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Dick's Posts Stronger-Than Expected Earnings, Names New CEO

Dick's Sporting Goods shares rose after the retailer reported stronger-than-expected earnings and named a new chief executive.
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Dick's Sporting Goods  (DKS)  shares rose on Tuesday after the retailer reported stronger-than-expected earnings and named a new chief executive.

The stock recently traded little changed at $58.86. It has jumped 18% since Nov. 13, as its sales have boomed amid the coronavirus pandemic. 

The rise of in-home and outdoor fitness activity has driven the trend.

In the fiscal third quarter ended Oct. 31, profit totaled $177.2 million, or $1.84 a share, triple the $57.6 million, or 66 cents, of the year-earlier quarter. 

Adjusted earnings per share totaled $2.01 in the latest quarter, crushing the FactSet-survey-derived analyst consensus of $1.08.

Sales soared 23% to $2.41 billion from $1.96 billion. The latest figure beat the FactSet analyst consensus of $2.24 billion.

Same-store sales jumped 23.2% in the latest quarter, besting the analyst consensus of 13%. Digital sales skyrocketed 95%, constituting 21% of total sales.

"Overall, the favorable trends in our business have continued into the fourth quarter," Chief Executive Edward Stack said in a statement. 

"These strong sales results have been partially offset by warmer weather that has negatively impacted sales in important cold-weather categories. Taken together, through the first three weeks of Q4, our consolidated comp sales have increased in the high-teens."

Meanwhile, Dick's Sporting Goods President Lauren Hobart adds the post of chief executive, effective Feb. 1. Stack becomes executive chairman and continues as chief merchant.

Stack "also will oversee key strategic growth initiatives for the company,” the company said in a statement.

He "has served as chairman and CEO of Dick's since he and his siblings bought his father's two small sporting goods stores in upstate New York in 1984," the company said. 

Hobart has more than 25 years of experience in finance, consumer and retail. She held a number of posts during 14 years at PepsiCo  (PEP)  and joined Dick’s as chief marketing officer in 2011. She was named president in 2017 and joined the board in 2018.