J.P Morgan Gives Color On Dick's Sporting Goods Following Strong Earnings

Dick's Sporting Goods DKS reported adjusted EPS of $0.76, above consensus of $0.72 and in line with J.P Morgan's estimate of $0.76. Total sales rose 13.6%, with total same store sales of 9.4% vs. 6.2%E.

Overall comps and gross margin were the stars leading to a 6% beat vs. consensus, although SG&A spending took an element of the shine away. Tactically, it appears DKS is bracketing the Street in 1Q and FY as the $0.04 beat from 4Q is being passed through to 2011.

Given the impressive top-line momentum, which showed little impact from January's storms, and our belief that February saw a nice rebound, combined with a market view that DKS tends to guide purposefuly conservative, we believe the market should reward today's results.

J.P Morgan has an Overweight rating on DKS

DKS closed Monday at $38.23