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Dick’s Sporting’s 3Q Profit Beats Estimates On Robust Online Sales
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Dick’s Sporting’s 3Q Profit Beats Estimates On Robust Online Sales

Dick’s Sporting Goods reported stronger-than-expected 3Q results, spurred by robust e-commerce sales coupled with higher same-store sales. The sporting goods chain’s 3Q earnings of $2.01 per share crushed the Street’s estimates of $0.93 and spiked 287% year-over-year. The company’s sales increased by 22.9% year-over-year to $2.4 billion and exceeded analysts’ expectations of $2.2 billion.

Dick’s Sporting’s (DKS) same-store sales jumped 23.2% year-over-year, compared to the 13% estimated by analysts. Meanwhile, its e-commerce sales surged 95% and represented about 21% of total sales.

Dick’s CEO Edward W. Stack stated that the exceptionally strong 3Q results were driven by “the favorable shifts in consumer demand, as the positive trends across golf, outdoor activities, home fitness and active lifestyle continued throughout Q3.”

Stack further added that “Overall, the favorable trends in our business have continued into Q4. These strong sales results have been partially offset by warmer weather that has negatively impacted sales in important cold-weather categories. Taken together, through the first three weeks of Q4, our consolidated comp sales have increased in the high-teens.” (See DKS stock analysis on TipRanks).

On Nov. 10, Cowen & Co. analyst John Kernan raised the stock’s price target to $69 (17.3% upside potential) from $68 and maintained a Buy rating. He said that the weakness in Dick’s Sporting should be considered as a buying opportunity. Kernan sees upside to the consensus estimates for 2021 due to the revival in sports and back to school season sales.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 8 Buys, 9 Holds and 1 Sell. The average price target stands at $62.56 and implies upside potential of about 6.4% to current levels. Shares have increased by about 20.6% year-to-date.

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