Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
TD Cowen's model also assumes that capital expenditures (Capex) will remain at 6% of sales, with a return on invested capital (ROIC) of 23%, which is among the highest in the firm's coverage of Softlines/Broadlines retail. The analysis indicates that the introduction and expansion of HoS stores may provide significant tailwinds to Dick's Sporting Goods (NYSE:DKS) in terms of customer acquisition, sales, and profitability. Current financials support this outlook, with DKS maintaining a healthy current ratio of 1.72 and operating with moderate debt levels. For detailed analysis of DKS's financial health and growth prospects, including comprehensive valuation models and peer comparisons, explore the full research report available on InvestingPro. Current financials support this outlook, with DKS maintaining a healthy current ratio of 1.72 and operating with moderate debt levels. For detailed analysis of DKS's financial health and growth prospects, including comprehensive valuation models and peer comparisons, explore the full research report available on InvestingPro.
TD Cowen's model also assumes that capital expenditures (Capex) will remain at 6% of sales, with a return on invested capital (ROIC) of 23%, which is among the highest in the firm's coverage of Softlines/Broadlines retail. The analysis indicates that the introduction and expansion of HoS stores may provide significant tailwinds to Dick's Sporting Goods in terms of customer acquisition, sales, and profitability. Current financials support this outlook, with DKS maintaining a healthy current ratio of 1.72 and operating with moderate debt levels. For detailed analysis of DKS's financial health and growth prospects, including comprehensive valuation models and peer comparisons, explore the full research report available on InvestingPro.
The expansion plan for HoS is ambitious, with expectations to grow from 15 locations in the fiscal year 2024 to 105 by fiscal year 2027. The new stores are anticipated to contribute significantly to sales and earnings before interest and taxes (EBIT), with each store expected to generate $35 million in omni-channel sales, which is $17 million higher than the current average unit volume (AUV) of the chain.
The analysts at TD Cowen have factored in the growth trajectory of new and existing HoS stores into their models. By the fiscal year 2025, the incremental sales from these stores could total $179 million, and by fiscal year 2027, this figure could reach $362 million. Coupled with a projected 2% to 3% SSS growth from the existing chain (excluding HoS), the overall sales growth could potentially meet or exceed the forecasted algorithm.
TD Cowen's model also assumes that capital expenditures (Capex) will remain at 6% of sales, with a return on invested capital (ROIC) of 23%, which is among the highest in the firm's coverage of Softlines/Broadlines retail. The analysis indicates that the introduction and expansion of HoS stores may provide significant tailwinds to Dick's Sporting Goods in terms of customer acquisition, sales, and profitability.
In other recent news, Dick's Sporting Goods has been a focus of several analyst firms. Goldman Sachs maintained a Buy rating on the company, emphasizing the potential growth of the Game Changer business, a leading scoring and statistics application in youth sports. Truist Securities, UBS, and Williams Trading all adjusted their outlooks on Dick's Sporting Goods, raising their price targets due to the company's robust growth and promising future prospects.
The company has recently reported impressive financial performance, with consolidated net sales for the third quarter increasing by 4.8% to $9.55 billion. Additionally, the company revised its full-year guidance, expecting comparable sales growth of 3.6% to 4.2% and earnings per share between $13.65 and $13.95.
In terms of expansion, Dick's Sporting Goods plans to open approximately 15 House of Sport locations in 2025, aiming for 75-100 by 2027. About 20 Field House locations are also anticipated to open in 2025. The company's Game Changer platform has shown strong performance, with 5.5 million unique active users, marking a 21% increase year-over-year.
Analysts from Truist Securities, UBS, and Williams Trading have highlighted the company's potential for sustained growth, citing its unique market position and successful strategic initiatives. Goldman Sachs underscored the company's structural advantages and the potential for the Game Changer business to contribute to Dick's Sporting Goods' financial performance.
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