DA Davidson has revised its price target for Dick’s Sporting Goods (DKS, Financial), reducing it to $230 from the previous $273, although the firm continues to uphold a Buy rating on the stock. The company's first-quarter performance was considered "strong," aligning with recent pre-announcements and surpassing initial forecasts, signaling a positive outlook. Despite these results, the firm highlights that the market still undervalues the stock. The decline linked to the Foot Locker acquisition is seen as a strategic buying opportunity. However, to account for reduced retail valuations and potential risks associated with the deal, the firm has adjusted its earnings multiple assumption from 18-times to 15-times.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Dick's Sporting Goods Inc (DKS, Financial) is $214.38 with a high estimate of $270.00 and a low estimate of $157.21. The average target implies an upside of 21.04% from the current price of $177.12. More detailed estimate data can be found on the Dick's Sporting Goods Inc (DKS) Forecast page.
Based on the consensus recommendation from 27 brokerage firms, Dick's Sporting Goods Inc's (DKS, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Dick's Sporting Goods Inc (DKS, Financial) in one year is $183.82, suggesting a upside of 3.78% from the current price of $177.12. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Dick's Sporting Goods Inc (DKS) Summary page.
DKS Key Business Developments
Release Date: May 28, 2025
- Revenue: Consolidated sales increased 5.2% to $3.17 billion.
- Same-Store Sales (Comps): Increased 4.5%, marking the fifth straight quarter of over 4% comp growth.
- Gross Margin: Expanded over 40 basis points to 36.7% of net sales.
- Net Income (Non-GAAP EPS): $3.37 per diluted share, a 2.1% increase from last year.
- Operating Income (Non-GAAP): $360.4 million or 11.35% of net sales.
- SG&A Expenses: Increased 7% to $791.2 million, deleveraging 42 basis points.
- Preopening Expenses: $13.4 million, a decrease of $7.7 million from the prior year.
- Cash and Cash Equivalents: Approximately $1 billion with no borrowings on the $1.6 billion unsecured credit facility.
- Inventory Levels: Increased 12% compared to Q1 of last year.
- Share Repurchase: 1.4 million shares repurchased for $298.7 million at an average price of $218.65.
- Store Openings: Opened two House of Sport locations and four Field House locations in Q1.
- Guidance for 2025: Comp sales growth expected in the range of 1% to 3%; EPS expected to be in the range of $13.80 to $14.40.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dick's Sporting Goods Inc (DKS, Financial) reported a strong start to the year with a 4.5% increase in comparable sales for the first quarter of 2025.
- The company announced plans to acquire Foot Locker, which is expected to be accretive to DKS's earnings per share in the first full fiscal year post-close.
- DKS saw growth in both average ticket and transactions, with more athletes purchasing more frequently and spending more per trip.
- The company's e-commerce business continues to grow significantly, outpacing total company growth, driven by investments in technology and marketing.
- DKS's GameChanger and DICK'S Media Network are delivering strong profitable growth, with GameChanger having over 6.5 million unique active users in the first quarter.
Negative Points
- DKS is operating in an increasingly complex macroeconomic environment, shaped by shifting trade policies and a more cautious consumer mindset.
- The company expects SG&A expenses to deleverage due to strategic investments in digital, in-store, and marketing initiatives.
- DKS's inventory levels increased by 12% compared to the previous year, which could pose a risk if consumer demand does not meet expectations.
- The acquisition of Foot Locker may face challenges, as some shareholders prefer DKS to focus on its current operations rather than expanding through acquisitions.
- There is uncertainty regarding the impact of tariffs on DKS's business, although the company has factored known tariffs into its guidance.
