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Category: Stock Market and Dicks Sporting Goods
Date: 3 December 2019 Stock Price: $46.11 We take a look at the 3rd quarter of their 2019 fiscal year earnings report of Dick's Sporting Goods a retailer offering an extensive assortment of quality sports equipment, apparel, footwear and accessories from 733 stores across the United States
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About Dick's Sporting Goods
Founded in 1948, DICK'S Sporting Goods, Inc. is a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-quality sports equipment, apparel, footwear and accessories. As of November 2, 2019, the Company operated 733 DICK'S Sporting Goods locations across the United States, serving and inspiring athletes and outdoor enthusiasts to achieve their personal best through a blend of dedicated teammates, in-store services and unique specialty shop-in-shops dedicated to Team Sports, Athletic Apparel, Golf, Lodge/Outdoor, Fitness and Footwear.
Headquartered in Pittsburgh, PA, DICK'S also owns and operates Golf Galaxy and Field & Stream specialty stores, as well as GameChanger, a youth sports mobile app for scheduling, communications and live scorekeeping. DICK'S offers its products through a content-rich eCommerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront.
Headquartered in Pittsburgh, PA, DICK'S also owns and operates Golf Galaxy and Field & Stream specialty stores, as well as GameChanger, a youth sports mobile app for scheduling, communications and live scorekeeping. DICK'S offers its products through a content-rich eCommerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront.
Overview of Dick's Sporting Goods' 3rd quarter 2019 earnings report
The data below refers to the latest quarter unless specified otherwise:
- Net sales: $1.926 billion (up from $1.857 billion for the same quarter in the previous year)
- Net sales increased by 3.7% over the last 12 months
- Cost of sales: $1.381 billion (up from $1.333 billion for the same quarter in the previous year)
- Cost of sales increased by 3.6% over the last 12 months
- Net earnings: $57.584 million (up from $37.827 million for the same quarter in the previous year)
- Diluted earnings per share: $0.66 (up from $0.39 for the same quarter in the previous year)
- PE ratio of Dick’s Sporting Goods: 15.9
- Diluted number of shares in issue: 90.130 million (down from 99.878 million for the same quarter of the previous year)
- Cash and equivalents: $87.622 million
- Cash and equivalents per share: $0.97
- Cash and equivalents makes up 1.2% of Dick’s Sporting Goods' current market capital
- Cash and equivalents makes up 3.04% of Dick’s Sporting Goods' total assets
- Inventories: $2.573 billion
- Inventories makes up 35.7% of Dick’s Sporting Goods' total assets
- Dick’s Sporting Goods' inventories increased by 17.1% over the last 12 months
- Stockholders equity in Dick's Sporting Goods: $1.708 billion
- Stockholders equity per share in Dick's Sporting Goods: $18.95
- Dick's Sporting Goods is trading at 2.43 times its stockholders equity per share which is within the expected range of between 2 and 4 times that most firms tend to trade at
Dick's Sporting Goods' management commentary on the results and earnings guidance
PITTSBURGH, Nov. 26, 2019 /PRNewswire/ -- DICK'S Sporting Goods, Inc. (NYSE: DKS), the largest U.S. based full-line omni-channel sporting goods retailer, today reported sales and earnings results for the third quarter ended November 2, 2019.
"We are very pleased with our strong third quarter results, as we delivered a 6.0% comp sales increase and meaningful gross margin expansion. We saw increases in both average ticket and transactions, as well as growth across each of our three primary categories of hardlines, apparel and footwear," said Edward W. Stack, Chairman and Chief Executive Officer. "As we head into the holiday season, we remain very enthusiastic about our business, and we are pleased to increase our full year sales and earnings outlook for the third time this year."
Lauren R. Hobart, President, added, "The momentum in our stores continued to build with our focus on service standards, recognition of great results and stronger marketing. Combining this with the successful openings of our new eCommerce fulfillment centers and enhanced website functionality, we continue to build one of the best omni-channel experiences in retail."
"We are very pleased with our strong third quarter results, as we delivered a 6.0% comp sales increase and meaningful gross margin expansion. We saw increases in both average ticket and transactions, as well as growth across each of our three primary categories of hardlines, apparel and footwear," said Edward W. Stack, Chairman and Chief Executive Officer. "As we head into the holiday season, we remain very enthusiastic about our business, and we are pleased to increase our full year sales and earnings outlook for the third time this year."
Lauren R. Hobart, President, added, "The momentum in our stores continued to build with our focus on service standards, recognition of great results and stronger marketing. Combining this with the successful openings of our new eCommerce fulfillment centers and enhanced website functionality, we continue to build one of the best omni-channel experiences in retail."
Capital Allocation
On November 21, 2019, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $0.275 per share on the Company's Common Stock and Class B Common Stock. The dividend is payable in cash on December 31, 2019 to stockholders of record at the close of business on December 13, 2019.
During the third quarter of 2019, the Company repurchased approximately 2.8 million shares of its common stock at an average cost of $35.07 per share, for a total cost of $99.5 million. Under the five-year share repurchase program authorized by the Board of Directors in March 2016, the Company has repurchased approximately $933 million of common stock and has approximately $67 million remaining under the program. On June 12, 2019, the Company's Board of Directors authorized an additional five-year share repurchase program of up to $1 billion of the Company's common stock. The Company plans to continue to purchase under the 2016 program until it is exhausted or expired.
Full Year 2019 Outlook
On November 21, 2019, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $0.275 per share on the Company's Common Stock and Class B Common Stock. The dividend is payable in cash on December 31, 2019 to stockholders of record at the close of business on December 13, 2019.
During the third quarter of 2019, the Company repurchased approximately 2.8 million shares of its common stock at an average cost of $35.07 per share, for a total cost of $99.5 million. Under the five-year share repurchase program authorized by the Board of Directors in March 2016, the Company has repurchased approximately $933 million of common stock and has approximately $67 million remaining under the program. On June 12, 2019, the Company's Board of Directors authorized an additional five-year share repurchase program of up to $1 billion of the Company's common stock. The Company plans to continue to purchase under the 2016 program until it is exhausted or expired.
Full Year 2019 Outlook
- Based on an estimated 89 million average diluted shares outstanding, the Company currently projects earnings per diluted share to be approximately $3.63 to 3.73. The Company reported earnings per diluted share of $3.24 for the 52 weeks ended February 2, 2019.
- The Company's earnings per diluted share guidance includes approximately $30 million of net investments in business transformation initiatives.
- The Company's earnings per diluted share guidance includes the expected impact from all tariffs currently in effect, as well as any new tariffs slated to go into effect.
- The Company currently projects non-GAAP earnings per diluted share to be approximately $3.50 to 3.60. This excludes the gain on sale of subsidiaries, non-cash asset impairments, charges related to the exit of eight Field & Stream stores, and the favorable settlement of a litigation contingency.
- The Company is continuing the strategic review of its hunt business, including Field & Stream.
- Consolidated same store sales are currently expected to increase 2.5% to 3%, compared to a 3.1% decrease in 2018.
- In 2019, the Company anticipates capital expenditures to be approximately $230 million on a gross basis and approximately $200 million on a net basis. In 2018, capital expenditures were $198 million on a gross basis and $170 million on a net basis.
Dicks Sporting Goods (NYSE: DKS) stock price history
The image below, obtained from Google, shows the stock price history of Dicks's Sporting Goods over the last 5 years. And its been a pretty volatile and largely negative time for Dick's stockholders The group's stock traded at around $48.40 a stock 5 years ago and is currently trading at $46.11 a stock. That's a loss of -4.7% suffered by Dollar Tree stockholders over the last 5 years.
Dicks stock is trading at a lot closer to its 52 week high of $47.79 than it is to its 52 week low of $29.69 which to us is a clear indication that the short term momentum and sentiment of Dicks Sporting Goods' stock is positive
Dicks stock is trading at a lot closer to its 52 week high of $47.79 than it is to its 52 week low of $29.69 which to us is a clear indication that the short term momentum and sentiment of Dicks Sporting Goods' stock is positive
Recent coverage of Dick's Sporting Goods
The extract below discusses the latest regarding Dick's Sporting Goods as obtained from TheStreet.com
Dick's Sporting Goods (DKS - Get Report) on Tuesday reported third-quarter earnings and revenue that blew past analysts' forecasts and also raised its guidance for the fourth quarter amid stronger foot traffic and sales of its bigger-ticket items.
The sporting goods chain posted net income of $44.8 million, or 52 cents a share, vs. $37.8 million or 39 cents a share, in the comparable year-earlier period. Analysts polled by FactSet had been expecting earnings of 38 cents a share. Sales came in at $1.96 billion, above consensus forecasts of $1.91 billion.
Same-store sales jumped 6%, driven by increases in both average ticket and transactions, representing the company's strongest quarterly comparable sales gain since 2013. "We saw increases in both average ticket and transactions, as well as growth across each of our three primary categories of hardlines, apparel and footwear," CEO Edward Stack said in a statement. "As we head into the holiday season, we remain very enthusiastic about our business, and we are pleased to increase our full year sales and earnings outlook for the third time this year."
Read the full article here
Dick's Sporting Goods (DKS - Get Report) on Tuesday reported third-quarter earnings and revenue that blew past analysts' forecasts and also raised its guidance for the fourth quarter amid stronger foot traffic and sales of its bigger-ticket items.
The sporting goods chain posted net income of $44.8 million, or 52 cents a share, vs. $37.8 million or 39 cents a share, in the comparable year-earlier period. Analysts polled by FactSet had been expecting earnings of 38 cents a share. Sales came in at $1.96 billion, above consensus forecasts of $1.91 billion.
Same-store sales jumped 6%, driven by increases in both average ticket and transactions, representing the company's strongest quarterly comparable sales gain since 2013. "We saw increases in both average ticket and transactions, as well as growth across each of our three primary categories of hardlines, apparel and footwear," CEO Edward Stack said in a statement. "As we head into the holiday season, we remain very enthusiastic about our business, and we are pleased to increase our full year sales and earnings outlook for the third time this year."
Read the full article here
Dick's Sporting Goods (NYSE: DKS) latest stock valuation
So what do we value Dick's Sporting Goods stock at based on their latest earnings release? Based on Dick's Sporting Goods latest earnings report and their guidance provided for the fiscal year our valuation model provides a target price (full value price) for Dick's Sporting Goods stock at $46.40 a stock. We therefore believe the stock of Dick's Sporting Goods is fully valued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $46.40. A good entry point into Dick's Sporting Goods would therefore be at $41.80 or below.
We expect the stock of Dick's Sporting Goods to trade in a narrow range around its current price in coming weeks and months
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $46.40. A good entry point into Dick's Sporting Goods would therefore be at $41.80 or below.
We expect the stock of Dick's Sporting Goods to trade in a narrow range around its current price in coming weeks and months
Next earnings release of Dick's Sporting Goods
It is expected that Dick's Sporting Goods will release their 4th quarter and full fiscal 2019 earnings report in late February 2020