Outdoor financials: Analysts expect strong results from Dick’s report

Analysts expect strong results from Dick’s report

Buoyed by strong seasonal apparel sales as a result of a cold, snowy winter, as well as new revenue growth from expansion into the Pacific Northwest, analysts expect Dick’s Sporting Goods (NYSE: DKS) to achieve a profit of $0.55 a share on $1.29 billion in revenue. On the eve of its earnings release, numerous analysts are recommending buying or holding stock in the company.

The company has given investors reason to expect good news. In January, Dick’s reported an increase in sales expectations after the 2009 holiday season saw same-store sales grow about 2 percent after earlier expectations were for sales to decline.

Dick’s revised its earnings guidance for the fourth quarter to at least $0.54 per share, up from $0.41 to $0.46 per share the company previously estimated in November.

For fiscal year 2009, Sam Poser, a senior research analyst who follows the company for New York-based Sterne Agee, recommended to clients in a research note that they buy Dick’s stock. His price target is $26 a share.

“I think they’re going to have a pretty good quarter,” he wrote. “I think their same- store sales are going to be higher than most of the stores in the malls because consumers are shopping more for convenience.”

Poser expects Dick’s will see strong benefits from its expansion into the Pacific Northwest where it acquired the stores of a couple small region chains and has minimal competition. He also noted that the company should realize earnings growth in 2010 without renewed growth in still-weak consumer spending.

–Compiled by Wendy Geister

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