DICK’S Sporting Goods, Inc. DKS has been gaining from favorable customer demand, a solid product portfolio and strength in the online platform. Strong online show can be attributable to healthy demand and improved omnichannel capabilities, including curbside pickup services and BOPIS. Notably, e-commerce sales soared 95% in the fiscal third quarter. As a result, e-commerce contributed to nearly 21% of net sales in the reported quarter compared with 13% in the prior-year quarter.
Further, mobile sales penetration grew more than 50% with an uptick in mobile app downloads. Also, its stores fulfilled roughly 70% of online sales to meet customers’ growing online demand. Going ahead, management plans to make significant investments in e-commerce, technology, store payroll, Team Sports and private brands. Keeping in these lines, it recently collaborated with Instacart to offer same-day delivery service to more than 150 stores across the United States.
Sources believe that the company witnessed a solid online show during the Black Friday sale, which started earlier this November and spanned for 10 days. It gained from a spike in demand for active lifestyle apparel, outdoor and at-home fitness items, stemming from increased stay-at-home trends. Also, its newly launched omnichannel services, including mobile checkout and return stations, a Shop/Click/Pay app at a few locations and a store management plan, bode well.
Apart from a robust online business, strength in hardlines, apparel and footwear act as key growth drivers. This led the company to deliver better-than-expected third-quarter fiscal 2020 results, wherein both top and bottom lines improved year over year. Net sales of $2,412.1 million rose 22.9% year over year on the back of improved store sales and a robust online show. Notably, consolidated same-store sales (comps) grew 23.2%, driven by a 19.6% rise in average ticket and a 3.6% increase in transactions. Moreover, store comps grew in double digits and accounted for 90% of third-quarter sales.
Additionally, the company noted that the strong momentum continued in the fourth quarter. In fact, consolidated comps grew in high teens in the first three weeks of the fourth quarter.
All said, we hope that these aforementioned upsides give us reasons enough to remain optimistic about this Zacks Rank #1 (Strong Buy) stock, which has soared 63.4% in the past six months, outperforming the industry’s growth of 34.8%. Topping it, a VGM Score of A and a long-term earnings growth rate of 5.6% reflect its inherent strength. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Hibbett Sports HIBB has a long-term earnings growth rate of 17% and currently, a Zacks Rank #1.
Five Below FIVE has an expected long-term earnings growth rate of 21% and presently, a Zacks Rank #1.
Tractor Supply Company TSCO, with a Zacks Rank #2 (Buy), has an expected long-term earnings growth rate of 11.7%.
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DICKS Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
Tractor Supply Company (TSCO) : Free Stock Analysis Report
Five Below, Inc. (FIVE) : Free Stock Analysis Report
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