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What Analysts Project for Dick’s Sporting Goods’ Q1 Sales

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Analysts expect sales of $1.9 billion

Analysts are projecting that Dick’s Sporting Goods (DKS) will report a 3.1% growth in sales to $1.9 billion for the first quarter of fiscal 2018 as its e-commerce channel gains traction. The company has been investing in e-commerce and omnichannel capabilities, as well as enhancing its private brands. Earnings results are scheduled for May 30.

Dick’s Sporting Goods is convinced that amid stiffening competition, exclusivity and product differentiation will boost sales of its in-house brands, including Top Flite, Calia, Field & Stream, and Walter Hagen. It will be unveiling some new brands in 2018.

The company is also allocating more store space to its private brand merchandise. It reported private brand sales of ~$1 billion in 2017, and it projects to add ~$1 billion more in revenue in a shorter period of time.

It has taken a stand on gun control and stopped selling assault-style rifles. It’s also not selling firearms to customers younger than 21 years of age. That could impact its hunting category sales going forward.

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A brief recap of its Q4 performance

Dick’s sales for the fourth quarter of fiscal 2017 were $2.66 billion, which missed analysts’ estimate of $2.74 billion. On a YoY (year-over-year) basis, sales rose 7.3%, mainly driven by an extra week in the holiday quarter. Its e-commerce sales penetration grew to 19% of overall sales from 17.9% YoY.

Comps (for 13 weeks) fell 2% in the fourth quarter compared to a 5% increase YoY, dampened by a weakness in both hunting and electronics. The company cautioned that both categories would continue to be pressured in fiscal 2018 since it’s lowering their exposure.

Expectations for peers

Analysts estimate that Foot Locker (FL) could report a 2.2% decline in sales to ~$2 billion for the first quarter of fiscal 2018. An intense promotional environment, a weakness in the footwear category, and stiff competition continue to have a negative effect.

For the first quarter of fiscal 2019, analysts project Hibbett Sports (HIBB) to report sales of $276.8 million, representing a 0.4% growth YoY.

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