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DICK'S Sporting (DKS) Q4 Earnings & Sales Beat on High Demand
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DICK'S Sporting Goods, Inc. (DKS - Free Report) reported better-than-expected fourth-quarter fiscal 2020 results. Further, both top and bottom lines improved year over year. Results gained from favorable customer demand, a solid product portfolio and advanced omnichannel capabilities. Going forward, the company noted that this strong momentum continued in fiscal 2021.
However, shares of the company fell more than 6% during the close of the trading session on Mar 9. We note that shares of this Zacks Rank #2 (Buy) company have gained 34.1% in the past three months, outperforming the industry’s 12.3% growth.
Q4 in Detail
In the fiscal fourth quarter, adjusted earnings skyrocketed 84.1% to $2.43 per share. The figure also surpassed the Zacks Consensus Estimate of $2.21 per share.
Net sales of $3,125 million rose 19.8% year over year and exceeded the Zacks Consensus Estimate of $3,020 million. This uptick can be attributable to improved store sales and a robust online show. Notably, consolidated same-store sales (comps) grew 19.3%, driven by strength in hardlines, apparel and footwear stemming from favorable consumer demand.
E-commerce sales surged 57% year over year, representing nearly 32% of net sales in the reported quarter compared with 25% in the prior-year quarter. The upside can be attributed to increased consumer adoption of in-store pickup and curbside facilities.
Gross margin expanded roughly 560 basis points (bps) to 33.7% in the quarter under review. Meanwhile, SG&A expenses, as a percentage of sales, expanded 6 bps year over year to 24.4%. This is inclusive of $47 million of extra compensation and safety expenses associated with COVID-19.
DICKS Sporting Goods, Inc. Price, Consensus and EPS Surprise
DICK'S Sporting ended fiscal 2020 with cash and cash equivalents of $1,658.1 million, no borrowings under its $1.9-billion revolving credit facility and total stockholders' equity of $2,339.5 million. Further, total inventory declined 11.3% year over year as of Jan 30, 2021.
In fiscal 2020, total capital expenditure amounted to $224 million. The metric is projected to be $345-$370 million.
Also, the company has approved a quarterly dividend of 36.25 cents per share on common stock and class B common stock, which reflects a hike of 16% from the earlier one. This dividend is likely to be paid out on Mar 26 as of shareholders’ record on Mar 19.
FY21 Guidance
Driven by solid growth across golf, athletic apparel, footwear, team sports and fitness categories along with continued momentum in athletic apparel and footwear businesses, management issued the fiscal 2021 view. Fiscal 2021 sales are expected to be $9,544-$9,935 million with same store sales likely to be down 2% to up 2%. Moreover, adjusted earnings are envisioned to be $4.4-$5.2 per share. Further, it projects share repurchase of at least $200 million. Gross margin and SG&A expenses are forecasted to decline year over year in fiscal 2021. Also, it noted that this guidance includes COVID-related costs to the tune of $30 million for the first half of fiscal 2021. For the first quarter of fiscal 2021, management expects same store sales and bottom-line growth.
Apart from these, the company plans to open six new DICK'S Sporting Goods stores and specialty concept stores each this year. Also, it anticipates relocating 11 DICK'S Sporting Goods stores along with converting two Field & Stream stores into Public Lands stores. Further, it is making efforts to strengthen its footwear business by converting more than 100 stores to full-service footwear stores.
Hibbett Sports (HIBB - Free Report) currently has a long-term expected earnings growth rate of 17.2% and a Zacks Rank #1.
Tapestry (TPR - Free Report) , with a Zacks Rank #2, has an expected long-term earnings growth rate of 10%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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DICK'S Sporting (DKS) Q4 Earnings & Sales Beat on High Demand
DICK'S Sporting Goods, Inc. (DKS - Free Report) reported better-than-expected fourth-quarter fiscal 2020 results. Further, both top and bottom lines improved year over year. Results gained from favorable customer demand, a solid product portfolio and advanced omnichannel capabilities. Going forward, the company noted that this strong momentum continued in fiscal 2021.
However, shares of the company fell more than 6% during the close of the trading session on Mar 9. We note that shares of this Zacks Rank #2 (Buy) company have gained 34.1% in the past three months, outperforming the industry’s 12.3% growth.
Q4 in Detail
In the fiscal fourth quarter, adjusted earnings skyrocketed 84.1% to $2.43 per share. The figure also surpassed the Zacks Consensus Estimate of $2.21 per share.
Net sales of $3,125 million rose 19.8% year over year and exceeded the Zacks Consensus Estimate of $3,020 million. This uptick can be attributable to improved store sales and a robust online show. Notably, consolidated same-store sales (comps) grew 19.3%, driven by strength in hardlines, apparel and footwear stemming from favorable consumer demand.
E-commerce sales surged 57% year over year, representing nearly 32% of net sales in the reported quarter compared with 25% in the prior-year quarter. The upside can be attributed to increased consumer adoption of in-store pickup and curbside facilities.
Gross margin expanded roughly 560 basis points (bps) to 33.7% in the quarter under review. Meanwhile, SG&A expenses, as a percentage of sales, expanded 6 bps year over year to 24.4%. This is inclusive of $47 million of extra compensation and safety expenses associated with COVID-19.
DICKS Sporting Goods, Inc. Price, Consensus and EPS Surprise
DICKS Sporting Goods, Inc. price-consensus-eps-surprise-chart | DICKS Sporting Goods, Inc. Quote
Financial Aspects
DICK'S Sporting ended fiscal 2020 with cash and cash equivalents of $1,658.1 million, no borrowings under its $1.9-billion revolving credit facility and total stockholders' equity of $2,339.5 million. Further, total inventory declined 11.3% year over year as of Jan 30, 2021.
In fiscal 2020, total capital expenditure amounted to $224 million. The metric is projected to be $345-$370 million.
Also, the company has approved a quarterly dividend of 36.25 cents per share on common stock and class B common stock, which reflects a hike of 16% from the earlier one. This dividend is likely to be paid out on Mar 26 as of shareholders’ record on Mar 19.
FY21 Guidance
Driven by solid growth across golf, athletic apparel, footwear, team sports and fitness categories along with continued momentum in athletic apparel and footwear businesses, management issued the fiscal 2021 view. Fiscal 2021 sales are expected to be $9,544-$9,935 million with same store sales likely to be down 2% to up 2%. Moreover, adjusted earnings are envisioned to be $4.4-$5.2 per share. Further, it projects share repurchase of at least $200 million. Gross margin and SG&A expenses are forecasted to decline year over year in fiscal 2021. Also, it noted that this guidance includes COVID-related costs to the tune of $30 million for the first half of fiscal 2021. For the first quarter of fiscal 2021, management expects same store sales and bottom-line growth.
Apart from these, the company plans to open six new DICK'S Sporting Goods stores and specialty concept stores each this year. Also, it anticipates relocating 11 DICK'S Sporting Goods stores along with converting two Field & Stream stores into Public Lands stores. Further, it is making efforts to strengthen its footwear business by converting more than 100 stores to full-service footwear stores.
Other Stocks in the Retail Space
Abercrombie & Fitch (ANF - Free Report) has a long-term earnings growth rate of 17.2% and currently, a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hibbett Sports (HIBB - Free Report) currently has a long-term expected earnings growth rate of 17.2% and a Zacks Rank #1.
Tapestry (TPR - Free Report) , with a Zacks Rank #2, has an expected long-term earnings growth rate of 10%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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