Editor's Note: This column by Scott Rothbort is a special bonus for TheStreet.com and RealMoney readers. It first appeared on Street Insight on March 6 at 11:43 a.m. To sign up for Street Insight, where you can read Rothbort's commentary in real time, please click here.

With the integration of Galyan's in the rearview mirror, Dick's Sporting Goods ( DKS) is poised to continue to grow from coast to coast and build on its leadership in the industry. The acquisition of The Sports Authority is proof there is still plenty of value and growth in this sector.

The company is scheduled to release fourth-quarter 2005 earnings results before the market opens on Tuesday. The Street is expecting Dick's to earn 98 cents a share on net sales of $858.23 million. In the year-ago fourth quarter, Dick's earned 81 cents. The company is expected to earn $1.74 a share in fiscal 2005 and $1.81 in fiscal 2006, when revenue is set to increase from $2.63 billion to $3.00 billion.

There are two keys to the quarter:

  • First is how the company performed during the holiday selling season and since. Holiday sales were strong at Dick's, based on my observation at several stores. I noticed several popular items sold down or out prior to Christmas. On the other hand, warmer-than-usual winter weather may have had both pros and cons for Dick's, with possible lower sales for winter sports gear but higher sales in equipment for warmer-weather sports such as golf and hunting.
  • Second, the integration of Galyan's, another sporting goods outfit, is always a concern. In the summer, Dick's hit a bump in the integration. Everything appeared to be back on track in the fall, as the company produced solid third-quarter results. I believe the integration situation is no longer an issue.
  • I believe next year's estimates are too low. Perhaps the company will set that straight on the conference call.

    At the time of publication, Rothbort was long Dick's Sporting Goods.

    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 accounts to its clientele. In addition, LakeView Asset Management, LLC has developed and manages trading of long/short proprietary index strategies. Rothbort is an adjunct professor at the Stillman School of Business at Seton Hall University. Prior to that, Rothbort worked at Merrill Lynch for 10 years. During his tenure at Merrill, he was instrumental in building the global equity derivative business, started and managed the global equity swap business and oversaw and coordinated the secured funding, collateral management and collateral identification for the global capital markets group and corporate treasury of Merrill Lynch.

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