Analysts expect bottom line to fall
Dick’s Sporting Goods (DKS) is slated to announce its fiscal 4Q17[1. Fiscal 4Q17 ended on February 3, 2018] results on March 13, 2018. Analysts expect the company to report a 10.1% growth in sales to $2.7 billion compared with fiscal 4Q16. But adjusted EPS (earnings per share) is expected to fall 9.1% to $1.20. Its bottom line is likely to be negatively impacted by the markdowns and ongoing investments.
On a YTD (year-to-date) basis, Dick’s Sporting Goods stock has risen 10.5%. In comparison, Hibbett Sports (HIBB) has risen 23.3%, and Foot Locker (FL) and Big 5 Sporting Goods (BGFV) have fallen 13.1% and 15.1%, respectively. The S&P 500 index has risen ~2% over the same period.
Bold stand on gun control
In a recent development, Dick’s Sporting Goods has stopped selling guns to people below the age of 21 years and has completely stopped selling assault-style rifles. The decision came on the back of the Florida school massacre last month. Walmart has also raised the age limit for buying guns. Three days ago, a 20-year-old Oregon man sued Dick’s and Walmart for raising their gun-buying age.
On February 14, 2018, a 19-year-old male opened fire inside the Marjory Stoneman Douglas High School, killing 17 people, including students and teachers. The massacre sparked massive outrage and put the spotlight on one of America’s most disturbing problems: gun control.
According to media reports, the Trump administration has mentioned the idea of arming some teachers in schools to deter shooters and take them down before law enforcement gets to the scene.
It remains to be seen how Dick’s Sporting Goods’ decision to control the sale of guns will affect its top and bottom lines going forward.
In this series, we’ll be looking at analysts’ expectations for Dick’s Sporting Goods’ sales, earnings, and margins ahead of its upcoming fiscal 4Q17 announcement. Then we’ll take stock of analysts’ ratings for the company.