Dick’s Sporting Goods’ stock jumps, lifted by strong fourth-quarter results, robust outlook

By James Rogers

Company’s 2022 revenue up 41% from the year before the 2019 pandemic

Dick’s Sporting Goods Inc. stock rose 8.2% on Tuesday after the company beat analysts’ earnings estimates in its fourth-quarter results and presented a better-than-expected full-year earnings outlook.

The retailer reported net income of $236 million, or $2.60 per share, for the fourth quarter, compared to $346 million, or $3.16 per share, in the year-ago quarter. On an adjusted basis, Dick’s Sporting Goods (DKS) earned $2.93 per share compared to the FactSet consensus of $2.88 per share. Revenue for the fourth quarter was $3.597 billion, up from $3.352 billion a year ago and above the FactSet consensus of $3.451 billion.

Ahead of the results, analysts had predicted that Dick’s Sporting Goods would sidestep the pullback in discretionary spending that has hit many retailers this earnings season.

During a conference call to discuss the results, Dick’s Sporting Goods CEO Lauren Hobart noted that the company’s sales were up 41% in 2022 compared to 2019 before the COVID-19 pandemic. The company’s fourth-quarter adjusted earnings of $2.93 were also “significantly better” than any pre-COVID fourth quarter in the company’s history, she said.

Related: Dick’s Sporting Goods will sidestep weakness in retail spending, analysts say

During the conference call to discuss the results, Navdeep Gupta, CFO of Dick’s Sporting Goods, stated that approximately 80% of the company’s sales growth compared to 2019 was attributable to growth in footwear, athletic apparel, team sports and golf.

The company’s same-store sales rose 5.3% in the fourth quarter, beating the FactSet consensus of 2.1%. For fiscal 2023, Dick’s Sporting Goods expects earnings of $12.90 to $13.80 per share, ahead of the FactSet consensus of $12. The company expects fiscal 2023 same-store sales to be flat, up 2% compared to the FactSet consensus of 0.2%.

“In 2023, we will grow both our sales and profits through positive comps, a return to space growth and a higher merchandise margin,” the company said in a statement. “Our consistent performance and financial strength positions us to increase the rate of investment in our business to support long-term growth opportunities while also returning significant capital to shareholders.”

Dick’s Sporting Goods more than doubled its quarterly dividend to $1 per share.

Of 27 analysts polled by FactSet, 13 have an overweight or buy rating, 13 have a hold rating and one has an underweight rating on Dick’s Sporting Goods.

-James Rogers

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently of Dow Jones Newswires and The Wall Street Journal.

(ENDS) Dow Jones Newswires

03-07-23 1046ET

Copyright (c) 2023 Dow Jones & Company, Inc.