What To Expect When Dick’s Sporting Goods Reports Q4

dick's store
Dick's Sporting Goods.
Courtesy photo.

Sporting-goods industry leader Dick’s Sporting Goods Inc. has been a hot topic lately as analysts and insiders set high expectations for the firm on the heels of competitor Sports Authority’s financial challenges.

Sports Authority officially filed for Chapter 11 bankruptcy protection last week, and although it will take a while for the struggling firm to shutter approximately 140 stores, Dick’s is expected to nab many of the company’s former customers.

Meanwhile, analysts continue to be bullish overall on the firm but expect that some external variables may have weighed on earnings in the fourth quarter, which Dick’s will report on March 8. Consensus estimates predict Q4 revenues of $2.28 billion and diluted earnings per share of $1.15.

“Management’s 4Q guidance assumed a [1 percent to 2 percent] comp [decline] and [EPS in the range of] $1.10 to $1.25, a broad range given uncertainty around weather and the quarter,” Susquehanna Financial Group LLLP analyst Christopher Svezia wrote on March 3. “We believe 4Q played out largely as expected though we estimate earnings at the lower end ($1.15), as Dick’s likely worked to limit inventory and margin risk by working with vendors in underperforming categories.”

Svezia added, “We see golf, athletic apparel and footwear as positive, offset by weakness in seasonal categories.”

Meanwhile, Citi Research analyst Kate McShane placed her EPS bet above consensus, at $1.19, and expects flat comps, compared with the consensus forecast for a decline.

We believe strength in footwear should have helped offset a portion of weather related weakness but think the long-term potential for tailwind from Sports Authority could also provide support for the stock if weather has a larger than expected transitory effect,” McShane wrote in a March 2 note.

When Dick’s reported Q3, on Nov. 17, the company posted diluted EPS of 45 cents, missing Wall Street’s average bet for 47 cents per share. Meanwhile, its profits decreased 4.1 percent year-over-year, to $47.2 million. Q3 revenue, however, gained 7.6 percent to $1.6 billion.

On Monday, Dick’s stock closed the trading day up 1.42 percent, to $44.34.