Athletic-gear retailer Dick’s Sporting Goods (DKS) gave cautious full-year profit views while beating fourth-quarter forecasts as the retail sector looks ahead to another round of stimulus-fueled consumer spending. DKS stock fell.
The retail chain reported after more people last year took to the outdoors to cure boredom during coronavirus-related lockdowns, pushing sales higher.
Dick’s Sporting Goods Earnings
Estimates: Wall Street expects Dick’s Sporting Goods to earn $2.21 per share, a 67% jump, on revenue up 16% to $3.02 billion. Consensus Metrix forecast same-store sales to climb 17.2%.
Results: EPS of $2.43 on revenue of $3.13 billion with same-store sales up 19.3%. The company incurred approximately $51 million, or 38 cents a share, of pre-tax of compensation and safety costs in response to COVID-19.
Dick’s also raised its quarterly dividend 16%.
Outlook: Full-year EPS of $4.40-$5.20, with the midpoint below consensus for $5.06, on revenue of $9.544 billion-$9.935 billion, above consensus for $9.45 billion but indicating only a 2% increase over 2020 at the midpoint. Dick’s also sees same-store sales down 2% to up 2% for the year vs. a 9% gain in 2020.
DKS stock, which has a strong 93 Composite Rating, popped 6.8% on Monday after President Biden’s $1.9 trillion coronavirus relief plan cleared the Senate over the weekend.
Cowen analysts, in a research note last month, said that DKS stock could be among the big retail-industry gainers from the stimulus. With the pandemic keeping people from exercising in gyms, Dick’s has seen more demand as outdoor activity and at-home fitness become more popular.
CEO Edward Stack said in November, when Dick’s reported third-quarter earnings, that “trends across golf, outdoor activities, home fitness and active lifestyle continued” during the period, which ended on Oct. 31.
After temporary store closures hit same-store sales, that figure rebounded later last year. The chain has also invested in its digital business, which has grown rapidly amid the lockdowns, as well as private brands.
Bank of America analysts, in a research note last month, said that card spending for sporting goods remained elevated through January, with biking seeing particularly strong gains. However, the firm’s analysis also suggested that visits to parks and beaches had slowed into February, due to colder weather.
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