Earnings Preview: DKS, FL, HIBB

There will be good news from athletic retailers reporting third-quarter earnings this week, analysts said.

Data from The NPD Group indicates there is continued momentum in athletic footwear, leading experts to predict the firms will beat expectations.

Analysts also are looking for firms to give some color on Hurricane Sandy’s impact on fourth-quarter sales, although that is believed to be minimal.

“Overall we expect most sales to be recovered as demand increases with colder weather and the holiday season,” said Susquehanna Financial analyst Christopher Svezia.

Dick’s Sporting Goods Inc.
Dick’s is expected to announce Tuesday it earned 37 cents a share in its third quarter, according to 27 analysts polled by Yahoo Finance.

Kate McShane, analyst at Citi Investment Research, said results will be driven by the retailer’s robust back-to-school season.

“[It was likely the] strongest in three years, driven by strong lightweight running and the Jordan brand, [Nike dominating] with attractive colorways, and innovation in athletic footwear,” she wrote in a research note.

Christopher Svezia, analyst at Susquehanna Financial, said top-line drivers moving forward remain athletic footwear and apparel, Under Armour and The North Face shop-in-shops, the outdoor category and new NFL product from Nike.

Foot Locker Inc.
On Friday before the market opens, analysts anticipate the New York retailer will report earnings per share of 54 cents, on revenue of $1.47 billion, as polled by Yahoo Finance.

“Strong athletic trends lead us to modestly raise estimates,” Sterne Agee analyst Sam Poser wrote in a research note. “Based on our channel checks and NPD data, we believe the momentum has continued.”

Looking to the fourth quarter, Poser added, “We expect the effect of [Hurricane] Sandy will be immaterial, at most 1 to 2 cents to EPS, [and that the firm will] benefit from the post-storm replenishment, as was the case with Katrina.”

Hibbett Sports Inc.
The Birmingham, Ala.-based retailer reports its third quarter on Friday.

Analysts are predicting EPS to come in at 68 cents, on revenue of $201.6 million, as polled by Yahoo Finance.

Poser is looking for the firm to beat expectations on the back of same-store sales for the quarter that should come in higher than the mid-single-digit rate the firm previously forecast.
“[The] outlook appears promising,” he wrote in a research note. “Cooler weather should help sales of outerwear.”

He added, “[The firm is] positioned well for the long term, due to the evolution of systems and a new distribution center [that] will support store growth beyond 1,300 stores and provide the facility for an e-commerce platform by 2015. Once the economy materially improves, and strip center development commences, we expect store growth to increase to a high-single-digit rate.”

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