Earnings Preview: Dick's Sporting Goods

Dick's Sporting Goods (DKS) is expected to report Q4 earnings Tuesday with a conference call scheduled for 10:00 a.m. ET.

Guidance

Analysts are looking for a profit of 60c on revenue of $1.19B. The consensus range is 59c to 62c for EPS, and revenue of $1.12B to $1.27B, according to First Call. The company sees Q4 EPS of at least 60c to 61c, above previously-provided guidance of 59c, and expects to "at least meet" Q4 same store sales guidance of up 2.0% to up 2.5%.

Analyst Views

Wedbush Morgan believes that Dick's represents a strong opportunity over the long-term. While the firm is concerned about current consumer weakness, which reduces its near-term optimism, the firm feels that Dick's strong management and exceptional merchandising leave it in a better position to weather the storm than most other consumer companies. Shares may come under pressure in the near-term if the company guidance below consensus estimates. Given the difficult comp comparisons in Q1 and "especially Q2," Wedbush is looking for negative comps for the first half of 2008 and positive comps in the second half as comparisons ease. The mid-year introduction of new cross-training lines from Nike (NKE) and Under Armour (UA) could help boost sales in the coming quarters.

Further, Susquehanna analysts believe Dick's fundamentals remain strong and expect positive 2008 SSS and earnings growth in the mid-teens, they also see a potential slowdown in consumer discretionary spending in 2008, especially in "big ticket sporting goods" such as golf, camping and exercise equipment, all of which happen to be be an important part of Dick's merchandise mix. As a result, the firm said Dick's could feel substantial earnings pressure in the near-term, and would recommend that investors wait for a more attractive price level to begin accumulating shares of Dick's.

Next event: Dick's Sporting Goods will present on March 12 at the Banc of America Securites Consumer Conference at 9:40 am ET.

Comments

[Richard Shi...:]

Can't think of another store that is more "discretionary" thank Dicks. Short candidate? Puts anyone?

2008 Mar 10 12:15 AM