Dick’s Sporting Goods (DKS) stock is trading deep in negative territory Wednesday even after the athletic apparel and equipment retailer beat top- and bottom-line expectations for its second quarter and raised its full-year outlook.
In the 13 weeks ended August 3, Dick's Sporting Goods reported revenue of $3.5 billion, an increase of 7.8% year-over-year, driven by a 4.5% jump in comparable-store sales. Its earnings per share (EPS) were up 55% from the year-ago period to $4.37.
The quarterly results were "powered by our compelling omni-channel athlete experience, differentiated product assortment, best-in-class teammate experience and our ability to create deep engagement with the Dick's brand," said Dick's Sporting Goods CEO Lauren Hobart in a statement. "Our Q2 comparable-store sales were driven by growth in average ticket and transactions, and with growth in sales, gross margin expansion and SG&A leverage, we delivered earnings-before-taxes margin of nearly 14%."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results beat analysts' expectations. Wall Street was anticipating revenue of $3.44 billion and earnings of $3.83 per share, according to CNBC.
"Because of our strong Q2 performance and the confidence we have in our business, we are again raising our full-year outlook," Hobart said.
The company now anticipates comparable-store sales growth in the range of 2.5% to 3.5% and earnings per share of $13.55 to $13.90. This compares with its previous outlook of comparable-store sales growth between 2% to 3% and EPS in the range of $13.35 to $13.75.
Dick's added that it continues to anticipate revenue will arrive between $13.1 billion to $13.2 billion.
However, the midpoints of Dick's outlook for the full fiscal year failed to meet analysts' high expectations for the year. Specifically, Wall Street is forecasting revenue of $13.24 billion and earnings of $13.79 per share.
Is Dick's Sporting Goods stock a buy, sell or hold?
Even with today's drop, Dick's Sporting Goods is up more than 47% for the year-to-date. And Wall Street is bullish on the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for DKS stock is $239.08, representing implied upside of roughly 10% to current levels. Meanwhile, the consensus recommendation is a Buy.
However, not everyone is so upbeat toward Dick's Sporting Goods. Financial services firm Wedbush, for instance, has a Neutral rating (equivalent to a Hold) and a $250 price target on DKS stock.
While Wedbush analyst Seth Basham anticipated a beat-and-raise quarter from the sporting goods retailer, he says high investor expectations, decelerating consumer spending trends, and an elevated valuation keeps him on the sidelines at the moment.
Related Content
-
The Surprising Truth About Loneliness and LongevityWe've all heard about the epidemic of loneliness that can shorten lives and make retirement miserable. But there's more to the story.
-
The Dollar Index Is Sliding. Is Your Portfolio Prepared?The Dollar Index Is Sliding. Is Your Portfolio Prepared? The dollar's fall has been troubling because inflation appears to be constrained and the economy has been strong. Here's what it means for investors.
-
The Dollar Index Is Sliding. Is Your Portfolio Prepared?
The Dollar Index Is Sliding. Is Your Portfolio Prepared? The dollar's fall has been troubling because inflation appears to be constrained and the economy has been strong. Here's what it means for investors.
-
Seven Financial Considerations When Downsizing for RetirementWith prices going up on everything, you may be looking for a cheaper place to live. To truly evaluate costs, take a hard look at taxes and intangibles.
-
I Have Plenty of Money: Why Do I Need a Long-Term Care Plan?Long-term care planning, whether through insurance or self-funding, is crucial not only for financial protection but also to preserve family relationships and reduce the emotional and logistical burdens on loved ones.
-
The GENIUS, CLARITY, and Anti-CBDC Acts: What Bitcoin Investors Need to KnowMovement on the crypto front at the federal level has the potential to usher in substantial change. Here's what it means for your portfolio.
-
Wellness Stocks to Invest in NowBreakthroughs that help us live longer, healthier lives can also create opportunities for investors.
-
Three Steps for Evaluating a Downsize in Retirement: A Financial Planner's GuideUnless you think things through, you could end up with major (and costly) regrets. To make the right choice, base it on the three keys to retirement happiness.
-
Worried About Your Retirement Income? Four Questions to Ask Yourself, From a Financial PlannerIf you're nearing or in retirement and stressing about your retirement income (so many of us are), consider taking some time to think about these four issues.
-
Stock Market Today: Stocks Step Back From New HighsInvestors, traders and speculators continue the low-volume summer grind against now-familiar uncertainties.
