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Dick's Sporting Goods Hits a Home Run as Comps Soar 20%

By Rich Duprey – Aug 26, 2020 at 10:31AM

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The sporting goods retailer had record sales and earnings in the second quarter.

Dick's Sporting Goods (DKS -2.23%) touched all the bases in the second quarter, reporting record sales and earnings as consumers increasingly participated in a growing number of outdoor activities during the pandemic.

The sporting goods retailer said it reopened all of its stores during the quarter and saw same-store sales surge 20.7% from the year-ago period despite 15% of its locations being closed on average. E-commerce sales also spiked 194% higher to achieve a 30% penetration rate of total sales, compared to just 12% last year.

Revenue jumped 20% to $2.71 billion, generating $3.21 in adjusted earnings per share, blowing away analyst expectations of just $1.30 per share.

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Ready to take on all comers

Chairman and CEO Ed Stack said the pandemic increased consumer awareness of health and fitness needs allowing Dick's to capitalize on the trend. "There has also been a greater shift toward athletic and active lifestyle product with people spending more time working and exercising at home," he said in a company statement. "The majority of our assortment sits squarely at the center of these trends, and while mindful of the uncertainty in the current environment, we are in a great lane right now."

Dick's ended the quarter with $1.1 billion in cash and equivalents and no debt under its credit facilities, though it does have $2.3 billion in long-term operating lease liabilities.

Its solid financial position let it reinstate and pay its dividend without missing a payment, and Dick's will resume repurchasing stock as warranted. The retailer also said it was extending the 15% premium it is paying workers through the end of the year.

While the quarter's momentum is extending into the third quarter, with comps up 11% through the first three weeks, Dick's Sporting Goods is still not providing guidance for the year.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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