RESEARCH SUMMARY DICKS SPORTING GOODS INC - ALPHASTREET
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AlphaStreet
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Research Summary
Dicks Sporting Goods Inc.
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TABLE OF
CONTENTS
03 04
Overview Key Financial Highlights for 3Q21
Industry Analysis
05 06
Outlook SWOT Analysis
07 08
Excerpts from Earnings Call Strategic Drivers
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Dicks Sporting Goods Inc. NYSE: DKS
DICK'S Sporting Goods, Inc. (NYSE: DKS)is an omni-channel sporting goods retailer that offers a
range of sports equipment, apparel, footwear and accessories. The company is headquartered in
Pennsylvania and had a total of 866 stores in operation as of the end of its most recent quarter. It
also owns and operates Golf Galaxy and Field & Stream specialty stores as well as GameChanger, a
youth sports mobile app.
C-Level Executives
Edward W. Stack, Executive Chairman
Lauren R. Hobart, President & Chief Executive Officer
Navdeep Gupta, Executive Vice President – Chief Financial Officer
Industry Analysis
The sports goods industry benefited from a rise in demand for sporting goods, athletic apparel and
related products during the pandemic due to an increased interest in health and fitness as well as
outdoor activities. Some of these trends are likely to continue. According to a report by WBOC, the
sporting goods market is estimated to reach $60.8 billion by 2026.
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Dicks Sporting Goods Inc.
Key Financial Highlights 3Q21
$2.75 billion 12.2%
Net sales increased nearly 14% year-over- Consolidated same store sales increased
year to $2.75 billion 12.2%.
$3.19 $1.05 billion
Adjusted EPS totaled $3.19 Gross profit rose 25% to $1.05 billion
Our strong comps were driven by growth across each of our three primary
categories of hardlines, apparel and footwear, as well as an 8.5% increase in
transaction and a 3.7% increase in average ticket.
- Navdeep Gupta, EVP & CFO
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Dicks Sporting Goods Inc.
Outlook
Quarterly Earnings Forecast (Consensus EPS Forecast)
$3.79
$2.75 $2.63 $2.74
$2.02
Jan 2022 Apr 2022 July 2022 Oct 2022 Jan 2023
Looking ahead, we will continue to invest in the
profitable growth of our business, while maintaining
an appropriate level of cash on the balance sheet.
Returning capital to shareholders will also continue
to be an important component of our capital
Navdeep Gupta, allocation strategy.
Executive Vice
President & CFO
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Dicks Sporting Goods Inc.
SWOT Analysis
Strength Weakness
Strong distribution network Operates in a highly fragmented market.
Strong operating cash flow
Business depends on discretionary
spending
Opportunities Threat
Increasing ecommerce penetration and Supply chain disruptions could impact sales.
omni-channel capabilities can help drive
growth.
Seasonal impacts such as bad weather in
certain markets could affect performance
Has opportunities to expand into new
markets
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Dicks Sporting Goods Inc.
Excerpts from the conference call
• In reply to a question on gross margin, CEO Lauren Hobart said
The company sells products
gross margin improvements were the result of a differentiated
merchandise assortment which the company has put in place under three primary categories
over the past years. She added that the company had long-term
Hardlines
confidence in its margin.
Apparel
• Answering a question on the initial plans for the topline in Footwear
2022, CFO Navdeep Gupta said that while it is too early to give
an outlook, the company has seen gains throughout 2021 in key
categories like apparel and footwear and it has also gained
share consistently which gives it confidence going into next year.
• Replying to a question on EBIT margins, CFO Navdeep Gupta
said that the digital and analytics capabilities that the company
has built over the past few years are expected to yield benefits
in the areas of pricing and promotion optimization as well as
clearance margin management. These, combined with the
profitability of the ecommerce business, are expected to elevate
overall profitability going forward.
• Responding to a question on growth investments, CEO Lauren
Roche
Hobart said the company continues to invest in its store
Johnson & Johnson
footprint, in technology as well as all aspects of its entire
omnichannel system.
Merck
Stephen Kaufer - President & CEO
Pfizer
• Replying to a question on pandemic-related momentum in
categories, CEO Lauren Hobart said that categories like kayaks,
bikes and fitness that surged during the pandemic have
meaningfully rebaselined versus the pre-pandemic levels. Team
sports have come back strong and the other categories are
significantly higher than they were two years ago.
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2021 AlphaStreet, Inc. All rights reserved.Dicks Sporting Goods Inc.
Strategic Drivers
Strong growth in ecommerce sales. Ecommerce sales increased 97% in the third quarter of
2021.
Gross margin expansion.
Comparable sales growth across all categories driven by increases in transactions and
average ticket.
Major Stockholders
Fidelity Management & Research Co. LLC
The Vanguard Group, Inc.
BlackRock Fund Advisors
Atreides Management LP
LSV Asset Management
Dimensional Fund Advisors LP
SSgA Funds Management, Inc.
Goldman Sachs Asset Management LP
Arrowstreet Capital LP
Gilder, Gagnon, Howe & Co. LLC
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