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Dick's Sporting Goods (DKS)
NYSE:DKS
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Dick's Sporting Goods
(NYSE:DKS)72Outperform
Positive Factors
Market Position
DKS preference share reached a new peak of 38.3%, well above Amazon's preference at 25%.
Product Innovation
Key softlines vendors like Nike, HOKA, and New Balance will offer premium innovation, enhancing product offerings at Dick's.
Negative Factors
Operational Costs
3Q SG&A $ +8% came in much higher than consensus, raising the question of whether DKS needs to continue investing/spending in key areas of the business to drive growth.
Dick's Sporting Goods (DKS) vs. S&P 500 (SPY)
Market Cap
$18.34B
Dividend Yield2.05%
Average Volume (3M)1.01M
Price to Earnings (P/E)16.1
Beta (1Y)0.96
Revenue Growth5.67%
EPS Growth21.00%
CountryUS
Employees55,500
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)13.99
Shares Outstanding57,903,976
10 Day Avg. Volume1,043,669
30 Day Avg. Volume1,007,255
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)N/A
Price to Sales (P/S)1.37
Price to Cash Flow (P/CF)84.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$265.11Price Target Upside24.98% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
Dick's Sporting Goods Business Overview & Revenue Model
Company DescriptionDick's Sporting Goods, Inc. engages in the retail of extensive assortment of authentic sports equipment, apparel, footwear, and accessories through a blend of associates, in-store services, and unique specialty shop-in-shops. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.
How the Company Makes MoneyDick's Sporting Goods generates revenue primarily through the sale of sporting goods and related products in its retail stores and online platform. The company's primary revenue streams include the sale of branded apparel, footwear, and equipment from well-known brands, as well as its own private-label products. Dick's leverages strategic partnerships with major brands to offer exclusive products and enhanced customer experiences. Additionally, the company benefits from its loyalty program, which encourages repeat purchases and customer retention. Seasonal sales, promotional events, and a strong e-commerce presence also contribute significantly to its overall revenue.
Dick's Sporting Goods Financial Statement Overview
Summary
Dick's Sporting Goods displays strong financial health with robust revenue and profit growth, efficient cost management, and a balanced capital structure. The company has a solid cash flow position, though there is room for improvement in free cash flow growth.Income Statement
Dick's Sporting Goods demonstrates a strong financial performance with solid revenue growth and profitability. The TTM (Trailing-Twelve-Months) gross profit margin is 35.73%, and the net profit margin is 8.65%, showcasing efficient cost management. Revenue grew by 3.39% over the last year, indicating a positive growth trajectory. The EBIT margin stands at 11.05%, and the EBITDA margin is 14.40%, reflecting strong operational efficiency. Overall, the company is well-positioned in terms of growth and profitability.85
Very Positive
Balance Sheet
The balance sheet of Dick's Sporting Goods shows a balanced financial structure with a debt-to-equity ratio of 1.47, indicating moderate leverage. The return on equity (ROE) is an impressive 37.92%, suggesting efficient use of equity capital to generate profits. The equity ratio is 29.31%, reflecting a healthy proportion of equity in the asset base. The company maintains a stable financial position with manageable debt levels and strong returns.78
Positive
Cash Flow
Cash flow analysis reveals robust operational cash flow generation, with a TTM operating cash flow to net income ratio of 1.24, indicating strong cash conversion from earnings. The free cash flow to net income ratio is 0.60, showing adequate free cash flow generation. However, the free cash flow growth rate declined by 25.60%, highlighting potential challenges in cash flow expansion. Overall, the company maintains solid cash flow metrics, supporting its financial stability.82
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 13.43B | 12.98B | 12.37B | 12.29B | 9.58B | 8.75B | Gross Profit |
| 4.80B | 4.55B | 4.28B | 4.71B | 3.05B | 2.55B | EBIT |
| 1.48B | 1.28B | 1.46B | 2.03B | 741.48M | 375.61M | EBITDA |
| 1.93B | 1.73B | 1.81B | 2.37B | 1.05B | 745.81M | Net Income Common Stockholders |
| 1.16B | 1.05B | 1.04B | 1.52B | 530.25M | 297.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.80B | 1.80B | 1.92B | 2.64B | 1.66B | 69.33M | Total Assets |
| 9.31B | 9.31B | 8.99B | 9.04B | 7.75B | 6.63B | Total Debt |
| 4.26B | 4.26B | 4.21B | 4.51B | 3.15B | 3.10B | Net Debt |
| 2.46B | 2.46B | 2.28B | 1.87B | 1.49B | 3.03B | Total Liabilities |
| 6.69B | 6.69B | 6.47B | 6.94B | 5.41B | 4.90B | Stockholders Equity |
| 2.62B | 2.62B | 2.52B | 2.10B | 2.34B | 1.73B |
| Cash Flow | Free Cash Flow | ||||
| 699.46M | 939.91M | 557.81M | 1.31B | 1.33B | 187.15M | Operating Cash Flow |
| 1.44B | 1.53B | 921.88M | 1.62B | 1.55B | 404.61M | Investing Cash Flow |
| -738.60M | -614.68M | -392.89M | -343.98M | -224.16M | -129.27M | Financing Cash Flow |
| -651.83M | -1.04B | -1.25B | -287.72M | 260.06M | -319.66M |
Dick's Sporting Goods Technical Analysis
Negative
212.12
Price Trends
231.69
Negative
218.89
Negative
215.00
Negative
Market Momentum
-4.71
Positive
34.60
Neutral
22.34
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DKS, the sentiment is Negative. The current price of 212.12 is below the 20-day moving average (MA) of 230.81, below the 50-day MA of 231.69, and below the 200-day MA of 215.00, indicating a bearish trend. The MACD of -4.71 indicates Positive momentum. The RSI at 34.60 is Neutral, neither overbought nor oversold. The STOCH value of 22.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DKS.
Dick's Sporting Goods Risk Analysis
Dick's Sporting Goods disclosed 30 risk factors in its most recent earnings report. Dick's Sporting Goods reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dick's Sporting Goods Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $2.16T | 36.91 | 20.72% | ― | 10.99% | 91.61% | |
78 Outperform | $460.27B | 60.89 | 30.98% | 0.44% | 5.35% | 16.22% | |
78 Outperform | $19.97B | 37.16 | 20.18% | 2.19% | 4.59% | -2.05% | |
72 Outperform | $18.34B | 16.08 | 37.92% | 2.05% | 5.67% | 21.00% | |
65 Neutral | $3.44B | 8.15 | 24.13% | 0.91% | -0.98% | -6.60% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
45 Neutral | $1.65B | ― | -14.85% | ― | 0.04% | -641.38% |
* Consumer Cyclical Sector Average
Performance Comparison
DKS
Dick's Sporting Goods
212.12
35.15
19.86%
AMZN
Amazon
203.80
30.29
17.46%
COST
Costco
1,036.87
267.84
34.83%
FL
Foot Locker
17.37
-6.87
-28.34%
WSO
Watsco
494.30
108.99
28.29%
ASO
Academy Sports and Outdoors
47.33
-23.65
-33.32%
Dick's Sporting Goods Earnings Call Summary
Earnings Call Date: Nov 26, 2024 | % Change Since: -0.95% | Next Earnings Date: Mar 11, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive outlook for DICK'S Sporting Goods, with strong sales growth, gross margin expansion, and an improved full-year earnings forecast. The company also highlighted successful strategic initiatives such as the expansion of House of Sport and omnichannel growth. However, these positives were somewhat tempered by increased SG&A expenses and a more promotional retail environment, requiring cautious guidance for the upcoming quarter.Highlights
Sales and Comps Growth
Third quarter sales increased 2.8% to $3.04 billion with comparable store sales up 1.7%, driven by increases in both transactions and average ticket.
Gross Margin Expansion
Non-GAAP gross margin expanded by 88 basis points compared to the prior year, primarily due to lower supply chain costs and improved merchandise margin.
Raised Full Year Outlook
DICK'S Sporting Goods raised its full year non-GAAP earnings per share guidance to $12 to $12.60, up from the prior expectation of $11.50 to $12.30.
Strong Back-to-School Performance
The back-to-school season was very strong, contributing significantly to the third quarter performance with notable increases in footwear, apparel, and accessories.
Omnichannel Athlete Growth
The company added 1.6 million new athletes this quarter, with omnichannel athletes making up the majority of sales and spending more than single-channel athletes.
House of Sport Expansion
DICK'S Sporting Goods expanded its House of Sport locations to 12 and plans to open approximately 10 more in 2024, indicating strong performance and positive reception.
Lowlights
Increased SG&A Expense
SG&A expenses increased by $50.1 million, deleveraging 102 basis points compared to last year, driven by investments in base rate, talent, and technology.
Higher Shrink Impact
Merchandise margin was partially offset by higher shrink of approximately 50 basis points, which remains a top priority for the company to address.
Promotional Environment
The retail environment was more promotional than expected, which contributed to a slight increase in inventory clearance activity to maintain fresh stock levels.
Company Guidance
During the Q3 2023 earnings call for DICK'S Sporting Goods, the company provided updated guidance reflecting increased confidence in their business strategies and market position. The full-year outlook for non-GAAP earnings per diluted share was raised to a range of $12 to $12.60, up from the previous expectation of $11.50 to $12.30. This revision is supported by the strong Q3 sales performance, which saw a 2.8% increase to $3.04 billion and a comparable store sales growth of 1.7%. Additionally, the company's gross margin expanded by 88 basis points year-over-year. DICK'S also adjusted its expectations for comparable store sales, now anticipating an increase of 0.5% to 2%, compared to the prior forecast of flat to 2% growth. The non-GAAP EBT margin at the midpoint is expected to be approximately 10.4%. Despite a cautious outlook due to macroeconomic uncertainties, the company remains optimistic about long-term growth opportunities, driven by strategic investments in omnichannel experiences and new store concepts like House of Sport and Golf Galaxy Performance Centers.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.