Dick's Sporting Goods' sales unexpectedly surged during its crucial holiday quarter, and earnings exceeded market expectations. However, the athletic goods retailer offered a cautious forecast for fiscal 2025, reflecting the challenges posed by a 'dynamic' macroeconomic environment. For fiscal 2025, earnings are projected to fall between $13.80 and $14.40 a share, slightly below the current consensus on FactSet which stands at $14.82.
In the fiscal year ending on February 1, the company's earnings advanced by 15% year over year, reaching $14.05 per share. Following this report, the stock experienced a dip of 3.4% during Tuesday's trading session. The company anticipates sales to fall within a range of $13.6 billion to $13.9 billion, with comparable sales expected to rise between 1% to 3% for the ongoing fiscal year.
The Street is predicting sales of $13.91 billion along with a 2.5% growth in same-store sales. In fiscal 2024, Dick's Sporting Goods recorded a 3.5% increase in sales, totaling $13.44 billion, with comparable sales rising by 5.2%. Chief Executive Lauren Hobart expressed a mixed outlook stating, 'Our outlook reflects strong confidence in our strategies and operational strength while acknowledging the dynamic macroeconomic environment.' With this duality in mind, Hobart emphasized expectations for continued growth in comparable sales, alongside strategic expansion in square footage and improvements in gross margin. In a note issued to clients, Truist Securities highlighted the retailer's prudent approach, advising a conservative outlook due to uncertainties about consumer willingness to spend on discretionary items.
Nevertheless, the brokerage maintains a bullish stance regarding the company’s potential to capture market share in the athletic apparel and footwear sectors. The fiscal fourth quarter saw adjusted earnings of $3.62 a share, a decrease from $3.85 the previous year yet surpassing the average analyst estimate of $3.52.
Sales saw a slight increase to $3.89 billion from $3.88 billion last year, going against the Street's anticipated decline to $3.78 billion. Comparable sales surged by 6.4%, outpacing the anticipated 3.1% increase forecasted by analysts, bolstered by a 4.4% rise in average ticket size and a 2% growth in the number of transactions.
Chief Financial Officer Navdeep Gupta noted, 'This was the largest sales quarter in the history of our company.' Gross profit as a percentage of sales rose by 39 basis points year over year, largely due to lower shipping costs and improved merchandise margins. Gupta also reported an increase in selling, general, and administrative expenses, which climbed to $963.6 million from $956.7 million the previous year.
As of early February, net inventories were recorded at $3.35 billion, an increase from $2.85 billion the prior year. Price: 209.90, Change: -1.12, Percent Change: -0.53.