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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