Is It Time To Buy This Sporting Goods Retailer?
Estimize | Aug 16, 2016 06:29AM ET
Dick’s Sporting Goods Inc (NYSE:DKS) Consumer Discretionary - Specialty Retail | Reports August 16, Before Market Opens
Key Takeaways
- The Estimize consensus is calling for earnings per share of 69 cents on $1.89 billion in revenue, 1 cent higher than Wall Street on the bottom line and right in line on the top
- The ongoing bounce back in the retail sector, Sports Authority bankruptcy, and strong quarter from competitor Big 5 Sporting Goods, could be a strong indicator of a surprise.
- Direct to consumer models from big sports brands like Nike (NYSE:NKE) and Under Armour Inc (NYSE:UA) have consumers bypassing large sporting goods stores including Dick’s
Dick’s Sport Goods is prepared to release its second quarter results Tuesday after the market closes. The sporting goods retailer has trended down the past couple of quarters, dragged down by slowing sales and negative bottom line growth. Based on analyst’s estimates, Dicks appears to be headed for another weak quarter. However, the ongoing bounce back in the retail sector, Sports Authority bankruptcy, and strong quarter from competitor Big 5 Sporting Goods, could be a strong indicator of a surprise.
The Estimize consensus is looking for earnings per share of 69 cents, down 10% from the same period last year. That estimate has dropped 11% since DKS most recent report in May. Revenue is anticipated to grow by 4% to $1.89 billion, a marked slowdown from past quarters. Fortunately, weak earnings haven’t held back the stock which just recently reached its 52 week high. The stock is up 7% in the past 12 months, but typically don’t move following a quarterly report.
Dick’s has been hit hardest from the continual transition towards athleisure trends and ecommerce. Many of the retailer’s initiatives have been to solve these ongoing troubles, including expanding its ecommerce network and putting forward new marketing and merchandising efforts. Dick’s is also planning to open 100s of new stores in order to return to profitability and sales growth. Sports Authority’s bankcruptcy this year should provide Dick’s with a fresh influx of customers.
Earnings prospects are still low despite continued efforts to jumpstart growth. Management lowered its fiscal 2016 and second quarter guidance after a bleak first quarter. For the second quarter, management expects earnings per share in the range of $0.62 - $0.72 cents. Same store sales are projected in the range of -4% to -1% after growing 0.5% last quarter.
Do you think DKS can beat estimates? There is still time to get your estimate in here !
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