As DICK’S Sporting Goods Inc. DKS prepares to announce its first-quarter fiscal 2025 earnings on May 28, investors are closely watching for insights into its performance this season.

DKS is expected to register a year-over-year sales increase in the quarter under review. The Zacks Consensus Estimate for revenues is pegged at $3.12 billion, indicating a rise of 3.4% from the year-ago quarter’s reported figure. 

However, the consensus estimate for earnings is pegged at $3.24 per share, which indicates a dip of 1.8% from the year-ago reported number. The consensus mark has moved up 0.9% in the past seven days. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

In the last reported quarter, the company delivered an earnings surprise of 3.7%. It has a trailing four-quarter earnings surprise of 8.6%, on average.

Factors to Note About DKS’ Upcoming Release

DICK’S Sporting’s quarterly performance is likely to have reflected gains from solid strategic efforts, brand strength and market share gains. Also, strong comparable store sales (comps) and healthy transaction growth are expected to have acted as tailwinds. The company has also been enhancing service levels through its digital and store experiences to cater well to the athletes’ needs.

Recently, the company has announced select preliminary results for first-quarter fiscal 2025. For the same quarter, management expects a comparable sales increase of 4.5%, higher than our model prediction of 2.1% growth. DKS envisions earnings per share (EPS) of $3.24 and adjusted EPS of $3.37.

Management remains optimistic about the solid start to the year, with sustainable growth. The company has making bold strides in digital transformation, with GameChanger and the Dick’s Media Network as two key revenue drivers. DKS’ store-expansion efforts also look encouraging. DKS is emphasizing the omnichannel experience to drive solid athlete engagement. 

DKS is on track with its four strategic pillars, including an omnichannel athlete experience, a differentiated product assortment, deep engagement with the DICK'S brand and passionate teammates who provide exceptional service. It has been progressing well with business optimization to streamline the overall cost structure. Robust omnichannel athlete experience and unique product assortment are added catalysts. Gains from the aforesaid initiatives are expected to have bolstered performance in the to-be-reported quarter.

However, a volatile macroeconomic landscape and higher costs remain concerns. In its last earnings call, management had anticipated greater deleverage in adjusted selling, general and administrative (SG&A) expenses in the first half of fiscal 2025. Our model expects adjusted SG&A to increase 5.9% in the first quarter.

Story Continues

What the Zacks Model Unveils for DKS

Our proven model conclusively predicts an earnings beat for DICK'S Sporting this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

DICK'S Sporting has an Earnings ESP of +2.57% and a Zacks Rank of 3. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

DICK'S Sporting Goods, Inc. Price and EPS Surprise

DICK'S Sporting Goods, Inc. price-eps-surprise | DICK'S Sporting Goods, Inc. Quote

DICK'S Sporting’s Valuation Picture

DICK'S Sporting has a forward 12-month price-to-earnings ratio of 12.50x, which is below the five-year high of 24.78x and the Retail - Miscellaneous industry’s average of 16.71x.

The recent market movements show that DICK'S Sporting’s shares have gained 9.2% in the past six months against the industry's 10% decline.

Three More Stocks With the Favorable Combination

Here are three other companies, which according to our model, have the right combination of elements to post an earnings beat:

Five Below, Inc. FIVE currently has an Earnings ESP of +4.18% and a Zacks Rank of 3. FIVE is likely to register a top-line increase when it reports first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $961.1 billion, indicating an 18.4% rise from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here. 

The consensus estimate for Five Below’s earnings is pegged at 80 cents per share, implying a 33.3% jump from the year-ago quarter. FIVE delivered an average earnings surprise of 40.6% in the trailing four quarters.

Gap GAP has an Earnings ESP of +3.03% and a Zacks Rank of 3 at present. GAP is likely to register top-line growth when it releases first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.42 billion, which implies growth of 0.8% from the figure reported in the year-ago quarter.

The consensus estimate for GAP’s quarterly earnings has increased a penny in the past 30 days to 44 cents per share, implying growth of 7.3% from the year-ago quarter’s number. GAP delivered an earnings surprise of 77.5%, on average, in the trailing four quarters.

Ross Stores ROST has an Earnings ESP of +0.92% and a Zacks Rank of 3 at present. ROST is likely to register a top-line increase when it releases first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $4.97 billion, which implies a rise of 2.3% from the figure reported in the year-ago quarter.

The consensus estimate for ROST’s quarterly earnings has increased a penny in the past 30 days to $1.43 per share, implying a dip of 2.1% from the year-ago quarter’s number. ROST delivered an earnings surprise of 7.7%, on average, in the trailing four quarters.

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Ross Stores, Inc. (ROST):Free Stock Analysis Report

DICK'S Sporting Goods, Inc. (DKS):Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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