Foolish Forecast: Dick's Steps Up to the Plate

Dick's Sporting Goods (NYSE: DKS) will likely report another quarter of rapid sales and earnings growth tomorrow, thanks to new store openings and continued benefits from past acquisitions. The near-term picture continues to be bright for Dick's, but Fools may want to keep close tabs on recent developments for insight into the company's long-term prospects.

What analysts say:

• Buy, sell, or waffle? Twenty-six analysts follow Dick's: 19 rate the stock a buy, seven recommend you simply hold onto it, and there is currently no negative opinion out there.
• Revenues. Analysts are projecting $997 million in second-quarter sales, or approximately 36% above last year's second-quarter sales.
• Earnings. Analysts see a quarterly earnings profit of $0.77, for an impressive 64% year-over-year gain.

What management says:
Back when Dick's released first-quarter results, management said it expected to open six new Dick's stores and two new Golf Galaxies, and report same-store sales growth of 3%-5% as well as diluted earnings of $0.74-$0.77 during the second quarter.

At that time, it also projected the following full-year results:

• 45 new Dick's stores and one relocation.
• 17 new Golf Galaxy stores.
• 1%-2% comps on a 6% increase last year.
• Diluted earnings of $2.37-$2.40.

What management does:
Over the past five years, Dick's has grown rapidly via aggressive new-store openings, the acquisition of archrival Galyan's, and the more recent purchase of Golf Galaxy. Over this time frame, sales have improved better than 20% annually, while earnings and cash flow growth have been even higher.

Margins	01/06	04/06	07/06	10/06	02/07	05/07
Gross	27.9%	28%	28.1%	28.2%	28.8%	29.3%
Operating	6.3%	6.2%	6.3%	6.4%	7.1%	7.3%
Net	2.8%	3.4%	3.4%	3.4%	3.6%	3.7%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflect trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Dick's is definitely outgrowing the competition and is one of the faster-growing retailers out there. But the sporting-goods space is crowded, served by regional competitors and big-box behemoths such as Motley Fool Inside Value pick Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). Additionally, outdoor enthusiasts such as Cabela's (NYSE: CAB) and Gander Mountain (Nasdaq: GMTN) are opening giant superstores as fast as possible.

Speaking of the regional players, Hibbett Sports (Nasdaq: HIBB) posted a 7.1% net margin over the past year, while Big 5 Sporting Goods' (Nasdaq: BGFV) net margin was only slightly lower than Dick's at 3.5%. Add it all up, and it's hard for me to be certain that Dick's will be able to compete over the long term and maintain its industry-leading track record of growth.

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• Fool on the Street: Dick's Focuses on the Core
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Cabela's is a Motley Fool Hidden Gems recommendation.

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.