DICK'S Set to Report Q3 Results: What to Watch for This Season?

As DICK’S Sporting Goods Inc. DKS prepares to announce its third-quarter fiscal 2025 earnings on Nov. 25, investors are closely watching for insights into its performance this season.

DKS is expected to register a year-over-year sales increase in the quarter under review. The Zacks Consensus Estimate for revenues is pegged at $3.2 billion, indicating a rise of 4.3% from the year-ago quarter’s reported figure.

However, the consensus estimate for earnings is pegged at $2.69 per share, which indicates a dip of 2.2% from the year-ago reported number. The consensus mark has moved downward in the past seven days. The company has a trailing four-quarter earnings surprise of 2.1%, on average.

Factors to Note About DKS’ Q3 Release

DICK’S quarterly performance is likely to have reflected gains from solid strategic efforts, brand strength and market share gains. Management highlighted broad-based strength across footwear, apparel, team sports and golf heading into the back half, with no signs of consumer slowdown. The company’s second-quarter momentum was driven by a healthy mix of both average ticket growth and higher transactions, and these trends have set a solid foundation for the third quarter.

Margin trends in the fiscal third quarter are expected to have been supported by pricing discipline, differentiated product access and the continued strength of high-margin vertical brands like DSG, CALIA and VRST, which management noted carry 700-900 basis points higher margins than national brands. These factors position DICK’S to sustain healthy merchandise profitability in the third quarter, even as it navigates a complex macro backdrop. 

Although SG&A is expected to have increased due to strategic investments in digital capabilities, store development and marketing, the company emphasized that these initiatives are essential to driving growth in the upcoming quarter.

DICK’S is also leaning heavily into three strategic growth pillars that are set to play a larger role in third-quarter performance. First, accelerating experiential real estate expansion through House of Sport and Field House, with management likely to have completed its largest-ever quarterly opening slate of 13 House of Sport and six Field House locations in the third quarter. Second, reinforcing category leadership by partnering closely with brands to secure innovation and premium launches; and third, scaling its digital ecosystem. 

However, DICK’S continues to face an uncertain macroeconomic environment, while tariff-related challenges are expected to pressure performance in the near term. The company’s earnings outlook already factors in the anticipated impact of existing tariffs. Higher wage rates, along with increased investments in talent and technology to create a better athlete experience, and investments in marketing, have been leading to elevated costs for a while. This is expected to have resulted in an increase in SG&A expenses in the to-be-reported quarter. 

Our model indicates adjusted SG&A expenses to increase 6.2% year over year for the fiscal third quarter.

What the Zacks Model Unveils for DKS

Our proven model does not conclusively predict an earnings beat for DICK'S this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

DICK'S currently has an Earnings ESP of -2.39% and a Zacks Rank of 3. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

DKS’ Valuation Picture

DICK'S has a forward 12-month price-to-earnings ratio of 13.63x, which is below the five-year high of 20.95x and the Retail - Miscellaneous industry’s average of 16.98x.

The recent market movements show that DKS’ shares have lost 9.1% in the past three months as compared to the industry's 7.3% decline.

Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Ulta Beauty, Inc. ULTA has an Earnings ESP of +00.24% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Ulta Beauty’s third-quarter fiscal 2025 earnings is pegged at $4.47 per share, implying a decline of 13% from the year-ago quarter. For Ulta Beauty’s quarterly revenues, the consensus mark is pegged at $2.7 billion, which indicates an increase of 7.1% from the year-ago quarter. ULTA delivered a trailing four-quarter earnings surprise of 16.3%, on average.

Five Below, Inc. FIVE currently has an Earnings ESP of +74.71% and a Zacks Rank of 2. FIVE is likely to register a top-line increase when it reports third-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $969.9 million, indicating a 15% rise from the figure reported in the prior-year quarter.

The consensus estimate for Five Below’s earnings is pegged at 22 cents per share, implying a 47.6% decline from the year-ago quarter. FIVE delivered a trailing four-quarter earnings surprise of 50.5%, on average.

Dollar General Corporation DG currently has an Earnings ESP of +7.30% and a Zacks Rank #2. The Zacks Consensus Estimate for DG’s third-quarter fiscal 2025 earnings per share is pegged at 92 cents, implying 3.4% year-over-year growth.

The Zacks Consensus Estimate for quarterly revenues is pegged at $10.61 billion, which indicates an increase of 4.2% from the figure reported in the prior-year quarter. Dollar General delivered a trailing four-quarter earnings surprise of 11.3%, on average.   
 

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This article originally published on Zacks Investment Research (zacks.com).

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