Dicks Sporting Goods Inc (NYSE:DKS) is brushing up against a move just shy of 10% in early Tuesday trading. If it holds, DKS stock will be up nearly 70% — and it can thank beats on the top and bottom lines for its second quarter.
This marks back-to-back quarters in which DKS trumped Street estimates … and the first quarter since rival Sports Authority crumbled.
DKS Stock Earnings Rundown
On the top line, Dick’s Sporting Goods hit $1.97 billion, a gain of roughly 8% over the same quarter last year, to beat estimates of $1.88 billion. DKS profits totaled $91.4 million, or 82 cents per share. That’s better than last year’s 77 cents in earnings per share and estimates for 69 cents.
Same-store sales, an important metric of retailer health, rose 2.8%, but the real star was e-commerce, which hit 8.5% of total sales. For comparison, e-commerce comprised 7.3% of net sales in Q2 2015. Dick’s needs to continue luring customers to its online experience as brick-and-mortar stores take a backseat to the likes of Amazon.com, Inc. (NASDAQ:AMZN).
For the third quarter, the sporting goods company projects EPS ranging from 39 cents to 42 cents. Unlike last quarter, where second-quarter guidance came in soft (but didn’t register on the scale for investors), DKS Q3 guidance is beyond the 38 cents consensus.
For the full year, Dick’s aims for a per-share profit in the range of $2.90 to $3.05 — much improved from the previous $2.60 to $2.90 projection, and also besting the $2.84 consensus.
What’s more, Dick’s, which also will open 36 new stores this year, is calling for a 2% to 3% increase in same-store sales for the third quarter. Comps ticked just 0.4% higher in Q3 2015.
Bottom Line on Dick’s Stock
Not everything is copacetic. On Monday, Teri List-Stoll was suddenly out as CFO, replaced in the interim by operating chief Andre Hawaux. List-Stoll had only been with the company for a year, coming from Kraft Foods Group Inc. While the market applauded the move (Hawaux had previously served as CFO), management shakeups at the top can be cause for worry.
Still, Dick’s is riding some serious momentum. DKS shares have raced ahead nearly 50% in the past six months to outperform the SPDR S&P Retail (ETF) (NYSEARCA:XRT) by nearly 40 percentage points.
And even after those gains, DKS stock is still a bargain — at least relatively. Dick’s shares trade at just under 20 times earnings, compared to an industry average of about double that. Meanwhile
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
