Dick's Sporting Goods Delivers Q2 Beat, Analysts Deem Stock Weakness A 'Buying Opportunity'

Dick’s Sporting Goods Inc DKS shares dropped in early trading on Thursday as the retailer reported fiscal second-quarter results.

The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.

• Bank of America Securities analyst Robert Ohmes maintained a Buy rating, while raising the price target from $240 to $250.
• Oppenheimer analyst Brian Nagel reiterated an Outperform rating and a price target of $270.
• DA Davidson analyst Michael Baker reaffirmed a Buy rating and a price target of $265.

Check out other analyst stock ratings.

BofA Securities: Dick’s Sporting Goods reported its fiscal second-quarter adjusted earnings at $4.37 per share. It was ahead of Street's expectations of $3.86 per share. The company's same-store sales growth of 4.5% beat consensus of 3.5%, "driven by growth in ticket +3.5% and transactions +1% and strength in footwear and apparel," Ohmes said in a note.

"While DKS expects y/y gross margin expansion on a full-year basis, gross margins are expected to decline y/y in F3Q and F4Q driven by occupancy expense deleverage," the analyst wrote. He raised the fiscal 2025 adjusted earnings estimate from $13.75 per share to $13.90 per share, but lowered the third-quarter estimate from $2.83 per share to $2.58 per share, reflecting the higher pre-opening expenses in the back half of the year.

Oppenheimer: With underlying traffic expansion persisting, the company recorded same-store sales growth of 4.5%, Nagel said.

Management credits the new House of Sports and Field House store formats for helping to drive traffic trends. They lifted their full-year guidance for earnings to $13.55-$13.90 per share (from $13.35-$13.75 per share). Same-store sales growth is expected to be 2.5%-3.5% (from 2%-3%), the analyst wrote. Weakness in the stock is "a buying opportunity," he added.

DA Davidson: Dick’s Sporting Goods "once again" reported a beat-and-raise quarter, Baker said. Although the raise reflects "a slightly improved 2H outlook versus DKS previous plan," it was less than the second-quarter beat "as consensus estimates seemed to have underestimated the impact of the profit swing to 2Q from 3Q from last year's extra week," the analyst stated.

"We would buy that dip as the valuation remains at a discount versus peers despite the stock outperformance, and the company continues to show that margins are structurally higher than in the past for a number of reasons," he further wrote.

DKS Price Action: Shares of Dick’s had declined by 4.2% to $211.49 at the time of publication on Thursday.

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