Dick's Sporting Goods (NYSE: DKS) reported Q4 earnings that topped expectations on the top and bottom-line, sending shares higher by nearly 15% over the ensuing sessions. Many investors and analysts have been expecting a sharp slowdown in retail spending given the temporary factors that caused a surge in demand for goods which was also abetted by stimulus payments.
These factors have caused a sharp selloff in retail stocks over the past couple of months with the SPDR S&P Retail ETF (NYSE: XRT) down by more than 20% from its November high, more than double the S&P 500's (NYSE: SPY) decline from its high. Another challenge for retailers is that inventories continue to be plagued by shortages, while there are reports of large stocks of inventories stuck in various channels.
Inside the Numbers
Dick's has been an outperformer relative to its peers which is not surprising when looking at its Q4 earnings report which shows little indication of any slowdown. In Q4, Dick's reported $3.64 in earnings per share which topped expectations of $3.43 per share. Revenue also topped expectations at $3.35 billion vs. $3.31 billion.
Overall, EPS was higher by 43% and revenues were up 8% compared to 2020's Q4. And, revenues were higher by 28% on a 2-year basis. Same-store sales were higher by 5.9%, which topped analysts' expectations of a 4.8% increase. Physical retail sales were up 14%, while online sales dropped 11%.
It also issued a 2022 forecast that was above analysts' expectations. Analysts have been forecasting a slowdown in consumer spending due to inflation denting consumer confidence, and recent events in Ukraine mean that more inflation is going to arrive in the next couple of months.
For 2022, the company expects EPS in between $11.70 and $13.10, which is well above analysts' forecast of $11.31 in 2022 EPS. For the year, it sees same-store sales growth between 0% and -4% due to stimulus payments and inflation having a negative effect on discretionary spending as well as some spending on sporting goods pulled forward over the last 2 years. The company also announced an 11% increase of its dividend.