Dick’s Sporting Goods (NYSE 🙂 has been on an upward track for the past two years. The company’s latest earnings report reveals why. Beats in both revenue and earnings yesterday gave stocks a nearly five percent boost in premarket trading.
Dick sporting goods offer a wide range of sports and sporting equipment, from golf clubs to training clothes. The company’s share price has doubled over last year. (Check out Dick’s Sporting Articles stock charts at TipRanks)
The company earned adjusted earnings per share of $ 5.08 per share compared to Refinitiv’s consensus figure of $ 2.80. It also grossed $ 3.272 billion compared to the expected $ 2.858 billion.
Net income for the second quarter increased nearly 80% from the same period last year, to $ 495.5 million or about $ 4.53 per share. Last year’s figures reached $ 276.8 million, about $ 3.12 per share. The company was also successful compared to pre-pandemic figures, with sales in the second quarter of 2021 45% higher than in the second quarter of 2019.
In addition, the company announced plans to increase capital spending. These plans include a 21% increase in the quarterly dividend and a special dividend of $ 5.50 per share. The company also announced plans to double its share repurchase program. This measure makes the total available for repurchase at least $ 400 million.
Take Street from Wall Street
Consensus on Wall Street analysts considers Dick’s Sporting Goods a “moderate buy.” The company currently has 16 analysts covering it, with seven calling it “Buy”, nine calling it “Hold” and one calling it “Sell”.
Price targets run in a wide range. Currently, the average price of Dick’s sporting goods is $ 115.73 per share, with a high target of $ 150 and a low of $ 88. The company closed at $ 129.60 yesterday, suggesting a 10.7% disadvantage.
He goes without a gun
In late 2019, following the shooting of Marjory Douglas Stoneman High in Florida, Dick’s Sporting Goods decided it would no longer sell firearms and ammunition in its stores. Previously, the company enjoyed a boost from the hunting market. Many considered making this market look like leaving money on the table.
Using the last two years of steadily rising stock prices as a guide, the company’s decision to give up one market allowed it to raise others. The company’s customer base appears to be responding positively and offsetting arms and ammunition sales losses with a wide range of sales increases elsewhere.
Dick’s sporting goods are certainly experiencing improvements thanks to the reopening of the United States. However, the rise of new coronavirus variants may put this development at risk. In addition, already positive sales can hurt future sales. Customers’ interest in buying more equipment after buying it may decrease.
Still, with two years of near-continuous gains on its side, improved dividends and plans to raise stock prices through an improved repurchase strategy, Dick’s Sporting Goods shares represent an attractive buy, even at these levels. of prices.
Disclosure: At the time of publication, Steve Anderson had no position in any of the values mentioned in this article.
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