Dicks Facing Short-Term Pressure, Set Up For Long-Term Performance

Barclays has cut its 2016 EPS view of Dicks Sporting Goods Inc

by $0.10 to $2.90, saying that the recent liquidations in the sporting goods industry is expected to hurt the company in the short term. Street analysts, on average, expect earnings of $2.89 a share for the full year. However, analyst Matthew McClintock believes that the sporting goods retailer is poised to take over this "displaced market share" beyond 2016. The company noted that there are over 200 and 350 stores within five and ten miles, respectively, of a Dick's store that are closing and liquidating, representing a "significant opportunity for DKS to capture substantial market share." DKS reported first quarter EPS of $0.50, in line with Barclays estimate, but above consensus' $0.49. Revenue increased 6.1 percent to $1.66 billion versus Barclays estimate of $1.67 billion. Consolidated comp store sales increased 0.5 percent as apparel performed below expectations while outdoor comped positive. Inventory increased 7.3 percent, driven by the cold weather merchandise that was packed away for the 2016 winter season. Looking ahead, the company expects its premium full service footwear deck to be a more significant contributor to sales. DKS highlighted that CALIA was the third biggest women's athletic brand during the quarter, and the brand is set to become the third largest women's athletic brand by the end of 2016. At the time of writing, shares of DKS rose 4.86 percent to $43.37. McClintock has an Equal Weight rating and $50 price target on the stock.