Shares of Dick’s Sporting Goods Inc. (DKS) rocketed 17% higher recently after the specialty retailer revealed another quarter that trumped Wall Street expectations. The company posted EPS of $3.30 in fiscal Q1 2025 (vs. $2.96 est.) and boosted its forecasts for earnings per share and comparable sales for the full year, observes John Buckingham, editor of The Prudent Speculator.
Same-store sales grew 5.3% (vs. 2.5% est.) while gross margin percentage expanded 10 basis points against the prior year quarter to 36.3% of sales. Executive Chairman Ed Stack explained, “Our strong first quarter results continue to prove that Dick’s is the go-to destination for sport and sport culture in the US. The product pipeline from our key brand partners and our vertical brand portfolio has never been better.”
Dick's Sporting Goods Inc. (DKS)
CEO Lauren Hobart added, “We are incredibly proud of our first quarter results. With our comps increasing 5.3% and double-digit EBT margin of over 11%, we drove continued momentum in our business. Our core strategies and execution are delivering strong results, and we are continuing to gain market share as consumers prioritize Dick’s Sporting Goods to meet their needs.”
Management now foresees EPS between $13.35 and $13.75 for the full fiscal year, up from the previous range of $12.85 to $13.25. Sales are expected to reach between $13.1 billion and $13.2 billion. Management also continues to expect to spend $300 million toward share repurchases in 2024.
Dick’s has been a terrific performer for us, nearly tripling since our recommendation in July 2022, and we have trimmed our position along the way. We are continuing to hold our remaining DKS shares as we like that the company is the largest pure sporting goods chain in the US, with limited competition at present in many of its markets.
Even as nearly all of the major brick and mortar competitors have gone bust in the past, Dick’s has found a way to excel, perhaps owing to improved omnichannel execution and growing its digital sales while providing a differentiated set of offerings across brands, price points, and categories. The P/E is still in reasonable territory at 16 times consensus forecasts over the next 12 months, and we have boosted our Target Price to $257.
Recommended Action: Hold DKS.
