Dick’s Sporting Goods Earnings: Strong Opening to 2024 Lights Up Scoreboard; Shares Expensive

Dick's Sporting Goods' 5.3% comparable sales growth beat our 2% estimate in 2024's first quarter. Its sales results were impressive given that many sportswear producers have reported subpar consumer demand lately, although relatively high operating costs suggest that it needed to spend more to drive sales. We expect to lift our $106 fair value by a high-single-digit percentage and believe that implied guidance for the rest of 2024 is overly cautious. However, we rate Dick's as a no-moat company given the competitiveness of sporting goods retail, and we believe its shares, up by a mid-teen percentage on the report, are overvalued.