Dick's Sporting Goods(DKS) ZACKS·2025-01-21 17:41Price Performance - DICK'S Sporting Goods stock has risen over 52% in the past year, outperforming the Retail-Wholesale sector's 32.1% return and the Zacks Retail - Miscellaneous industry's 9.2% growth [1] - The stock also surpassed the S&P 500 index's 26.4% appreciation in the same period [1] Strategic Efforts - The company is benefiting from merchandising initiatives and store-related endeavors aimed at enriching the customer experience [2] - DICK'S Sporting is focusing on digital innovation and the omnichannel experience to drive athlete engagement [4] - The GameChanger app has seen significant growth, with over 5.5 million unique users in Q3 fiscal 2024, a 21% increase from the prior year, and nearly 2 million average daily active users [5] Store Innovations - The company has transformed its 50,000 square-foot stores into the Field House concept, inspired by the House of Sport, offering interactive experiences and unique presentations [6] - Efforts to enhance service levels across digital and store experiences are expected to drive significant sales and profitability [7] Earnings and Growth - The Zacks Consensus Estimate for fiscal 2024 sales is 13.88, reflecting a 7.5% increase [8] - For the next fiscal year, sales are projected at 14.76 (6.3% growth) [8] Challenges - The company faces an uncertain macroeconomic environment and elevated costs due to higher wage rates, investments in talent and technology, and marketing expenses [9] - Adjusted SG&A expenses increased by 7.2% in Q3 fiscal 2024, deleveraging 162 basis points as a percentage of sales [9] - Pre-opening expenses for Q4 fiscal 2024 are expected to be moderately higher, with an anticipated adverse impact of nearly $30 million or 10 cents per share [11] Valuation - DICK'S Sporting stock is trading at a forward 12-month price/earnings ratio of 15.48, lower than the industry's 17.81 and its five-year high of 24.78 [12] Conclusion - The company is making efforts to tackle cost issues and optimize its business structure [14] - Robust omnichannel athlete experience and unique product assortment are seen as positive factors [14] Key Picks in Retail - Deckers (DECK) is highlighted with a Zacks Rank 1, expected to see 13.6% sales growth in the current fiscal year and an average earnings surprise of 41.1% in the trailing four quarters [15] - Abercrombie (ANF) also holds a Zacks Rank 1, with a 13% sales growth estimate and a 16.8% earnings surprise in the last reported quarter [16] - Boot Barn (BOOT) carries a Zacks Rank 2, with a 13.4% sales growth estimate and an average earnings surprise of 6.8% in the trailing four quarters [16][17]