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Things to Know Before DICK'S Sporting's (DKS) Q3 Earnings

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DICK’S Sporting Goods Inc. (DKS - Free Report) is slated to report third-quarter fiscal 2019 results on Nov 26.

Notably, the company’s earnings outpaced the Zacks Consensus Estimate by 4.1% in the preceding quarter. Moreover, the bottom line surpassed the consensus estimate by 13.4%, on average, over the trailing four quarters.

The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 37 cents, which suggests decline of 5.1% from the year-ago quarter’s figure. Notably, the consensus mark has been unchanged in the past 30 days. The Zacks Consensus Estimate for sales is pegged at $1.90 billion, indicating growth of 2.4% from the year-ago quarter’s reported figure.

DICK'S Sporting Goods, Inc. Price and EPS Surprise


DICK'S Sporting Goods, Inc. Price and EPS Surprise

DICK'S Sporting Goods, Inc. price-eps-surprise | DICK'S Sporting Goods, Inc. Quote


Key Factors

DICK’S Sporting has been gaining from omni-channel efforts and merchandising strategy. The company is making significant investments in e-commerce, technology, store payroll, Team Sports HQ and private brands. Moreover, its partnership with Google and Facebook to improve its digital platform is impressive.

In addition, DICK’S Sporting’s efforts to improve in-store experience are growth drivers. These initiatives include space reallocation to regionally growing categories, rollout of HitTrax technology and batting cages in several stores, expansion of strike point presentations, and investment in product development teams. All these initiatives might have boosted the company’s top line in the fiscal third quarter.

Furthermore, DICK’S Sporting is on track to remove the underperforming product categories to drive comparable store sales (comps). In the fiscal second quarter, the company eliminated the hunting category from nearly 125 stores. The category was replaced with a more compelling assortment. Rise in the average ticket and transactions continue to be a positive.

However, decline in merchandise margins, higher occupancy expenses as well as increased shipping and fulfillment costs are concerns. Moreover, increase in SG&A expenses due to continued cost of investments in business and higher freight costs are additional deterrents. Furthermore, elevated costs driven by increased tariffs are putting pressure on the company’s overall profits.

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 chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company has an Earnings ESP of +1.49% and a Zacks Rank #3.

Other Stocks Poised to Beat Earnings Estimates

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.

Dollar General Corporation (DG - Free Report) currently has an Earnings ESP of +2.34% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores, Inc (BURL - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #2 at present.

lululemon athletica (LULU - Free Report) currently has an Earnings ESP of +0.73% and a Zacks Rank #3.

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