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More Growth In Dick's Sporting Goods' Future

Some excellent results were delivered by one of my oldest holdings, Dicks Sporting Goods (DKS) this morning. DKS reported non-GAAP diluted EPS of 32 cents versus 22 cents a year ago and expectations of 26 cents. Same store sales rose 4.1% and total sales rose 9.3% year-over-year to $1.18 billion. Analysts expected net sales of $1.16 billion in the 3rd quarter.

For FY2011 the company increased guidance by 7 cents for non-GAAP EPS to a new range of $2.01 to $2.03. An additional penny was added to 4th quarter guidance for a range of 87 to 89 cents versus consensus estimates of 87 cents. Toward the end of the 3rd quarter and in early 4th quarter DKS opened several new stores which are not in the current quarter’s results but point to strong forward growth. A total of 25 new stores were opened in the second half of 2011 bringing the total store count to 474 Dick's Sporting Goods stores in 42 states and 81 Golf Galaxy stores in 30 states. As I mentioned, there is still plenty of room for growth at Dick’s.

In what was a bonus announcement for shareholders, Dick’s Sporting Goods’ board of directors declared an annual dividend of 50 cents payable on December 28 for shareholders of record on December 7. In the future, the company intends on paying dividends on a quarterly basis. At the 50 cent payout, the yield is 1.26% based on yesterday’s closing price. However, it appears that Dick’s Sporting Goods stock will open about 5% higher in trading today.

As I mentioned, Dick’s Sporting Goods is one of my oldest holdings. I still own stock from the IPO for several clients having bought more stock on the opening day in the secondary market and for new clients thereafter. I like the company’s business model, strategy, management team and balance sheet. A year from now I have a preliminary price target in the range of $50 to $52.50

Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC was long DKS stock — although positions can change at any time.

Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant and agricultural stocks. You can subscribe at www.restaurantstox.com 

You can access more daily commentary from Scott Rothbort, on Wall Street All-Stars.



Posted By Scott Rothbort at November 15, 2011
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Scott Rothbort

About Me :

SCOTT ROTHBORT

THE FINANCE PROFESSOR

 

Scott Rothbort has over 20 years of experience in the financial services industry. In 2002, Rothbort founded LakeView Asset Management, LLC, a registered investment advisor based in Millburn, N.J., which offers customized individually managed separate accounts, including proprietary long/short strategies to its high net worth clientele. He also is the founder and manager of the social networking educational website TheFinanceProfessor.com and a frequent contributor the TheStreet.com where he also writes a weekly article as The Finance Professor

Immediately prior to that, Rothbort worked at Merrill Lynch for 10 years, where he was instrumental in building the global equity derivative business and managed the global equity swap business from its inception. Rothbort previously held international assignments in Tokyo, Hong Kong and London while working for Morgan Stanley and County NatWest Securities.

Rothbort holds an MBA in finance and international business from the Stern School of Business of New York University and a BS in economics and accounting from the Wharton School of Business of the University of Pennsylvania. He is a Term Professor of Finance and the Chief Market Strategist for the Stillman School of Business of Seton Hall University.

For more information about Scott Rothbort and LakeView Asset Management, LLC, visit the company's Web site at www.lakeviewasset.com.

 


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