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DICK’S Sporting Goods Q3 Results Surpass Estimates

Sporting goods retail company DICK’S Sporting Goods, Inc. (DKS) has reported better-than-expected results for the third quarter ended October 30, 2021. An increase in net sales was the primary driver of the strong results.

Following the earnings, shares of the company declined 4.1% on Tuesday. The stock, however, pared its losses slightly to close at $134.70 in the extended trading session.

Revenue & Earnings

DICK’S Sporting Goods reported quarterly net sales of $2.75 billion, up 13.9% year-over-year. Further, the figure topped the consensus estimate of $2.45 billion. Consolidated same-store sales (up 12.2%) and eCommerce sales (up 1%) were majorly responsible for the overall rise in net sales.

The company reported quarterly earnings of $3.19 per share, up 58.7% year-over-year. The figure also surpassed the consensus estimate of $1.86 per share.

Meanwhile, the company ended the quarter with roughly $1.37 billion in cash and cash equivalents and no outstanding borrowings under its $1.855 billion revolving credit facility.

Outlook

For full-year 2021, the company expects to post earnings in the range of $14.60 per share to $14.80 per share against the consensus estimate of $13.13 per share. Revenue for the same period is anticipated between $12.12 billion and 12.19 billion against the consensus estimate of $11.84 billion.

Management Commentary

The CEO of DICK’S Sporting Goods, Lauren Hobart said “We are extremely pleased to announce a record third quarter in which we delivered significant sales and earnings growth over both last year and 2019. Consumer demand remained strong, and our differentiated product assortment continued to drive exceptional sales and merchandise margin momentum. I’d like to thank all of our teammates for their hard work and commitment to DICK’S Sporting Goods, which helped make this performance possible.”

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Price Target

On November 23, Robert W. Baird analyst Justin Kleber reiterated a Hold rating on the stock. The analyst, however, raised the price target from $135 to $140, which implies upside potential of 4.1% from current levels.

According to the analyst, the company’s strong EPS showing in the third quarter, upbeat guidance for the full year 2021 and inventory flow visibility gives it a strong footing.

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 10 Buys and 7 Holds. The average DICK’S Sporting Goods price target of $151.94 implies that the stock has upside potential of 12.9% from current levels.

Smart Score

DICK’S Sporting Goods scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to outperform market expectations. Shares have gained 128.1% over the past year.

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