Dick’s Sporting Goods’ Strong Results, Outlook Offset by Inventory Concerns

Dick’s Sporting Goods (DKS) posted better-than-expected results and boosted its guidance on strong back-to-school sales and optimism about the upcoming holiday shopping season. Still, shares turned lower on concerns about the company’s inventory levels.

The sporting goods retailer reported third quarter earnings per share (EPS) of $2.75, with revenue up 0.5% to $3.06 billion. Both exceeded estimates. Comparable store sales shot up 4.2% compared to 1.9% the year before. 

CEO Lauren Hobart said Dick’s “had an excellent back-to-school season and continued to gain market share.” She added that the company believes “our differentiated product, quality service and powerful omni-channel experience will resonate well with our athletes this holiday season.”

However, CFO Navdeep Gupta noted in a transcript of the earnings call provided by AlphaSense that Dick’s inventory level increased 13% from 2023. Even so, he argued that the firm’s investment “is in some of our strongest product offerings, and we believe our inventory is clean and well-positioned as we enter the fourth quarter.”

Dick’s now sees full-year EPS of $13.65 to $13.95, versus the earlier forecast of $13.55 to $13.90. It anticipates sales of $13.2 billion to $13.3 billion, up from the previous $13.1 billion to $13.2 billion. Comparable store sales are predicted to grow 3.6% to 4.2%, compared to its earlier outlook of 2.5% to 3.5%.

Shares of Dick’s Sporting Goods were up slightly to 0.24% mid-day Tuesday, and have gained more than 40% in 2024.