Dick's Sporting Goods Set To Outperform: An In-Depth Forecast By Analyst Ahead Of 1Q23 Earnings

Wedbush analyst Seth Basham reiterated an Outperform rating on the shares of Dick’s Sporting Goods Inc DKS with a price target of $155.
The analyst remains constructive on DKS into 1Q23 earnings, scheduled on May 23, before the market opens.
Despite softer consumer discretionary spending in March and into April and unfavorable weather, the analyst expects comparable sales of modestly above the consensus 3.9% estimate.
The analyst believes that the quarter started off strong with favorable sell-through of winter seasonal products; however, an extended winter season and delayed spring coupled with macro volatility likely clipped sales in March and early April.
Sporting goods, hobby, instrument and book store Census Bureau category retail sales are on pace to increase +2.6% y/y in 1Q23, which would only be a -30 basis points sequential deceleration on a one-year basis but a sharper -1,400 basis points deceleration on a two-year stacked basis, said the analyst.
By comparison, the analyst’s +5% 1Q23 DKS comp estimate implies a similar -30 basis sequential deceleration on a one-year basis and a -1,530 basis deceleration on a two-year stacked basis.
DKS should benefit from a stronger inventory position vs. last year when spring seasonal apparel arrivals were delayed.
The delayed start to the spring season could lead some spring sales to shift to 2Q, and the analyst expects DKS to reiterate its full-year comparable guidance of flat to +2%.
The analyst models 1Q23 EPS of $3.27 vs. consensus $3.13 and 2023 EPS of $13.39 versus consensus $13.47.
Price Action: DKS shares are trading higher by 0.13% at $139.51 on the last check Friday.

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