Needham & Company Maintains a 'Buy' on Dick's Sporting Goods (DKS); Alright Team, We're Going Deep...Or Maybe Not

Needham & Company maintains a 'Buy' on Dick's Sporting Goods (NYSE: DKS) price target of $59.00.

Analyst, Sean McGowan, said, "DKS reported 2Q results that were better than expected after excluding an impairment charge related to the European retailer, JJB Sports. 2Q Sales were up 10.0% YoY to $1.4 B due largely to a SSS increase of 3.8%. SSS were up 2.9% at Dick’s stores and 4.4% at Golf Galaxy Stores; e-commerce was up 34.6% YoY. GM increased 47 bps YoY and was driven by a 29 bps expansion in merchandise margin. DKS recorded a pre-tax impairment charge of $32.4mm related to its investment in JJB Sports. Due to continued macroeconomic weakness in Europe, JJB’s primary market, DKS impaired the full value of its investment. Excluding this charge, non-GAAP EPS were $0.65, which was above guidance ($0.62-$0.63) and our estimate ($0.64). Management now expects FY non-GAAP EPS of $2.47-$2.51 and SSS to increase 4-5%. We are leaving our ‘12 EPS estimate unchanged at $2.50 but lowering our ’13 estimate to $2.85 from $2.90 due to a lower than expected store base."

For an analyst ratings summary and ratings history on Dick's Sporting Goods click here. For more ratings news on Dick's Sporting Goods click here.

Shares of Dick's Sporting Goods closed at $48.59 yesterday.

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