recent collaboration with Instacart to offer same-day delivery service to more than 150 stores across the United States are expected to have boosted online sales. Moreover, strength in hardlines, apparel and footwear is expected to have been aiding comparable sales (comps) growth.

In the last reported quarter’s earnings call, the company noted that the strong comps momentum continued in the fiscal fourth quarter. Consolidated comps grew in the high teens in the first three weeks of the fourth quarter.

However, the company predicted adverse impact from weather to partly hurt results in the fiscal fourth quarter. Also, the company continues to witness COVID-related cost pressure, which has been weighing on the bottom line. In third-quarter fiscal 2020, the company incurred $48 million of extra compensation and safety expenses associated with the COVID-19 crisis. Also, the bottom line included $124 million of COVID-related compensation and safety costs. Persistence of these costs are expected to have partly offset earnings growth in the fiscal fourth quarter.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for DICK’S Sporting this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

DICK’S Sporting carries a Zacks Rank #3 and an Earnings ESP of +3.70%.

Other Stocks With Favorable Combinations

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat.

The Children’s Place, Inc. (PLCE - Free Report) currently has an Earnings ESP of +76.12% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zumiez Inc. (ZUMZ - Free Report) presently has an Earnings ESP of +0.37% and a Zacks Rank #3.

Dollar General Corporation (DG - Free Report) currently has an Earnings ESP of +1.23% and a Zacks Rank #3.

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