Dick’s Sporting Goods bullish despite analysts’ reservations

Dick’s Sporting Goods (DKS) didn’t altogether get the reaction it hoped for after releasing record third quarter figures last week, as investors reacted to analysts’ observations on the company’s earnings report and Black Friday traffic.

One analyst said the results raised questions about the 2022 growth trajectory, despite the better than expected earnings. Another wrote that “muted reaction to another stellar quarter from a sales and margin standpoint suggests there lacks a consensus on omni-channel productivity and gross margin levels into next year and beyond.”

Three days after the release of the results for the quarter ended October 30th, Black Friday traffic was also below investors’ expectations, with reports that it was down 26% from 2019 levels.

However DKS, a major player in the fishing retail market, remains bullish. President and CEO Lauren Hobart reported that the fourth quarter was ‘off to a strong start’, and that the full-year outlook had been increased for the third time this year.

The company announced net sales of $2.75 billion, a year-on-year increase of almost 14%, a 40% increase over 2019 and ahead of analysts expectations of $2.49 billion. Same store sales were up 12.3%, while e-commerce revenue increased 97% compared to the same quarter in 2019 and 1% better than 2020.

Driven by strong sales and gross margin expansion, the company’s net income for the quarter was $316.5 million – up on 2020’s $177.2 million and on 2019’s $57.6 million.

“We believe this will be the most transformational year in our history, and we expect to continue this transformation into 2022. I couldn’t be more excited about the future of Dick’s Sporting Goods,” said Ed Stack, Executive Chairman.