Dick’s Sporting Goods Stock Hits Record High: Unpacking the Impressive Earnings Surge

Dick’s Sporting

Dick’s Sporting Goods has raised its dividend by 10% on Thursday as the company reported the largest sales quarter in its history and predicted another year of growth. Its shares have jumped more than 15% in intraday trading. CEO Lauren Hobart said on a call on the earnings on Thursday that the sales growth of Dick’s has been through bigger tickets — higher prices or more expensive items — as the transactions have been flat. While most of the retailers have recently benefited from a 53rd week in fiscal 2023, the retailer says that the sales records of Dick’s were broken in the fiscal fourth quarter as well regardless of those extra days.
This is how the performance of the athletic apparel retailer compared with the Wall Street Survey by LSEG, which was previously known as Retinitis:

• Earnings per share: $3.85 adjusted vs. $3.35 expected
• Revenue: $3.88 billion vs. $3.80 billion expected

Dick’s Sporting goods reported a net income of $296 million or $3.57 per share in the 3-month period ending Feb. 3, up from $236 million or $2.60 a share a year earlier. The company’s earnings per share excluding one-time items related to the impairment charges and inventory write-offs was $3.85.
Sales: $3.88 billion versus $3.60 billion in the year-ago period
“With our industry-leading assortment and strong execution, we capped off the year with an incredibly strong fourth quarter and holiday season,” Hobart said in a statement. “We are guiding to another strong year in 2024. We plan to grow both our sales and earnings through positive comps, higher merchandise margin and productivity gains,” she added.
Same-store sales for the quarter rose 2.8%, well above the 0.8% rise that analysts had expected, according to Street Account. “Growth in transactions” and market share gains drove the increase, said Executive Chairman Ed Stack.
Referring to LSEG, for fiscal 2024, it is projected that earnings per share to be between $12.85 and $13.25 where as estimated was $12.90 . Also according to LSEG, it is forecasted that revenue would be between $13 billion and $13.13 billion whereas the estimated amount is $13.13 billion . The company expects that same sore sales would increase by 1% to 2%. Subsequent to a good quarter, it raised its quarterly dividend 10% to $1.10 per share.
Dick’s expects earnings to come in roughly in line with or beat Wall Street’s estimates for 2024, but it said it expects some challenges in the current quarter. Speaking to analysts on the conference call, CFO Navdeep Gupta said the company anticipates an “unfavorable” trend in gross margin relative to the prior-year period. That will be due in part to higher rates of shrink. That’s the industry term the actual amount of inventory lost due to factors including theft, both internal and external, or damage. Dick’s cited shrink when it slashed its earnings forecast last year.
On the call Thursday, Hobart said the company is “working with loss prevention, local law enforcement, and moving products to the back of the store that are high shrinks.”
“This will be the first year that we opened ever store, other than about three or four stores that didn’t open,” said Dick’s CEO Lauren Hobart on the company’s third-quarter earnings call with analysts. “It is a little bit of a strange time to be giving more guidance, but we’re trying to paint a picture for you so that you understand that there is a lower end of the guidance because of the conservatism.”