Looking for some fresh ideas for your portfolio? If you're a sports enthusiast, you may want to look into sporting goods stocks. You might think that the sharp renewed interest in individual sports during the pandemic has waned. (You might think that people will buy fewer running shoes for individual jogging like they did during the pandemic.)
According to the U.S. Census Bureau and the St. Louis Fed, sporting goods sales increased in 2020 by almost 20% and through October 2021, revenue increased 31%. Therefore, 2022 finds sporting goods stores in a good position, even though we're well beyond the first strains of the pandemic.
Why Buy Sporting Goods Stocks?
Why should you buy sporting goods stocks? The answer is almost too simple: Sporting goods businesses are expected to grow to $82 billion by 2023 at a compound annual growth rate of about 4%.
Which sporting goods stocks make sense for your needs? Instead of targeting a particular brand because you or your golf buddies like it, it's best to pull all the stops and do deep research before you buy.
Take a look at revenues, earnings, future growth, return on equity, profit margins and other factors to get a sense of each company's underlying value and potential for future growth. You can find all of this by looking into the financial statements of each company. The stocks we list below will also showcase several factors regarding sporting goods stocks.
Check Out These 4 Stocks for Future Wins
Let's take a look at four stocks that you can consider below: DICK's Sporting Goods Inc., Big Five Sporting Goods Corp., Callaway Golf Co. and Clarus Corp.
DICK's Sporting Goods Inc., headquartered in Coraopolis, Pennsylvania, retails a wide variety of sports equipment, apparel, footwear and accessories through a blend of associates, in-store services and unique specialty shops.
The company shot past Wall Street expectations for revenue and earnings in the summer of 2020 as it reported that online sales had increased by close to 200% in the second quarter of the year.
DICK's delivered full-year 2021 net sales of $12.29 billion and 26.5% growth in consolidated same store sales and earnings per diluted share of $13.87. It also showcased non-GAAP earnings per diluted share of $15.70, up 142% and 157% respectively compared to 2020 earnings.
DICK's returned $1.8 billion to shareholders during 2021, including $750 million of share repurchases in Q4 as well as an 11% increase in its quarterly dividend.
The company has predicted full year 2022 earnings per diluted share to show up $9.96 and consolidated same store sales to be in the range of - 4% to flat.
Big 5 Sporting Goods Corp., headquartered in El Segundo, California, is a holding company that supports retail operations of sporting goods. It sells athletic shoes, apparel and accessories and outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, winter and summer recreation and roller sports.
The company had a record fiscal 2021 full year EPS of $4.55 and Q4 EPS of $0.89 and $97.4 million in cash and cash equivalents, as well as no debt. The company also delivers over $69 million of capital to shareholders through its dividends and stock repurchases in fiscal year 2021. It also declared a regular quarterly cash dividend of $0.25 per share.
Callaway Golf Co., headquartered in Carlsbad, California, manufactures and distributes golf equipment and accessories through its segments that include golf equipment and apparel, gear as well as an "other" segment. The golf equipment segment focuses on the design, manufacture and sale of a full line of golf equipment. Callaway Golf Co.'s equipment and apparel segment features wearable gear. Its "other" segment refers to the development and sale of soft goods under the Callaway, TravisMathew, OGIO and Jack Wolfskin brands.
Callaway Golf Co.'s revenue nearly doubled, topping $3 billion, and outperformance was driven by strong Topgolf sales. The company expects all business segments to grow in 2022.
Its full-year 2021 consolidated net revenue increased 97% year-over-year and Q4 2021 consolidated net revenue increased $337 million to $712 million, a 90% increase from 2020. The full year 2021 adjusted EBITDA increased $281 million (+170% year-over-year) to $445 million and the Q4 2021 adjusted EBITDA went up $27 million (+214% compared to Q4 2020) to $14 million.
The company has a full-year 2022 revenue outlook of $3,780 million to $3,820 million and adjusted EBITDA guidance of $490 million to $515 million.
Clarus Corp., headquartered in Salt Lake City, Utah, develops, manufactures and distributes outdoor equipment and lifestyle products focused on climbing, skiing, mountaineering and related sports. The company has two segments: the black diamond and Sierra segment. The black diamond segment designs, manufactures and markets outdoor engineered equipment and apparel for climbing, mountaineering, backpacking, skiing and other year-round outdoor recreation activities. The Sierra segment produces bullets and ammunition for rifles and pistols.
For Clarus Corp., sales in Q4 2021 increased 56% year-over-year to a record $118.2 million and sales for the full year 2021 increased 68% to a record $375.8 million. The company further expects full year 2022 sales to top $470 million and adjusted EBITDA to hit $78 million. The company also expects a full year 2022 free cash flow of $50 to $60 million.
Sporting Goods Stocks for the Win
Parents will never stop needing sports gear for kids' athletic adventures and to be honest, sporting goods will never go out of style. Investigate all the options within several sporting goods stocks so you put the right ones into your portfolio.
Before you consider DICK'S Sporting Goods, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and DICK'S Sporting Goods wasn't on the list.
While DICK'S Sporting Goods currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
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