Earnings Update: Sporting a Mediterranean Preppy Outlook on Retail – DKS, CAVA, ANF

Sporting A Solid Quarter

Dicks Sporting Goods (DKS) reported earnings this week that beat and raised. Q1 EPS exceeded estimates at $3.30 vs FactSet $2.96. Additionally, revenues came in higher than consensus. The company raised its FY24 EPS guidance to $13.35 – 13.75 vs prior guidance $12.8 -13.25 well exceeding estimates (FactSet $13.31).

DKS Management stated “We are incredibly proud of our Q1 results. With our comps increasing 5.3% and double-digit EBT margin of over 11%, we drove continued momentum in our business. Our core strategies and execution are delivering strong results, and we are continuing to gain market share as consumers prioritize DICK’S Sporting Goods to meet their needs. Because of our strong Q1 performance, our expectations for continued robust demand from athletes and the confidence we have in our business, we are raising our full year outlook.”

My Big Fat Greek Bowl

Cava Group (CAVA) posted Q1 adjusted EBITDA $33.3M vs FactSet $23.6M. Quarterly revenues ($259.0M vs FactSet $246.0M) and Q1 EPS ($0.12 vs FactSet $0.04) also well exceeded expectations. Additionally the Street is positive on new unit performance and initiatives.

CAVA Management stated, “Driven by our highly portable Mediterranean concept and powerful unit economic engine, we generated our fourth consecutive quarter of net income and our first quarter ever of positive free cash flow. During the quarter, Same Restaurant Sales grew 2.3%, an exceptional 30.7% on a 2-year basis. We opened 14 net new restaurants and as we continue to invest in scalable infrastructure to support our growth, we are in a strong position to capture the significant whitespace opportunity ahead of us.”

That’s SO Fitch

Abercrombie and Fitch (ANF) posted a big beat (Q1 EPS $2.14 vs FactSet $1.76) and raised FY24 guidance against a high bar (Revenue ~+10% y/y vs prior guidance +4-6% and FactSet +7.0%). Shares moved up 24% on the day of the company’s announcement at close of day.

ANF Management stated, ““Our outstanding first quarter results reflect the power of our brands and strong execution of our global playbook. We successfully navigated seasonal transitions with relevant assortments and compelling marketing, leveraging agile chase capabilities and inventory discipline, driving sales above our expectations. Growth was broad-based across regions and brands with Abercrombie brands registering 31% growth and Hollister brands delivering growth of 12%. Strong top-line growth, along with gross profit rate expansion, led to record first quarter operating income and an operating margin of 12.7%.”