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Shares of DICK'S Sporting Goods, Inc. (DKS - Free Report) jumped more than 4%, following the impressive fourth-quarter fiscal 2023 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and improved year over year. Despite the challenging macroeconomic environment, the company has been benefiting from its strategic efforts and continued market share gains. It is on track with business optimization to streamline the overall cost structure.
DKS shares have gained 29.2% in the past three months against the industry’s 5% decline.
Q4 in Detail
Adjusted earnings were $3.85 per share in the fiscal fourth quarter, up 31% from the year-ago figure of $2.93. Also, the metric beat the Zacks Consensus Estimate of earnings of $3.35.
DICK'S Sporting Goods, Inc. Price, Consensus and EPS Surprise
Net sales of $3,876.2 million improved 7.8% year over year and surpassed the Zacks Consensus Estimate of $3,776 million. The upside can be attributable to comparable store sales (comps) and healthy transaction growth.
Consolidated comps grew 2.8% year over year. Also, the figure surpassed our estimate of 1.5% growth. This was driven by higher transactions and average tickets.
Gross profit rose 14.4% year over year to $1,334.2 million and came ahead of our estimate of $1,266.7 million. Meanwhile, the margin expanded 200 basis points (bps) year over year to 34.4% in the fiscal fourth quarter.
In the fiscal fourth quarter, the SG&A expense rate of 24.7% expanded 101 bps year over year. SG&A expenses, in dollar terms, increased 12.4% to $958.6 million and beat our estimate of $889.6 million.
Financial Aspects
DICK’S Sporting ended the fiscal fourth quarter with cash and cash equivalents of $1.8 billion and no outstanding borrowings under the revolving credit facility. Total inventory rose 1% year over year to $2.8 billion as of Feb 3, 2024.
During the 53-week period that ended Feb 3, 2024, the company paid dividends of $351 million. Management hiked the annualized dividend to $4.40 per share, an increase of 10% from the prior dividend. On Mar 13, 2024, the company’s board authorized and declared a quarterly dividend of $1.10 per share on the company's common stock and Class B common stock. The dividend is payable on Apr 12, 2024, to stockholders of record as of Mar 29, 2024.
The company repurchased 5.4 million shares of its common stock for $648.6 million under its share repurchase program during fiscal 2023. As of Feb 3, 2024, it has $780 million remaining under its authorization.
As of Feb 3, 2024, net capital expenditure amounted to $520.4 million. DICK’S Sporting projects capital expenditure of $900 million on a gross basis and $800 million on a net basis for fiscal 2024.
Guidance
Management has issued its fiscal 2024 view. For fiscal 2024, the company expects comps growth of 1-2%, in sync with our estimate of 1.1% growth. It expects net sales of $13-$13.13 billion for the fiscal year.
DKS envisions adjusted earnings of $12.85-$13.25 per share compared with our estimate of $12.71. The adjusted earnings view assumes 83 million shares outstanding as of fiscal 2023. Also, this Zacks Rank #3 (Hold) company’s effective tax rate is expected to be 24%.
Store Update
In the reported quarter, the company opened two DICK'S House of Sport stores. The total store count was 855, including 104 Golf Galaxy stores, seven Public Lands stores and 17 Going Going Gone! Stores and other specialty concept stores, as of Feb 3, 2024.
Gap, a fashion retailer of apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 137.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Gap’s current financial-year earnings per share suggests growth of 387.5% from the year-ago reported figure.
American Eagle, a leading apparel retailer, presently flaunts a Zacks Rank of 1. AEO delivered an earnings surprise of 23% in each of the trailing four quarters.
The Zacks Consensus Estimate for American Eagle’s current financial-year sales suggests growth of 5% from the year-ago reported figure.
Hibbett, a key sporting goods retailer, currently carries a Zacks Rank of 2. HIBB delivered an earnings surprise of 24.2% in each of the trailing four quarters.
The Zacks Consensus Estimate for Hibbett’s current financial-year sales suggests growth of 1.8% from the year-ago reported figure.
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DICK'S Sporting (DKS) Stock Gains on Q4 Earnings & Sales Beat
Shares of DICK'S Sporting Goods, Inc. (DKS - Free Report) jumped more than 4%, following the impressive fourth-quarter fiscal 2023 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and improved year over year. Despite the challenging macroeconomic environment, the company has been benefiting from its strategic efforts and continued market share gains. It is on track with business optimization to streamline the overall cost structure.
DKS shares have gained 29.2% in the past three months against the industry’s 5% decline.
Q4 in Detail
Adjusted earnings were $3.85 per share in the fiscal fourth quarter, up 31% from the year-ago figure of $2.93. Also, the metric beat the Zacks Consensus Estimate of earnings of $3.35.
DICK'S Sporting Goods, Inc. Price, Consensus and EPS Surprise
DICK'S Sporting Goods, Inc. price-consensus-eps-surprise-chart | DICK'S Sporting Goods, Inc. Quote
Net sales of $3,876.2 million improved 7.8% year over year and surpassed the Zacks Consensus Estimate of $3,776 million. The upside can be attributable to comparable store sales (comps) and healthy transaction growth.
Consolidated comps grew 2.8% year over year. Also, the figure surpassed our estimate of 1.5% growth. This was driven by higher transactions and average tickets.
Gross profit rose 14.4% year over year to $1,334.2 million and came ahead of our estimate of $1,266.7 million. Meanwhile, the margin expanded 200 basis points (bps) year over year to 34.4% in the fiscal fourth quarter.
In the fiscal fourth quarter, the SG&A expense rate of 24.7% expanded 101 bps year over year. SG&A expenses, in dollar terms, increased 12.4% to $958.6 million and beat our estimate of $889.6 million.
Financial Aspects
DICK’S Sporting ended the fiscal fourth quarter with cash and cash equivalents of $1.8 billion and no outstanding borrowings under the revolving credit facility. Total inventory rose 1% year over year to $2.8 billion as of Feb 3, 2024.
During the 53-week period that ended Feb 3, 2024, the company paid dividends of $351 million. Management hiked the annualized dividend to $4.40 per share, an increase of 10% from the prior dividend. On Mar 13, 2024, the company’s board authorized and declared a quarterly dividend of $1.10 per share on the company's common stock and Class B common stock. The dividend is payable on Apr 12, 2024, to stockholders of record as of Mar 29, 2024.
The company repurchased 5.4 million shares of its common stock for $648.6 million under its share repurchase program during fiscal 2023. As of Feb 3, 2024, it has $780 million remaining under its authorization.
As of Feb 3, 2024, net capital expenditure amounted to $520.4 million. DICK’S Sporting projects capital expenditure of $900 million on a gross basis and $800 million on a net basis for fiscal 2024.
Guidance
Management has issued its fiscal 2024 view. For fiscal 2024, the company expects comps growth of 1-2%, in sync with our estimate of 1.1% growth. It expects net sales of $13-$13.13 billion for the fiscal year.
DKS envisions adjusted earnings of $12.85-$13.25 per share compared with our estimate of $12.71. The adjusted earnings view assumes 83 million shares outstanding as of fiscal 2023. Also, this Zacks Rank #3 (Hold) company’s effective tax rate is expected to be 24%.
Store Update
In the reported quarter, the company opened two DICK'S House of Sport stores. The total store count was 855, including 104 Golf Galaxy stores, seven Public Lands stores and 17 Going Going Gone! Stores and other specialty concept stores, as of Feb 3, 2024.
Key Picks
We have highlighted three better-ranked stocks, namely Gap (GPS - Free Report) , American Eagle (AEO - Free Report) and Hibbett (HIBB - Free Report) .
Gap, a fashion retailer of apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 137.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Gap’s current financial-year earnings per share suggests growth of 387.5% from the year-ago reported figure.
American Eagle, a leading apparel retailer, presently flaunts a Zacks Rank of 1. AEO delivered an earnings surprise of 23% in each of the trailing four quarters.
The Zacks Consensus Estimate for American Eagle’s current financial-year sales suggests growth of 5% from the year-ago reported figure.
Hibbett, a key sporting goods retailer, currently carries a Zacks Rank of 2. HIBB delivered an earnings surprise of 24.2% in each of the trailing four quarters.
The Zacks Consensus Estimate for Hibbett’s current financial-year sales suggests growth of 1.8% from the year-ago reported figure.