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Why DICK'S Sporting (DKS) is Marching Ahead of The Industry
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Consumers have taken to an active lifestyle, home fitness and outdoor activities owing to increased health consciousness stemming from the surrounding COVID-19 situation. DICK’S Sporting Goods, Inc. (DKS - Free Report) has been quick enough to capitalize on this shifting preference, which in turn resulted in favorable customer demand for its products. Alongside this, a wide range of offerings and a robust online show, driven by advanced omnichannel capabilities, contributed to quarterly results. Notably, the company delivered better-than-expected fourth-quarter fiscal 2020 results, wherein both top and bottom lines improved year over year. Also, strength in hardlines, apparel and footwear stemming from favorable consumer demand bodes well.
Encouragingly, management expects this strong momentum to continue in fiscal 2021. In fact, it expects same store sales and bottom-line growth for the first quarter. Also, fiscal 2021 sales are expected to be $9,544-$9,935 million, the midpoint of which suggests an improvement from $9,584 million reported in the prior year. Same store sales are likely to be down 2% to up 2%.
Further, the company is making significant investments in e-commerce, technology, store payroll, private brands and Team Sports. It has been witnessing a strong online show, thanks to improved omnichannel capabilities including curbside pickup services and BOPIS. Notably, e-commerce soared 57% year over year, accounting for 32% of net sales in fourth-quarter fiscal 2020. Also, mobile sales penetration grew more than 50% with an uptick in mobile app downloads. Moreover, it is offering same-day delivery service via Instacart to more than 150 stores across the United States. Driven by continued strength in e-commerce, DICK’S Sporting extended its long-term association with CommerceHub by entering a multi-year agreement that will enhance its digital supply chain, which in turn will expedite its online orders.
Apart from these, in sync with customers’ shifting preference for comfort wear stemming from the increasing stay-at-home trend, management decided to tap into men’s athletic apparel by its latest launch — VRST. Going ahead, the company plans to roll out the VRST brand to more than 400 DICK'S stores across the United States in the coming weeks.
Speaking of stores, management recently launched a DICK'S Sporting Goods store and four Warehouse locations. For fiscal 2021, management plans to open six DICK'S Sporting Goods stores and specialty concept stores each. It anticipates relocating 11 DICK'S Sporting Goods stores along with converting two Field & Stream stores into Public Lands stores.
Driven by such upsides, shares of this Zacks Rank #3 (Hold) company have surged 42.9% in the past three months, outperforming the industry’s growth of 13.6%.
Bottom Line
Despite coronavirus woes, a solid online show and strong customer demand are likely to help keep its stellar show on. Topping it, a VGM Score of A and a long-term earnings growth rate of 5.6% reflect its inherent strength.
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 (Buy), has an expected long-term earnings growth rate of 10%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Why DICK'S Sporting (DKS) is Marching Ahead of The Industry
Consumers have taken to an active lifestyle, home fitness and outdoor activities owing to increased health consciousness stemming from the surrounding COVID-19 situation. DICK’S Sporting Goods, Inc. (DKS - Free Report) has been quick enough to capitalize on this shifting preference, which in turn resulted in favorable customer demand for its products. Alongside this, a wide range of offerings and a robust online show, driven by advanced omnichannel capabilities, contributed to quarterly results. Notably, the company delivered better-than-expected fourth-quarter fiscal 2020 results, wherein both top and bottom lines improved year over year. Also, strength in hardlines, apparel and footwear stemming from favorable consumer demand bodes well.
Encouragingly, management expects this strong momentum to continue in fiscal 2021. In fact, it expects same store sales and bottom-line growth for the first quarter. Also, fiscal 2021 sales are expected to be $9,544-$9,935 million, the midpoint of which suggests an improvement from $9,584 million reported in the prior year. Same store sales are likely to be down 2% to up 2%.
Further, the company is making significant investments in e-commerce, technology, store payroll, private brands and Team Sports. It has been witnessing a strong online show, thanks to improved omnichannel capabilities including curbside pickup services and BOPIS. Notably, e-commerce soared 57% year over year, accounting for 32% of net sales in fourth-quarter fiscal 2020. Also, mobile sales penetration grew more than 50% with an uptick in mobile app downloads. Moreover, it is offering same-day delivery service via Instacart to more than 150 stores across the United States. Driven by continued strength in e-commerce, DICK’S Sporting extended its long-term association with CommerceHub by entering a multi-year agreement that will enhance its digital supply chain, which in turn will expedite its online orders.
Apart from these, in sync with customers’ shifting preference for comfort wear stemming from the increasing stay-at-home trend, management decided to tap into men’s athletic apparel by its latest launch — VRST. Going ahead, the company plans to roll out the VRST brand to more than 400 DICK'S stores across the United States in the coming weeks.
Speaking of stores, management recently launched a DICK'S Sporting Goods store and four Warehouse locations. For fiscal 2021, management plans to open six DICK'S Sporting Goods stores and specialty concept stores each. It anticipates relocating 11 DICK'S Sporting Goods stores along with converting two Field & Stream stores into Public Lands stores.
Driven by such upsides, shares of this Zacks Rank #3 (Hold) company have surged 42.9% in the past three months, outperforming the industry’s growth of 13.6%.
Bottom Line
Despite coronavirus woes, a solid online show and strong customer demand are likely to help keep its stellar show on. Topping it, a VGM Score of A and a long-term earnings growth rate of 5.6% reflect its inherent strength.
Stocks to Consider in the Retail Space
Abercrombie & Fitch (ANF - Free Report) has a long-term earnings growth rate of 18% 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 (Buy), has an expected long-term earnings growth rate of 10%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>