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DICK'S Sporting (DKS) Stock Down Despite Q3 Earnings Beat

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DICK'S Sporting Goods, Inc. (DKS - Free Report) , the sporting goods retailer, came out with third-quarter fiscal 2016 results, wherein earnings of 48 cents per share jumped 6.7% year over year, also cruising ahead of the Zacks Consensus Estimate of 42 cents. Results were mainly driven by robust comparable store sales (comps), coupled with gross margin expansion.   

Earnings Estimate Revision: The Zacks Consensus Estimate for fiscal 2016 has shown a slight uptrend over the last 30 days. Further, in the trailing four quarters (including the quarter under review), the company has outperformed the Zacks Consensus Estimate by an average of 8.8%.

DICKS SPRTG GDS Price and EPS Surprise


Revenues: Dick's Sporting generated total sales of nearly $1,810.3 million that jumped 10.2% year over year, and came substantially ahead of the Zacks Consensus Estimate of $1,772 million. Further, consolidated comps for the quarter rose 5.2%.

Key Events: Dick's Sporting repurchased roughly 0.2 million shares worth $9 million during the quarter, following which it had shares worth roughly $1.1 billion remaining under its standing authorization that extends through 2021. Further, on Nov 10, 2016, management declared a quarterly cash dividend of 15.125 cents per share, payable on Dec 30, 2016 to shareholders of record as on Dec 9.

Additionally, on Nov 2, the company concluded the buyout of certain assets of Golfsmith International Holdings, Inc. for nearly $43 million. The buyout, which includes intellectual property and rights to buy store leases, along with inventory for 30 stores, is expected to boost DICK’s Sporting’s bottom-line in fiscal 2017.

Also, on Jul 20, the company bought intellectual property assets of The Sports Authority's, along with the right to buy 31 store leases – out of which DICK’s Sporting plans to retain 22 leases in order to convert them into its own stores.

Outlook: Following the solid results, the company raised its fiscal 2016 outlook. For fiscal 2016, the company now expects adjusted earnings to range from $2.99 - $3.11 per share, up from $2.90 – $3.05 per share predicted earlier. Further, consolidated comps growth is now anticipated in a range of 3% - 4%, compared with 2% - 3% forecasted earlier.

For the fourth-quarter of fiscal 2016, the company envisions earnings per share to lie in the band of $1.19- $1.31, while it anticipates comps growth to range from 3% to 6%.

Zacks Rank: Currently, Dick's Sporting carries a Zacks Rank #2 (Buy) which is subject to change following the earnings announcement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stock Movement: Dick's Sporting shares fell about 2.6% during pre-market trading hours, following the third-quarter results.

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