DICK’S Sporting Goods Scores 19.2% Increase in Same Store Sales in Q2; Raises FY21 Earnings Guidance

Source: Streetwise Reports   08/25/2021

DICK’S Sporting Goods shares traded nearly 14% higher and climbed to a new 52-week high after the largest U.S.-based, full-line sporting goods retailer reported record quarterly sales and earnings in Q2/21 and boosted its dividend and share repurchases.

Omni-channel sporting goods retailer Dick’s Sporting Goods (DKS:NYSE), today announced financial results for the second quarter of 2021 ended July 31, 2021.

The company reported that net sales in Q2/21 increased by 20.7% to $3.275 billion, compared to $2.713 billion in Q2/20 and were 45% higher than the $2.259 billion it registered in Q2/19. The firm noted that in Q2/21 consolidated same store sales increased by 19.2% year-over-year.

DICK’S Sporting Goods advised that it benefited significantly from strong sales and gross margin rate expansion in Q2/21. As a result, the company earned $495.5 million, or $4.53 per diluted share in consolidated net income during Q2/21, compared to $276.8 million, or $3.12 per diluted share in Q2/20 and $112.5 million, or $1.26 per diluted share in Q2/19.

The company advised that on a non-GAAP basis, it posted consolidated net income in Q2/21 of $501.2 million, or $5.08 per diluted share, compared to $281.7 million, or $3.21 per diluted share in Q2/20.

DICK’S Sporting Goods’ Executive Chairman Ed Stack stated, “We said 2021 was going to be the most transformational year in our history, and so far, it certainly has been. We continue to perform at a very high level and invest in our future to reimagine the athlete experience in our core business and with new concepts…I am very pleased with the strength of our business and confident about our growth opportunities.”

The company’s President and CEO Lauren Hobart commented, “Our record-breaking quarterly sales and earnings significantly exceeded our expectations, reflecting continued strong consumer demand across our diverse category portfolio along with the strength of our omni-channel offering and elevated athlete experience…Based on the strength of our business and our expectations for continued strong consumer demand, we are pleased to increase our full year sales and earnings outlook for the second time this year.”

The firm noted that it ended Q2/21 with about $2.24 billion in cash and cash equivalents on its balance sheet and had no balance outstanding on its $1.855 billion credit line. The company mentioned that inventory levels as of July 31, 2021 had increased by 7.2% versus the end of Q2/20 but did not provide specific details for the reason.

DICK’s added that in H1/21, net sales totaled $6.194 billion, which represents a 53% increase compared to the $4.047 billion in net sales achieved during H1/20.

The company advised that in H1/21 it had consolidated net income of $857.3 million, or $7.96 per diluted share, compared to $133.4 million, or $1.53 per diluted share in H1/20.

DICK’s mentioned that it recently announced several measures designed to enhance its 2021 capital allocation plan. The company advised that it is increasing its quarterly dividend by 21% to $0.4375 per share and in addition plans to pay a special dividend of $5.50 per share on September 24, 2021 to shareholders of record as of September 10, 2021.The firm stated that it also plans to repurchase a minimum of $400 million of its common shares in 2021.

CEO Hobart remarked, “This additional cash return to our shareholders demonstrates the confidence we have in our business, the strength of our balance sheet and a commitment to efficiently deploy our cash…We continue to remain firmly committed to investing in the profitable growth of our core business.”

The company provided some forward guidance and indicated that it expects that net sales for FY/21 will be between $11.52-11.72 billion, which would represent an increase of 21% compared FY/20 and a 33% increase over FY/19. The company additionally listed that it anticipates that consolidated same store sales will increase by 18-20% in FY/21.

DICK’S advised that it has raised its FY/21 earnings per diluted share guidance to $11.00-11.45 and raised its FY/21 non-GAAP earnings per diluted share guidance to $12.45-12.95.

DICK’S Sporting Goods is a leading U.S. sporting goods retailer based in Pittsburgh, Pa. The company offers a complete line of sporting goods and equipment, apparel, footwear and accessories. The firm listed that it owns and operates 731 DICK’S Sporting Goods locations throughout the U.S. In addition, the company owns and operates Golf Galaxy and Field & Stream specialty stores and GameChanger, which it stated is “a youth sports mobile app for scheduling, communications, live scorekeeping and video streaming.”

DICK’S Sporting Goods began the day with a market cap of around $10.2 billion with approximately 89.3 million shares outstanding and a short interest of about 10.0%. DKS opened more than 14% higher today at $130.75 (+$16.36, +14.30%) over yesterday’s $114.39 closing price and reached a new 52-week high price this morning of $134.80. The stock traded today between $128.80 and 134.80 per share and closed at $129.60 (+$15.21, +13.30%).

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