Christmas came too late for Dick’s Sporting Goods Inc., according to Wedbush analysts, who say the sports retailer’s updated outlook suggests sales have picked up again after the big holiday.
Dick’s DKS, +1.08%, said in a filing that it now expects earnings per share of $ 13.70 to $ 13.79 for the full year, up from its previous guidance of $ 12.88 to $ 13.06. Adjusted earnings per share are projected to be $ 15.50 to $ 15.60 compared to the previous forecast of $ 14.60 to $ 14.80.
The FactSet consensus is at an EPS of $ 15.35.
The full-year outlook for sales in the same store is between 25.8% and 26.1% growth, versus the previous forecast of 24% and 25% growth. The FactSet consensus is for growth of 25.8%.
For the fourth quarter, earnings per share are expected to be between $ 3.00 and $ 3.09, and the outlook for adjusted earnings per share is between $ 3.45 and $ 3.55. The FactSet consensus is at $ 3.33.
Revenue in the same store is expected to grow between 3.7% and 4.7% in the fourth quarter, compared to a FactSet consensus for growth of 3.8%.
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“Despite the likelihood of a slowdown in sales growth in December due to Omicron fears and the fact that consumers are likely to have completed more Christmas shopping early due to widespread news of supply chain disruptions that could lead to stock shortages, we believe the Sales have recovered after Christmas, ”wrote analysts, led by Seth Basham.
“Given the continued strong cash flow excess, we believe Dick’s will continue to aggressively buy back shares and is considering” cleaning up “its balance sheet (namely the convertibles and warrants at the start of COVID).”
Wedbush rates Dick’s stock above average with a target price of $ 140.
“On the margin front, we feel that with the better 4Q sales (and considering the company had fewer promotions as of November 23rd), better merch margins in particular were a driver of the blow,” Wells Fargo wrote in a note.
“All in all, the better outlook for the fourth quarter was a positive surprise as Dick’s had expectations for the fourth quarter for the past few weeks, particularly due to concerns of an increase in vacation demand in October / November, which negatively impacted December […] and to the better updates in the whole group this Christmas season. “
Still, analysts say questions about 2022 remain.
Wells Fargo rates Dick’s stock as equally weighted with a target price of $ 128, down from $ 140.
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Truist Securities sees many long-term tailwinds, including the craze for the outdoors, the retailer’s relationship with Nike Inc. NKE, -2.53%, and the improvement in e-commerce. Analysts maintained their share buy rating and raised the price target from $ 161 to $ 168.
Dick’s stock is up 74.5% over the past year, while the S&P 500 Index SPX is up 23% -0.41% over the reporting period.