Tuesday, November 16, 2010

Dicks Sporting Goods Jumps on Strong Earnings

Dicks Sporting Goods (DKS) remains one of the best retailers around. As they continue to expand their US footprint they can market share and have become the 80lb gorilla in the sporting goods sector. Heck, I'm a big investor in DKS, but I still can't even shop at their stores other then Golf Galaxy.

DKS reported Q3 earnings of $.22 that beat estimates of $.17 and above the $.16 from last year. Same store sales jumped by 5%. Much better then the 1-2% they forecast showing that management continues to UPOD (under promise, over deliver).

DKS also guided up for the full year and Q4 stating that they expect strong demand in Q4. The top retailers continue to perform in evident ignorance that the economy is suppose to be weak. Apparently though, good retailers aren't short of shoppers.

DKS will remain a core holding of all the Opportunistic Portfolios (Long only, Levered, Hedged - more to come on name changes).


Via PR:


-- Consolidated non-GAAP earnings per diluted share increased by 38% to $0.22 in the third quarter of 2010 from $0.16 consolidated earnings per diluted share in the third quarter of 2009 
-- Consolidated same store sales increased 5.1%, better than the previously estimated increase of 1 to 2% 
-- Full year estimates raised to $1.56 - 1.58 to reflect anticipated consolidated non-GAAP earnings per diluted share growth of 30 to 32% from 2009 consolidated non-GAAP earnings per diluted share of $1.20 


"We are encouraged by our third quarter performance and our continued progress in driving profitable growth.  As a result, we have raised our earnings expectations for the fourth quarter and full year 2010," saidEdward W. Stack, Chairman and CEO. "We are also increasingly optimistic about our future growth opportunities, including the potential to more than double our network of Dick's Sporting Goods stores and to fuel the growth of our Golf Galaxy and e-commerce businesses, while continuing to drive margin expansion and deliver long-term shareholder value."

Vis Briefing.com

11:02AM Dick's Sporting Goods Q3 conf call summary (DKS) : Co expects top-line growth to be enhanced by e-commence business, which is expected to growth significantly faster than traditional business. Although e-commence is profitable, it does not currently have a meaningful impact on sales or earnings. Co had a good golf quarter and expects to be pleased with the golf business going forward. Co expects to open 5 Golf Galaxy units next year. Gun & ammunition business is still "a bit difficult". Footwear business continues to be good. Co "would anticipate that we are taking market share", but is unsure which competitor it is taking it from... Co is very pleased with back-to-school results... For Q4, co expects gross margin expected to increase and SG&A to decline as % of sales, YoY... Right now, co feels the appropriate course of action is to let their cash balance built up a bit... Co did not see any serious inflation pressures. 

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