Dicks Sporting Goods (DKS) Stock Down as Retail Sector Struggles

Dicks Sporting Goods (DKS) stock is falling as the retail sector declines today.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- Shares of Dicks Sporting Goods (DKS) - Get Report are falling by 3.95% to $41.09 in midday trading on Friday, as the retail sector takes a hit due to the weaker than expected U.S. sales data released today.

Based in Pittsburgh, the company is an athletic apparel and accessories retailer. Dicks also provides exercise equipment and professional sports team merchandise.

U.S. retail sales grew by 0.1% in October, missing the 0.3% increase economists had been expecting, Reuters reports.

Retail sales excluding automobiles, gasoline, building materials and food services were up by 0.2% last month versus a 0.1% rise in September.

Retailer stocks are still feeling some pressure from Macy's (M) disappointing sales results, which were reported earlier this week.

Additionally, Dicks Sporting Goods will report its 2015 third quarter earnings results before the market open on Tuesday morning.

The company has been forecast by analysts surveyed by Thomson Reuters to report earnings of 46 cents per share on revenue of $1.64 billion for the three month period ended in October. Dicks Sporting Goods' earnings came in at 41 cents per diluted share on net sales of $1.5 billion for the 2014 third quarter.

Separately, TheStreet Ratings team rates DICKS SPORTING GOODS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate DICKS SPORTING GOODS INC (DKS) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DICKS SPORTING GOODS INC has improved earnings per share by 35.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DICKS SPORTING GOODS INC increased its bottom line by earning $2.85 versus $2.70 in the prior year. This year, the market expects an improvement in earnings ($3.20 versus $2.85).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Specialty Retail industry average. The net income increased by 30.8% when compared to the same quarter one year prior, rising from $69.47 million to $90.84 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 7.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $167.53 million or 21.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.88%.
  • You can view the full analysis from the report here: DKS

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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