Dicks Sporting Goods, Inc. (DKS) recently rebounded from a long-term trend line after hitting a new multi-year high at $30.83 in late April. This Zacks #1 rank stock has an average earnings surprise of 38% over the last four quarters and boasts a bullish 16% next-year growth projection.
Company Description
Dicks Sporting Goods, Inc. operates as a sporting goods retailer in the United States. The company operates 424 Dick’s stores in 41 states and 91 Golf Galaxy stores in 31 states. Dick’s was founded in 1948 and has a market cap of $2.88 billion.
With the global economy showing signs of improvement over the last year from the darkest days of 2008 and 2009, consumers have begun to feel more comfortable loosening the purse string and spending money on discretionary items like clothes and sporting goods. That dynamic has been a big boost to the sector in general, and specifically Dicks, which reported better than expected Q1 results in early May that included a 57% earnings surprise.
First-Quarter Results
Net sales for the period were up 9.2% from last year to $1 billion. Although the company opened five new stores during the quarter, most of that growth came from same-store sale, which were up a very impressive 8.2%.
Earnings also came in strong at 22 cents, 57% ahead of the Zacks Consensus Estimate. Dick’s now has an impressive 38% average earnings surprise over the last four quarters.
The company also emerged from the quarter with a much stronger balance sheet, with its cash equivalents up $161 million from last year to $207 million with total borrowings coming in at $142 million.
Estimates
The analysts were encouraged by the solid results, with the current year up 10 cents in the last three months to $1.45. The next-year estimate is also up 10 cents in the same time to $1.68, a bullish 16% growth projection.
In spite of the recent string of gains, DKS trades in line with its peers, with a forward P/E of 17X.
2-Year Chart
DKS has been pretty hot over the last year, hitting a new multi-year high in late April above $30 before pulling back a bit on general market weakness. More recently shares have rebounded from a long-term trend line, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service. Zacks Investment Research
