What happened
Shares of retail chain Dick's Sporting Goods (DKS -0.30%) surged to all-time highs today after reporting record financial results in 2022 and more than doubling its quarterly dividend. As of 1:30 p.m. ET, Dick's Sporting Goods stock was up 11%.
So what
In 2022, net sales for Dick's Sporting Goods were up less than 1% year over year. That said, the company still delivered a record high in this metric. Moreover, it outperformed expectations. For the year, management had expected same-store sales to drop 1.5% year over year, at least. But strong sales in the final quarter of 2022 led to just a 0.5% drop in same-store sales for the year.
While net sales were up in 2022, profitability did fall for Dick's Sporting Goods. In 2021, the company had net income of $1.5 billion, which fell 31% in 2022 to just over $1 billion. Still, this is solidly profitable and slightly more than Wall Street was expecting.
Now what
While financial results in 2022 were strong, Dick's Sporting Goods stock might be up more today because of its forward guidance and revised dividend. With guidance, management expects ongoing modest same-store-sales growth in 2023. And it expects earnings per share (EPS) to bounce back. In 2022, it had EPS of $10.78 but expects EPS of $12.90 to $13.80 in the coming year.
Dividend investors will be happy to know that Dick's Sporting Goods has decided to more than double its quarterly dividend to $1 per share. That's incredible dividend growth in a single year but a sustainable decision nonetheless, considering its payout ratio is still under 10%.
If Dick's Sporting Goods can continue operating profitably and returning excess cash to shareholders, today might not be the last time the stock hits an all-time high.
