Dick's Sporting Goods' (DKS) Q3 same-store sales are expected to increase by 2.5%, about in line with the consensus estimate of 2.4%, which represents a 200 basis point slowdown from the previous quarter, Wedbush Securities said in a note Wednesday.
Wedbush analysts said that same-store sales should slow down in Q3 as the benefits from past store closures fade and demand stagnates. Margins may face additional pressure due to a calendar shift and elevated pre-opening costs. For Q4, the company plans to hire 8,000 seasonal workers, fewer than last year's 8,600, which may indicate lower sales growth expectations.
"In Q3, we expect continued growth supported by the company's core mid-upper income customers and the company's initiatives including differentiated and better access to on-trend products, 'cascading' customer service and other processes from House of Sport to the rest of the chain, and omnichannel initiatives," the analysts said.
The analysts added that these positives will likely be partly offset by ongoing pressure in fitness and outdoor categories, which are returning to pre-pandemic levels. Also, due to the impact of a key back-to-school week shift, the company expects a negative year-over-year sales impact of about $105 million this quarter.
Wedbush reiterated its neutral rating on the stock with a $250 price target.
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