Dick's Sporting Goods (DKS) is continuing to gain market share in a "soft industry demand environment", driven by strength in apparel, footwear, and team sports, Wedbush said in a Wednesday note reviewing the retailer's Q3 results.
"We are impressed by DKS continued comp strength driven by its investments in product, merchandising, marketing, service, technology and inventory," the investment firm said in the note.
The company posted Q3 results beating top-line estimates and "modestly" exceeding bottom-line expectations, Wedbush said. Dick's Sporting Goods reported fiscal Q3 non-GAAP earnings Tuesday of $2.75 per diluted share on revenue of $3.06 billion, compared with analyst estimates of $2.68 and $3.03 billion, respectively.
Wedbush noted that inventory investments, targeted at high-demand products and early spring inventory "modestly raise the risk profile."
The sporting goods retailer "plans to continue investing in the business (including a new DC in early 2026 that will start to drag on gross margin in 2H25), thereby dampening earnings growth prospects in 2025 even if comps remain solid," Wedbush said.
Wedbush cut its price target to $215 from $250, while maintaining a neutral rating on the stock.
Dick's Sporting shares were up 1.5% in recent trading.
Price: 215.47, Change: +3.25, Percent Change: +1.53
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