Dick's Sporting Goods (DKS) earnings Q1 2024

A shopping cart sits in front of a Dick’s Sporting Goods store on August 26, 2020 in Daly City, California.

Justin Sullivan | Getty Images News | Getty Images

Dick’s Sporting Goods on Wednesday said customers are spending more on new sneakers and athletic gear, leading the retailer to raise its full-year earnings guidance.

The big-box sports store’s comparable sales grew 5.3% during its fiscal first quarter, well ahead of the 2.4% growth that analysts had expected, according to StreetAccount.

The company said that growth was driven by increased transactions, meaning more customers are shopping at Dick’s, and higher average ticket values, showing that shoppers are spending more, too.

Here’s how Dick’s did in its first fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: $3.30 vs. $2.95 expected
Revenue: $3.02 billion vs. $2.94 billion expected

The company’s reported net income for the three-month period that ended May 4 was $275 million, or $3.30 per share, compared with $305 million, or $3.40 per share, a year earlier.

Sales rose to $3.02 billion, up about 6% from $2.84 billion a year earlier.

The strong quarter led Dick’s to raise its full-year guidance.

The retailer is now expecting earnings per share to be between $13.35 and $13.75, up from its previous range of $12.85 to $13.25. That’s ahead of the $13.25 that analysts had expected, according to LSEG.

CEO Lauren Hobart said she expects “robust demand from athletes” in the quarters ahead, which underscores the company’s outlook. Even so, the sales guidance falls a bit flat after the retailer’s first-quarter revenue beat.

Dick’s now expects comparable sales to rise between 2% and 3%, compared to previous guidance of up 1% to 2%. The low end of that range is only in line with the 2% growth that analysts had expected, according to StreetAccount.

Dick’s is expecting full-year revenue to be between $13.1 billion and $13.2 billion, which is also in line with estimates of $13.16 billion, according to LSEG.

A jolt for footwear and apparel

Over the last year, consumers beaten down by stubborn inflation and high interest rates have pulled back on discretionary items like new clothes and shoes, but the apparel and footwear markets have shown some signs of life over the last couple of weeks.

Dick’s performance indicates that consumers are willing to shell out for new releases and other staples from big brands like Nike, Hoka, Adidas and On Running, and are spending on things that they may not necessarily need, but are nice to have.

Similar trends were spotted at other retailers. Last week, Ross Stores, Ralph Lauren, Urban Outfitters and TJX Companies all reported positive comparable sales. Even Target mentioned that apparel was a bright spot in an otherwise dim quarter after the retailer saw sluggish clothes sales in the prior-year period. Demand for new Hoka sneakers and UGG boots drove a 21% jump in sales at Deckers, and even Shoe Carnival, which caters more to lower-income consumers, saw sales grow about 7%, ahead of Wall Street’s estimates, according to LSEG.

More insights about the state of consumer health, and the impact it’s having on the apparel and footwear markets, are still to come. Abercrombie & Fitch and American Eagle both report earnings later on Wednesday, while Foot Locker, Birkenstock and Gap will report on Thursday.