Stock Story -
Sporting goods retailer Dick’s Sporting Goods (NYSE:DKS) reported results ahead of analysts' expectations in Q4 FY2023, with revenue up 7.8% year on year to $3.88 billion. The company expects the full year's revenue to be around $13.07 billion, in line with analysts' estimates. It made a GAAP profit of $3.57 per share, improving from its profit of $2.60 per share in the same quarter last year.
Is now the time to buy Dick's? Find out by reading the original article on StockStory.
Dick's (DKS) Q4 FY2023 Highlights:
- Revenue: $3.88 billion vs analyst estimates of $3.79 billion (2.2% beat)
- EPS: $3.57 vs analyst estimates of $3.33 (7.2% beat)
- Management's EPS guidance for the upcoming financial year 2024 is $13.05 at the midpoint, above analyst expectations of $12.86
- Gross Margin (GAAP): 34.4%, up from 32.4% in the same quarter last year
- Free Cash Flow of $584.7 million, down 26.6% from the same quarter last year
- Same-Store Sales were up 2.8% year on year (beat .vs expectations of up 0.5% year on year)
- Store Locations: 855 at quarter end, increasing by 2 over the last 12 months
- Market Capitalization: $15.35 billion
Athletic Apparel and Footwear RetailerApparel and footwear was once a category thought to be relatively safe from major e-commerce penetration because of the need to try on, touch, and feel products, but the category is now meaningfully transacted online. Everyone still needs clothes and shoes to go outside unless they want some curious (or horrified) looks. But this ongoing digitization is forcing apparel and footwear retailers–that once only had brick-and-mortar stores–to respond with omnichannel offerings. The online shopping experience continues to improve and retail foot traffic in places like shopping malls continues to stagnate, so the evolution of clothing and shoes sellers marches on.
Sales GrowthDick's is larger than most consumer retail companies and benefits from economies of scale, giving it an edge over its competitors.
As you can see below, the company's annualized revenue growth rate of 10.4% over the last four years (we compare to 2019 to normalize for COVID-19 impacts) was decent despite not opening many new stores, implying that growth was driven by higher sales at existing, established stores.
This quarter, Dick's reported solid year-on-year revenue growth of 7.8%, and its $3.88 billion in revenue outperformed Wall Street's estimates by 2.2%. Looking ahead, Wall Street expects revenue to remain flat over the next 12 months, a deceleration from this quarter.
Same-Store SalesDick's demand within its existing stores has barely increased over the last eight quarters. On average, the company's same-store sales growth has been flat.
In the latest quarter, Dick's same-store sales rose 2.8% year on year. This growth was a deceleration from the 5.3% year-on-year increase it posted 12 months ago, showing the business is still performing well but lost a bit of steam.
Key Takeaways from Dick's Q4 ResultsWe enjoyed seeing Dick's exceed analysts' revenue expectations this quarter. We were also glad its full-year earnings guidance exceeded Wall Street's estimates. Overall, this quarter's results seemed fairly positive and shareholders should feel optimistic. The stock is up 3.2% after reporting and currently trades at $194 per share.
