$Dick's Sporting Goods (DKS.US)$🎯 2024.3.31 Current price 2...

New data: In 24Q4, revenue continued to grow. Operating profit increased 20% due to increased gross margin, and net profit increased 25.8% due to other non-operating income.

Revenue increased by 5% in 2024, operating profit shrank 10.1% due to a sharp increase in expenses, net profit before tax shrank 4.7% due to non-operating income, and net profit increased slightly by 0.3% due to income tax fluctuations.

Looking at the 5-year span, revenue reached a level in 2022, increasing by 28.3%, bringing about a nearly twofold increase in profit. The revenue growth rate in the past two years was not very fast; instead, profit declined sharply.

The balance sheet showed no signs of major acquisitions in 2022, but long-term loans increased from 420 million to 1.93 billion, and interest expenses increased to 95 million in 2023, and the sharp increase in profit completely offset the increase in interest. Judging from the results of this increase in financial leverage, it was very successful. Due to the decline in gross margin in the past two years, expenses have grown too fast, and profits have shrunk very fast. Currently, long-term loans remain high at $1.48 billion, accounting for 57% of net assets, and the balance ratio remains at 71.9%, and has not continued to decline.

Currently, the price-earnings ratio is 18.5, and the valuation has reached a reasonably high range. Profits have only been substantially increasing for one quarter recently, and the cost growth rate is still very fast. Considering the cyclical nature of the sector, positions can be further reduced.