Dick's Sporting Goods Ramps Up Growth: Analysts Raise Targets Amid Strong Sales And Margin Gains

Dick's Sporting Goods DKS reported better-than-expected first-quarter FY24 earnings and raised the outlook. The following are the comments from different analysts on the company.

Wedbush – Reiterates Neutral, price target raised from $210 to $230

Analyst Seth Basham looks positively on the results that show continued sales momentum despite a choppy industry demand environment, as DKS is capitalizing on strong new merchandise, good in-store and online service, easier comparisons and its Game Changer app.

The company's House of Sport store openings are on plan, and it was able to overcome above-consensus pre-opening costs in the quarter with strength in gross margins from lower-than-expected shrink, noted the analyst.

While DKS has momentum, the analyst expects that to slow in 2H24 against tougher comparisons and calendar shift reversals.

Stifel – Reiterates Hold, price target raised from $215 to $232

Analyst Jim Duffy said FY1Q represented a strong start against an uncertain backdrop underscoring both DKS consumer relevance. 

Continually improving allocations from vendors showcases relevance to brand partners and sets the stage for continued fundamental health into an Olympic summer, noted the analyst.

Following breakout margin since pre-pandemic, DKS is pivoting to growth led by the more capital intensive ~120K sq. foot House of Sport stores.

Goldman Sachs – Reiterates Buy, price target raised from $242 to $260

Analyst Kate McShane said DKS reported solid first-quarter comp trends with balanced growth in transactions and ticket.

The DKS consumer has held up well with growth across all income demographics, no signs of trade down, and without any areas of regional softness, asserted the analyst.

FY24 guidance was raised following better-than-expected first-quarter results, with EPS ~4% higher at the midpoint and momentum appears to be coming from DKS's differentiated product offering, noted the analyst.

The analyst raised the price target as the company likely continues to benefit from an ongoing trend towards health and wellness, strong brand heat, market share gains, and structurally higher margins.

Price Action: DKS shares are trading lower by 1.72% at $222.15 at the last check Thursday.

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