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DICK'S Sporting (DKS) Stock Rallies 41.9% YTD: What to Know

DICK'S Sporting Goods, Inc. DKS is well-poised to tap the positive trends in the sporting industry, thanks to its robust strategies including merchandising initiatives and store-related efforts. The company has been gaining from brand strength and demand for its products that resonate well with customers. Undoubtedly, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing and efficiently controlling expenses.

Buoyed by such strengths, shares of this sporting goods dealer have gained 41.9% compared with the industry’s 4.9% growth in the year-to-date period. A VGM Score of A further adds strength to this current Zacks Rank #2 (Buy) company.

Let’s Delve Deeper

On the storefront, DICK’S Sporting launched DICK'S House of Sport, Golf Galaxy Performance Center, Public Lands and Going, Going, Gone!, which have been performing well. As a result, it launched another five House of Sport locations in the third quarter of fiscal 2023. Earlier, it opened two types of concept stores, namely OVERTIME by DICK’S Sporting Goods and DICK’S Sporting Goods Warehouse.

The company opened seven Golf Galaxy Performance Centers, thus expanding its Golf Galaxy chain to 104 locations, including 13 performance centers. The total store count was 725, including 104 Golf Galaxy stores, seven Public Lands stores and 17 Going, Going, Gone! Stores, as of Oct 28, 2023.

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Zacks Investment Research

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DKS plans to open other 10 House of Sport locations throughout 2024. By 2027, it expects 75 to 100 House of Sport stores nationwide. In 2024, Dick’s Sporting expects to grow its Golf Galaxy footprint with 10 new locations.

DICK’S Sporting has been witnessing strong comparable store sales (comps) for a while now. Healthy transaction growth and traffic have been boosting comps. Consolidated comps grew 2.8% year over year in fourth-quarter fiscal 2023, driven by higher transactions and average tickets. For fiscal 2024, management expects comps growth of 1-2% year over year.

DICK’S Sporting boasts a robust history of returning value to shareholders During fiscal 2023, the company repurchased 5.4 million shares of its common stock for $648.6 million under its share repurchase program. As of Feb 3, 2024, it has $780 million remaining under its authorization. During the 53-week period that ended Feb 3, 2024, the company paid dividends of $351 million. Management hiked the annualized dividend to $4.40 per share, an increase of 10% from the prior dividend. On Mar 13, 2024, the company’s board authorized and declared a quarterly dividend of $1.10 per share on the company's common stock and Class B common stock.

Given all the positives, DICK’S Sporting stock seems to deserve a place in your investment portfolio. Analysts seem quite optimistic about the company. The Zacks Consensus Estimate for fiscal 2024 sales and earnings per share (EPS) is currently pegged at $13.2 billion and $13.29, respectively. These estimates show corresponding growth of 1.3% and 2.9% year over year. The consensus mark for next fiscal year’s sales and EPS is $13.7 billion and $14.34, respectively, reflecting a year-over-year increase of 4.1% and 8%.

Other Key Picks

We have highlighted three other top-ranked stocks, namely American Eagle AEO, Gap GPS and Deckers DECK.

American Eagle, a leading apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for American Eagle’s current financial-year sales suggests growth of 3.3% from the year-ago reported figure. AEO delivered an earnings surprise of 22% in the last reported quarter.

Gap, a leading apparel retailer, currently sports a Zacks Rank of 1. GPS delivered an earnings surprise of 180.9% in the trailing four quarters.

The Zacks Consensus Estimate for Gap’s financial-year sales suggests growth of 0.3% from the year-ago reported figure.

Deckers, a footwear and accessories dealer, currently carries a Zacks Rank of 2. DECK delivered an earnings surprise of 32.1% in the trailing four quarters.

The Zacks Consensus Estimate for Deckers’ current financial-year sales suggests growth of 15.8% from the year-ago reported figure.

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DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report

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