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Dick's (DKS) Reports Earnings Tomorrow. What To Expect

StockStory - Mon Nov 20, 2023

DKS Cover Image

Sporting goods retailer Dick’s Sporting Goods (NYSE:DKS) will be reporting results tomorrow before market hours. Here's what investors should know.

Last quarter Dick's reported revenues of $3.22 billion, up 3.6% year on year, missing analyst expectations by 0.5%. It was a weak quarter for the company. Dick's revenue fell just short of expectations while its EPS and EBITDA missed analysts' estimates by a wide margin due to inventory shrinkage (due to clerical error, goods being damaged, lost, or stolen), which decreases profits.

Is Dick's buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Dick's's revenue to decline 0.5% year on year to $2.95 billion, a deceleration on the 7.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.46 per share.

Dick's Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing six downwards revisions over the last thirty days.The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 3.7%.

Looking at Dick's's peers in the apparel and footwear retail segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. TJX delivered top-line growth of 9% year on year, beating analyst estimates by 1.4% and Gap reported revenue decline of 6.7% year on year, exceeding estimates by 4.4%. TJX traded down 2.6% on the results, and Gap was up 8%.

Read our full analysis of TJX's results here and Gap's results here.

There has been positive sentiment among investors in the apparel and footwear retail segment, with the stocks up on average 8% over the last month. Dick's is up 11.9% during the same time, and is heading into the earnings with analyst price target of $130.5, compared to share price of $118.5.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.