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

Dicks Facing Short-Term Pressure, But Set Up For Long-Term Performance
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Barclays has cut its 2016 EPS view on Dicks Sporting Goods Inc (NYSE: DKS) 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 the sporting goods retailer is poised to take over this "displaced market share" beyond 2016.

The company noted 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."

Dick's 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.

Related Link: Goldman Upgrades Dick's To Buy; "A Competitor's Pain Is Its Rival's Gain"

Consolidated comp store sales increased 0.5 percent, as apparel performed below expectations; 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. Dick's 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 Dick's rose 4.86 percent to $43.37. McClintock has an Equal Weight rating and $50 price target on the stock.

Latest Ratings for DKS

Nov 2017BMO CapitalMaintainsOutperform
Nov 2017CitigroupMaintainsNeutral
Nov 2017UBSMaintainsNeutral

View More Analyst Ratings for DKS
View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings Long Ideas Guidance Price Target Reiteration Analyst Ratings Trading Ideas Best of Benzinga


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