Omni-channel sporting goods retailer Dick’s Sporting Goods (DKS) reported record sales and earnings for Q2 2021. On August 25, DKS shares popped 13.3% and closed at $129.60.
Net sales in the quarter increased 20.7% year-over-year to $3.27 billion, beating the consensus estimate of $2.82 billion. Additionally, e-commerce sales jumped 111%.
Thanks to strong sales and gross margin rate expansion, net income in the quarter totaled $501.2 million or 5.08 per share, well above the consensus estimate of $2.70 a share.
Dick’s CEO Lauren Hobart stated, “Based on the strength of our business and our expectations for continued strong consumer demand, we are pleased to increase our full year sales and earnings outlook for the second time this year.”
Dick’s Sporting Goods estimates net sales in the range of $11.52 to $11.72 billion for the full year 2021. Non-GAAP income is expected in the range of $1.61 to $1.67 billion, or $12.45 to $12.95 per share. (See Dick’s Sporting Goods stock charts on TipRanks)
Additionally, in August, the company confirmed a special dividend of $5.50 on the company’s common stock and Class B common stock. It has also increased its quarterly dividend by 21% to $0.4375 per share. Notably, the company now plans to spend a minimum of $400 million in share buybacks.
Following the Q2 results, Robert W. Baird analyst Justin Kleber reiterated a Hold rating on the stock but raised his price target to $135 from $100, implying 4.17% upside potential to current levels.
According to the analyst, Dick’s Sporting Goods is executing at a high level, with several structural drivers expected to sustain pretax margins above prior peaks.
Consensus among analysts is a Moderate Buy based on 7 Buys, 9 Holds, and 1 Sell. The average Dick’s Sporting Goods price target of $115.73 implies 10.70% downside potential to current levels.
DKS scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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