Why Dick's Sporting Goods Shares Are Rising Today

Dick's Sporting Goods Inc DKS reported third-quarter FY23 sales growth of 2.8% year-on-year to $3.042 billion, beating the analyst consensus estimate of $2.940 billion.

Comparable store sales increased 1.7% versus a 6.5% increase a year ago.

Gross margin expanded 67 basis points Y/Y to 34.89%. Adjusted EPS of $2.85 beat the analyst consensus of $2.45.

During Q3, the company incurred pre-tax business optimization charges of $52.5 million related to eliminating certain positions primarily at its customer support center and integrating its Moosejaw operations and other expenses to optimize the cost structure of its outdoor specialty business. 

The company said it anticipates additional pre-tax charges of approximately $10 million during Q4 related to its actions to optimize the outdoor specialty business and plans to continue its business optimization review, which it expects to complete during fiscal 2023.

The company exited the quarter with $1.406 billion in cash and equivalents. Total inventory at the end of Q3 decreased by 2% Y/Y to $3.283 billion.

Dividend: On November 20, 2023, the company declared a quarterly dividend of $1.00 per share, payable in cash on December 29, 2023, to stockholders of record at the close of business on December 15, 2023.

Outlook: Dick's Sporting Goods raised full-year Adj EPS outlook to $12.00-$12.60, up from $11.50-$12.30 previously (Estimate: $11.79).

The company sees comparable store sales of positive 0.5% to positive 2.0% (prior view: Flat to positive 2.0%).

Price Action: DKS shares are trading higher by 4.66% at $124.56 on the last check Tuesday.

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