Dick's Sporting Goods (DKS) Splits - Wait a week to buy

Dick's Sporting Goods (NYSE:DKS) shares split 2:1 this morning and now that shares are in the $32 range vs. $70 we're interested.  Tack on a downgrade last week by Robert W. Baird & Co saying the recent run-up in the stock price and warm weather that may hurt Q3 results could push shares down even further.

Analyst J. David Cumberland said shares of the sporting goods retailer have risen over 22 percent since the company's strong second-quarter report. He downgraded the stock to "Neutral" from "Outperform."

Dick's Sporting Goods Inc. (DKS)

In August, Dick's said second-quarter earnings rose 87% on higher sales from both existing and new stores.


 (In millions of USD)

Income Statement Quarterly
(Aug '07)
Total Revenue 1,013.42 3,114.16 2,624.99
Gross Profit 298.66 896.70 737.64
Operating Income 83.19 197.71 132.75
Net Income 47.93 112.61 72.98

Cumberland warned, however, that mild weather conditions hurt recent sales of cold weather merchandise for many retailers. Cumberland said temperatures have been six degrees above average in Dick's markets over the past four weeks, which may hurt third-quarter results.

In the long-term, Cumberland said the company will continue reporting strong earnings and sales growth because of its market leadership and strong execution.  Cumberland said Dick's has 7 percent market share in the $52 billion sporting goods retail market.

Bring on the hate, we welcome that, the more ammo to push shares down even further, if we see below $30, the Masters recommend jumping in. 


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Ted G

Article by Ted Gottsegen 

Contributor at TheStockMasters.com

Disclaimer: The Author does not hold any positions or shares in the securities mentioned in this publication nor does he stuff his shorts.


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