What happened
Shares of Dick's Sporting Goods (DKS 0.83%) surged on Wednesday after the retailer delivered excellent second-quarter results and increased its cash payout to shareholders.
As of 2:30 p.m. EDT, Dick's stock price was up more than 14%.
So what
Dick's net sales jumped 20.7% year over year to $3.27 billion, fueled by a 19.2% increase in same-store sales. Both figures were well above Wall Street's estimates, which had called for revenue of $2.84 billion and comp growth of 5.4%.
Customers are returning to Dick's Sporting Goods' stores in droves. Image source: Getty Images.
Better still, Dick's is becoming more profitable as it expands its revenue base. The retailer's gross and operating margins improved to 39.9% and 20.3%, respectively, up from 34.5% and 14.4% in the year-ago period.. Dick's adjusted net income, in turn, soared 78% to $501.2 million, or $5.08 per share.
"Our record-breaking quarterly sales and earnings significantly exceeded our expectations, reflecting continued strong consumer demand across our diverse category portfolio," CEO Lauren Hobart said in a press release.
Now what
With its profits swelling, Dick's is ramping up its capital returns to investors. It boosted its quarterly dividend by 21% to $0.4375 per share and doubled its stock buyback program to a minimum of $400 million. Dick's also announced a $5.50 per share special dividend payable on Sep. 24 to stockholders of record on Sep. 10.
"This additional cash return to our shareholders demonstrates the confidence we have in our business, the strength of our balance sheet, and a commitment to efficiently deploy our cash," Hobart said.
Looking ahead, management sees Dick's full-year net sales and adjusted earnings per share growing by roughly 21% and 108%, respectively, in 2021.
"We continue to perform at a very high level and invest in our future to reimagine the athlete experience in our core business and with new concepts," executive chairman Ed Stack said. "I am very pleased with the strength of our business and confident about our growth opportunities."
