Momentum Continues for Dick’s Sporting Goods: Shares Rise After Retailer Raises Full-Year Outlook

Dick’s Sporting Goods raised its full year guidance and announced new fourth-quarter earnings expectations.

For the full year of 2021, Dick’s expects earnings per diluted share between $13.70 to $13.79, revised from a previous guidance of between $12.88 and $13.06. The company raised its non-GAAP earnings per diluted share guidance to between $15.50 and 15.60. Dick’s expects consolidated same store sales to increase between 25.8% to 26.1%, up from previous guidance of between 24% and 25%.

For the fourth quarter, Dick’s expects earnings per diluted share of between $3.00 and $3.09 and non-GAAP earnings per diluted share between $3.45 and $3.55.

Shares of Dick’s closed up 1.4% on Thursday.

Dick’s previously raised its full year outlook after another successful round of earnings in Q3. The company welcomed new CEO Lauren Hobart at the start of 2021, who has already led the retailer through three successful quarters. An ambitious brick-and-mortar expansion, record-breaking earnings results and new digital expansions all contributed to a standout year for the company, which was honored as Retailer of the Year at the 35th annual FN Achievement Awards in November.

Throughout the pandemic, Dick’s has benefited from a surge in both the outdoor and athletic categories, driven by a consumer interest in outdoor activities such as hiking. Like many major retailers, store shutdowns helped the company’s overall digital revenue grow to make up 30% of sales in 2020.

Earlier this year, Dick’s Sporting Goods opened the first locations of its new outdoor banner, dubbed Public Lands. The stores, which span around 50,000 to 60,000 square feet, include a massive footwear section with shoes for hiking, running, outdoor lifestyle and more. It also launched the experiential House of Sport concept — which features a 17,000-square-foot turf field and running track, a rock-climbing wall, batting cage, golf hitting bays and a putting green — in order to help drive foot traffic to physical stores.

In a call with investors in November, Dick’s CEO Lauren Hobart said that the company has plans to open more of these stores in 2022.

Despite the updated guidance, some analysts remained hesitant on Dick’s. Stifel, noting the positive news, gave the company a “Hold” rating.

“We remain guarded on valuation, however, considering the non-recurrence of stimulus payments, and the related potential impact to demand for big ticket items that have been important to Dick’s sales strength through pandemic,” wrote Stifel analyst Jim Duffy.

Cowen analyst John Kernan gave Dick’s an “outperform” rating and noted “improving allocations of product from Nike and Adidas.”

“Our conversations with management teams at Nike, Adidas, Yeti, Callaway, and Deckers (HOKA) have all been increasingly constructive regarding their relationships with Dick’s Sporting Goods — which we take as a sign Dick’s is scaling beyond its peers across sporting goods,” Kernan said.

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