- Q1 sales and earnings beat expectations
- Full year outlook raised
- Apparel and footwear a bright spot for US consumers
Shares in Dick’s Sporting Goods (DKS:NYSE) jumped 16% to an all-time high on Wednesday (29 May) after the omni-channel retailer reported better than expected first quarter sales and profit growth and raised its full year outlook.
Executive chairman Ed Stack noted the product pipeline from key brand partners and vertical brand portfolio has ‘never been better’.
The shares have gained 54% so far in 2024 and are 77% higher over the last 12-months, in sharp contrast to athletic apparel peer Lululemon Athletica (LULU:NASDAQ), whose shares languish at 12-month lows.
STRONG BEAT AND RAISE
Comparable store sales for the big-box retailer grew 5.3% in the quarter ended 4 May, more than double the 2.4% called for by consensus according to Refinitiv data, driven by robust customer demand.
The stores saw a 2.7% increase in transactions, meaning more customers are visiting Dick’s, as well as a 2.6% increase in average ticket sales, demonstrating that customers are also spending more.
Total sales were up 6.2% to $3.02 billion, compared with expectations of $2.94 billion and EPS (earnings per share) came in at $3.3, topping consensus forecasts of $2.94.
CEO Lauren Hobart said the company saw growth across all lines of the business. On an analyst call, she commented: ‘The consumer is absolutely putting a priority on a healthy and active lifestyle. You see people running and walking, being outdoors.’
RAISED OUTLOOK
Strong trading prompted the company to raise full year EPS guidance to a range of $13.35 to $13.75, ahead of consensus estimates calling for $13.25, although the company remains cautious for the rest of the financial year.
Finance chief Navdeep Gupta said this reflects a strong first quarter while maintaining prior expectations from the second quarter onwards.
Apparel and footwear appear to be a bright spot for US consumers against a tough backdrop of high interest rates and stubborn inflation which has shoppers pull back on discretionary spending in recent quarters.
Last month (21 April) sports retailer JD Sports Fashion (JD.) splashed out $1.1 billion for US rival Hibbett, paying a 21% premium for the business as it looks to strengthen its presence across the southeastern US.
