Dick's Sporting Goods Stock Makes New High on 27% Higher 4Q Net

Shares of Dick's Sporting Goods Inc. (DKS: Charts, News) closed up +1.32 or +2.90 percent to $46.89 per share on Tuesday, after the company reported its fourth quarter earnings had risen 27 percent over the same period last year. The Pittsburgh, PA based retailer of sports equipment posted consolidated net income for the fourth quarter of $111.1 million, with diluted earnings per share of $0.88, versus net income of $87.5 million in the fourth quarter of 2010.

The results were in part due to recent store openings and in line with analyst expectations of $0.88 per share, according to a survey of 20 analysts by Zack's Investment Research. The company earned $253.9 million or $2.02 per diluted share in yearly non-GAAP operating income which represented an increase of 39.4 percent from the $182.1 million reported for the year ending in January of 2011.

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Dick's Sporting Goods, Inc. also reported net sales of $1.6 billion for the quarter the ended on January 31st, 2012. This represented a growth in sales of 6.1 percent compared to the net sales results for the fourth quarter of 2010.

Dick's Sporting Goods Inc. has been in business since 1948 and is a Fortune 500 U.S. company. With the addition of six new stores, the sports retailer now operates 480 stores in 43 states with approximately 26.3 million square feet of shopping space. Dick's also owns and operates Golf Galaxy Inc. a sports retailer specializing in golf, which operates 81 stores with 1.3 million square feet in 30 states.

In addition to the sports and golf retail stores, the company also owns and operates a number of commercial websites and markets a wide variety of brands and catalogs through its online presence. While in house sales fell by 2.5 percent for the Dick's Sporting Goods Stores, in house sales were up by 9 percent for its Golf Galaxy retail outlets, netting the company a one percent gain.

Dick's Sporting Goods forecast its first quarter 2012 profit to be $0.36 to $0.38 per share, which was at the high end of analyst estimates of $0.36 per share. The company forecast full year 2012 earnings to come in at $2.38 per share to $2.41 per share, in line with analyst expectations of $2.40 per share.

Edward W. Stack, Chairman and CEO of the company stated that, "In the fourth quarter, we generated record earnings, maintained an exceptionally strong balance sheet with our cash balance growing $188 million, initiated our first ever dividend, and announced a 12-month share repurchase program," he continued, "In 2012, we will continue to build on our momentum as we profitably grow the business with earnings expected to increase approximately 18 to 19%, while simultaneously investing in key strategic areas including new stores, eCommerce, inventory management systems and private brands."

With a hint of an economic recovery, retailers stand to do well as more consumers begin spending money. Dick's Sporting Goods Inc. represents a solid specialty retailer with a stock that now will pay a dividend and trades at 23 times earnings. While some profit taking may take place in the short term, the stock could see considerable upside if it holds above its new 52 week high.

Other News About DKS
Dick's Sporting Goods' CEO Discusses Q4 2011 Results
Edward W. Stack discusses the company's future prospects with analysts.
Dick's Sporting Goods 4Q Net Up 27% On New Store Growth
WSJ article on earnings and new stores. Other Stocks in the News
Apple price target raised to $710-share at BarCap
Barclay's Capital raises its estimate for Apple Inc. shares from $630 to $710 per share.
Intel launches high-end server chip for the cloud
Company introduces new Xeon server chip.

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Published on Mar 7, 2012
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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