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
-
Five Steps to a Mindfully Fearless CareerIf, like many women, you're struggling with imposter syndrome, try developing an athlete's winning mindset. It's as simple as facing one small fear every day.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
Five Steps to a Mindfully Fearless Career
If, like many women, you're struggling with imposter syndrome, try developing an athlete's winning mindset. It's as simple as facing one small fear every day.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical Tension
The main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Lowe's Stock Is Falling After Earnings. Here's WhyLowe's stock is lower Tuesday as Wall Street weighs a beat-and-raise quarter against declining revenue. This is what you need to know.
-
Why Walmart Stock's a Buy After Its Beat-And-Raise QuarterWalmart is the best Dow Jones stock Tuesday after the retail giant's solid earnings report and outlook and Wall Street thinks it's just getting started. Here's what they're saying.
-
Winners and Losers of Fed Rate CutsNavigating interest-rate changes can seem daunting, but these areas of the fixed-income market could perform better (or worse) than others.
-
Six Ways to Optimize Your Charitable Giving Before Year-EndAs 2024 winds down, right now is the time to look at how you plan to handle your charitable giving. The sooner you start, the more tax-efficient you can be.
-
How Preferred Stocks Can Boost Your Retirement PortfolioHigher yields, priority on dividend payments and the potential for capital appreciation are just three reasons to consider investing in preferred stocks.
