Dick’s Sporting Goods Reports Strong Q4 but Shares Slip on Cautious Outlook

Dick’s Sporting Goods posted better-than-expected fourth-quarter earnings on Tuesday, reflecting continued resilience in consumer spending on athletic and sporting goods. However, despite delivering record sales, shares fell 7% in premarket trading as investors reacted to a cautious outlook for fiscal 2025.

Strong Q4 Performance Reflects Consumer Strength

Dick’s reported adjusted earnings per share of $3.62, surpassing analyst expectations of $3.54. Revenue also exceeded forecasts, coming in at $3.89 billion, compared to consensus estimates of $3.78 billion. Comparable sales grew 6.4% year-over-year, driven by an increase in both transaction volume and higher average spending per purchase.

For the full fiscal year 2024, Dick’s reported 5.2% comparable sales growth and earnings per share of $14.05, marking a 15% increase from the prior year. This strength highlights continued demand for athletic gear, footwear, and team sports equipment, even in a macroeconomic environment where consumers are tightening discretionary spending.

Gross margin for the quarter came in at 35%, slightly ahead of analyst estimates of 34.6%, indicating solid inventory management and pricing discipline.

Guidance Reflects Macroeconomic Uncertainty

Despite the strong Q4 results, Dick’s issued a moderate outlook for 2025, reflecting a more uncertain economic backdrop. The company expects:

- Full-year comparable sales growth between 1.0% and 3.0%.

- Earnings per share between $13.80 and $14.40, which is below analyst estimates of $14.84.

- Net sales in the range of $13.6 billion to $13.9 billion.

- Capital expenditures of $1.0 billion, reflecting continued investment in store expansions and digital transformation.

Management acknowledged the dynamic macroeconomic environment, suggesting that while consumer demand remains solid, they are factoring in potential volatility in spending patterns for the year ahead.

Key Growth Drivers & Strategic Investments

Dick’s remains optimistic about its long-term growth strategy, emphasizing three key investment areas:

1. Store Expansion & Real Estate Repositioning – The company opened seven House of Sport locations and 15 Dick’s Field House locations in 2024 and plans to open an additional 16 House of Sport and 18 Field House locations in 2025.

2. Footwear Growth – The company continues to see strong demand for premium athletic footwear and plans to further expand its assortment and in-store experiences.

3. E-Commerce Acceleration – Investments in online platforms and fulfillment infrastructure remain a focus as the company seeks to enhance digital sales.

Executive Chairman Ed Stack expressed confidence in the company’s ability to capitalize on the convergence of sports and culture, citing a growing interest in athletic apparel and equipment, fueled by major sporting events in the U.S. over the next several years.

Stock Reaction & Market Implications

Shares of Dick’s Sporting Goods had already pulled back from $252 in early February to $213 ahead of the earnings report, reflecting some investor caution around the sector. Following the earnings release, the stock dipped further to $201, breaching its 200-day moving average ($216) and putting it in a precarious technical position.

The early move will be an interesting setup for investors as the broader market attempts to stabilize following Monday’s sharp selloff. While the earnings beat confirms that consumer spending in the sporting goods category remains resilient, the stock’s reaction suggests that investors were hoping for a stronger full-year guidance update.

Capital Return to Shareholders

Despite the tempered outlook, Dick’s remains committed to returning capital to shareholders. The board approved:

- A 10% increase in its quarterly dividend, continuing its trend of annual dividend hikes.

- A new five-year $3 billion share repurchase program, reinforcing management’s confidence in long-term profitability.

A Strong Business in a Cautious Market

Dick’s Sporting Goods continues to demonstrate operational strength and consumer demand, delivering record Q4 sales and a solid beat on earnings and revenue. However, with a more conservative 2025 outlook and concerns over macroeconomic headwinds, investors remain cautious, as reflected in the stock’s decline.

Looking ahead, investors will monitor consumer spending trends, margin performance, and store expansion initiatives to gauge whether Dick’s can sustain growth momentum in an uncertain environment. The early stock weakness sets up an important test in the coming days, particularly as the broader market looks to recover from recent volatility.