We have retained our Neutral stance on full-line sporting
Dick's Sporting Goods Inc.
), based on the company's strong quarterly performance, robust
outlook and strategic growth initiatives. However, the company
remains vulnerable to the sluggish economic recovery and weak
consumer spending environment.
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Dick's Sporting's unique strategy of offering exclusive branded
merchandise, sourced from leading manufacturers, provides it with
an edge over cut-throat competition in the specialty retailing
Furthermore, the company leverages its strong vendor
relationships to source overstock and closeout merchandise at
substantial discounts, in order to achieve dual objectives of
boosting gross margin while offering compelling value to
We remain impressed by the company's growth initiatives, which
include expanding its store base and bringing in technological
advancements to better serve its patrons. The company leverages
an extensive network of stores to effectively penetrate into its
target markets, which in turn, enables it to generate healthy
sales and gain market share. Further, Dick's Sporting remains
focused on enriching the shopping experience of its customers.
Dick's Sporting reported strong fourth-quarter fiscal 2012
results with earnings and net sales surging 17% and 12% to $1.03
per share and $1,805.3 million, respectively. The company's
quarterly results primarily benefited from new store openings
along with enhanced e-Commerce capabilities and improved margins.
Looking ahead, Dick's Sporting currently expects fiscal 2013
earnings in the range of $2.84 - $2.86 per share, up 12.3% -
13.0% from $2.53 earned in fiscal 2012. Moreover, the company
anticipates positive comps in the range of 2% - 3% in fiscal
On the flip side, this Zacks Rank #3 (Hold) company remains
vulnerable to the sluggish economic recovery and cautious
consumer spending. Moreover, risk of sourcing merchandise from
overseas markets may hamper Dick's Sporting's performance.
Other Stocks to Consider
Besides Dick's Sporting, other stocks to consider in the
specialty retail sector are
Big 5 Sporting Goods Inc.
Hot Topic Inc.
). Of these stocks, Cabela's and Big 5 carry a Zacks Rank #1
(Strong Buy), while Hot Topic has a Zacks Rank #2 (Buy).