DICK'S Sporting Goods, Inc. DKS posted first-quarter fiscal 2025 results, wherein the top line beat the Zacks Consensus Estimate and the bottom line matched. Both sales and earnings improved from the prior-year figures. Results underscore the momentum of its strategic initiatives and consistent execution.
Adjusted earnings per share (EPS) were $3.37, up 2% from the year-ago figure of $3.30 and matched the Zacks Consensus Estimate. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The company’s shares have lost 17% in the past three months against the industry’s growth of 6.5%.
Net sales of $3.18 billion improved 5.2% year over year and surpassed the consensus estimate of $3.12 billion. The upside was driven by robust comps and healthy transaction growth. DKS continued gaining market share from online only and omnichannel retailers.
DICK'S Sporting Goods, Inc. Price, Consensus and EPS Surprise
DICK'S Sporting Goods, Inc. Price, Consensus and EPS Surprise
DICK'S Sporting Goods, Inc. price-consensus-eps-surprise-chart | DICK'S Sporting Goods, Inc. Quote
Consolidated comps grew 4.5% year over year, backed by a 3.7% rise in average ticket and a 0.8% jump in transactions. Our model estimated comps to grow 2.1%. This reflects almost a 9.8% two-year comp stack and a 13.4% three-year comp stack.
DKS Records Higher Margins & Expenses
Gross profit rose 6.8% year over year to $1.17 billion and surpassed our estimate of $1.14 billion. Meanwhile, the gross margin expanded 41 basis points (bps) year over year to 36.7%. This growth was primarily led by increased merchandise margin.
The adjusted SG&A expense rate of 24.9% rose 40 bps year over year. Adjusted SG&A expenses, in dollar terms, grew almost 7% to $791.2 million and were higher than our estimate of $783.6 million.
DKS’ Financial Health Snapshot
DICK’S Sporting ended the fiscal first quarter with cash and cash equivalents of $1.04 billion and no outstanding borrowings under the revolving credit facility. It had a total debt of $1.5 billion as of May 3, 2025. Total inventory rose 12% year over year to $3.6 billion.
This Zacks Rank #3 (Hold) company repurchased 1.4 million shares under its share repurchase program for $299 million in the 13 weeks ended May 3, 2025. It had $212.9 million remaining under its authorization as of the same date. DKS also paid $5 million in fiscal 2025 for shares repurchased in the prior fiscal year.
It paid quarterly dividends of $100 million in the fiscal first quarter. On May 27, 2025, the company's board announced a quarterly cash dividend of $1.2125 per share on its common stock and Class B common stock. This is payable June 27, 2025, to stockholders of record as of June 13, 2025.
During the first quarter, the company introduced two House of Sport locations and four DICK'S Field House locations.
On May 15, 2025, DICK’S Sporting entered into a definitive merger agreement to buy Foot Locker, Inc., a key athletic shoe and apparel retailer, for an enterprise value of roughly $2.5 billion. The proposed merger deal highlights a key strategic milestone for DKS. This transaction is likely to be accretive to the company’s earnings per share in the first fiscal year post-close and produce $100-$125 million in cost synergies in the medium term via procurement and direct sourcing efficiencies. DICK'S Sporting will benefit from FL’s sneaker expertise and culture through its impressive portfolio of brands. This is likely to close in the second half of 2025.
What to Expect From DKS in FY25?
Management reaffirmed sales and earnings guidance for fiscal 2025, which does not include acquisition-related expenses, investment losses or results from the pending deal to acquire Foot Locker. The company is working closely with its manufacturing and brand partners to negate the potential tariff impacts and is constantly progressing in diversifying its direct sourcing and corporate. DKS inventory is positioned well at healthy levels across the major categories. The company expects to make strategic investments digitally, in-store and in marketing to aid growth over the long term.
It still projects net sales in the band of $13.6-$13.9 billion compared with $13.4 billion recorded last fiscal. The company expects comps growth of 1-3%, down from 5.2% delivered in fiscal 2024. It expects comps closer to the high end of its guided range through the fiscal third quarter.
DKS continues to envision earnings to be $13.80-$14.40 per share compared with $14.05 posted in fiscal 2024. This view reflects the anticipated impacts of the tariffs presently in effect. DICK'S Sporting expects EPS to drop year over year in the first half and increase in the second half. The adjusted EPS view assumes 81 million shares outstanding. Also, the company’s effective tax rate is expected to be around 24%.
Management forecasts the gross margin to grow year over year, which, at the midpoint, is likely to improve about 75 bps. The gross margin expansion is likely to be offset by deleveraged SG&A costs. It expects higher deleveraged SG&A costs in the first half with moderation in the second half as the company laps the increased investment levels from the second half of the prior fiscal year. Pre-opening expenses are forecast to be $65-$75 million, with roughly one-third incurred in the first half and the remaining to be incurred in the second half of the fiscal year.
DKS forecasts operating margin to be roughly 11.1% at the midpoint. At the high end of its forecast, it expects to drive nearly 10 bps of operating margin expansion.
For 2025, DKS’ capital-allocation plan has a net capital expenditure of about $ 1 billion. The company intends to open nearly 16 Field House locations this year.
Stocks to Consider
Some better-ranked stocks are Urban Outfitters URBN, Canada Goose GOOS and Genesco GCO.
Urban Outfitters, a lifestyle specialty retailer offering apparel and accessories, sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Urban Outfitters’ current financial-year’s earnings and sales implies growth of 20.9% and 8%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 29%.
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Canada Goose’s current financial-year’s earnings and sales implies growth of 10% and 2.9%, respectively, from the year-ago actuals. GOOS delivered a trailing four-quarter average earnings surprise of 57.2%.
Genesco, a branded company that sells footwear and accessories, currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for GCO’s current financial-year’s earnings and sales implies growth of 63.8% and 0.6%, respectively, from the year-ago actuals. GCO delivered a trailing four-quarter average earnings surprise of 37.2%.
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