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Revenue Beat Sends Dick’s Stock Soaring

consumer discretionary news Nov 22, 2023

Cost-cutting is finally starting to bite


After a real cruel summer, Dick’s Sporting Goods is ascendant this morning thanks to a huge revenue and earnings beat. Let’s unpack the numbers. 


Dick’s smashed expectations on both sides of the ball by generating a strong $2.85 EPS from $3.04 billion in revenue. This is a great reversal after Dick’s languished under inventory costs over the summer.


Dick’s is now a year deep into their cost-cutting plan, and that finally appears to be paying dividends. Layoffs in August and new inventory measures have finally allowed for profitability growth while a stronger-than-normal back-to-school season propelled revenue to way better heights. But, more importantly, high-end products and cheaper essentials are keeping revenue lift alive at DKS. Dick’s now expects a decent lift to full-year revenue and a much-improved EPS thanks to even better cost management in Q4. Sometimes that’s all the market needs. 


As consumer spending slowly dries up, retailers are being pushed further and further into a difficult position. What we’re seeing now is that it is possible for some retailers to manage their way out of this decline. The cost-cutting at Dick’s is a really strong example of how companies can still find growth in this environment. Of course, DKS still has a ways to go to reclaim the heights they hit in Q2, but the market is back on board with their roadmap. Dick’s stock rose over 8% in early trading.