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Dick’s (DKS) Hits 52-Week High on Solid Growth Prospects


Shares of sporting goods retailer, Dick's Sporting Goods Inc. DKS hit a 52-week high of $60.55 yesterday, though it eventually closed a tad lower at $60.36. This was backed by strategic growth endeavors and stellar second-quarter fiscal 2016 performance. Notably, this Zacks Rank #3 (Hold) company’s stock jumped over 70% year-to-date, and has a long-term earnings growth rate of 12.3% with a VGM Score of “A.”

DICKS SPRTG GDS Price and Consensus

DICKS SPRTG GDS Price and Consensus | DICKS SPRTG GDS Quote

What’s Driving the Stock?

Dick’s Sporting has been riding on its unique strategy of offering exclusive branded merchandise, which provides it with a platform to compete better with other players in the arena. Also, the company remains committed toward store expansion, enhancing store productivity and undertaking investments in omni-channel business, as is evident from its increased eCommerce penetration.

Dick’s Sporting has been aggressively expanding its store base to achieve the long-term revenue target of $8.7–$9.0 billion by the end of fiscal 2017. The company plans to open nearly 36 namesake stores, 9 Field & Stream outlets, and 2 Golf Galaxy stores in fiscal 2016.

Meanwhile, Dick’s Sporting remains focused on developing every possible avenue to generate greater sales. Also, the company launched its first Field & Stream eCommerce website, thereby ending the second phase of its eCommerce development plan.

Additionally, the company operated Golf Galaxy’s eCommerce site, and is currently on track to transform dicks.com to its proprietary site by Jan 2017. In order to improve its mobile app, the company recently added the ‘Move’ feature, which helps customers to keep track of their fitness status.

On the back of aforementioned initiatives, Dick’s Sporting delivered robust results for second-quarter fiscal 2016, which marked its second positive earnings surprise in a row. Moreover, both top and bottom lines increased year over year.

Consequently, management raised its comparable-store sales and earnings projection for fiscal 2016, thus triggering an uptrend in estimates. Over the past 30 days, the Zacks Consensus Estimate of $3.03 and $3.60 for fiscal 2016 and fiscal 2017 increased 19 cents and 18 cents per share, respectively.

Stocks that Warrant a Look

Some better-ranked stocks in the same industry include Big 5 Sporting Goods Corp. BGFV, Five Below, Inc. FIVE and ULTA Salon, Cosmetics & Fragrance, Inc. ULTA, all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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