4 Best Sporting Goods Stocks That Are Going Out Of The Park
Looking for new ideas for your portfolio? If you are a sports enthusiast, you might want to look into sporting goods stocks. One would think that the strong revival of interest in individual sports during the pandemic has faded. (You might think people will buy fewer running shoes for individual jogging like they have during the pandemic.)
According to the US Census Bureau and the St. Louis Fed, sales of sporting goods increased in 2020 by almost 20% and through October 2021, revenue increased by 31%. So 2022 puts sporting goods stores in a strong position, even though we’re well past the early strains of the pandemic.
Why buy sporting goods stocks?
Why buy sporting goods stocks? The answer is almost too simple: Sporting goods companies are expected to grow to $82 billion by 2023 at a compound annual growth rate of around 4%.
Which stocks of sporting goods correspond to your needs? Instead of targeting a particular brand because you or your golf buddies like it, it’s best to go all out and research thoroughly before buying.
Look at revenue, 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 at each company’s financial statements. The stocks we list below will also feature several factors regarding sporting goods stocks.
Check out these 4 stocks for future gains
Let’s take a look at four stocks 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 athletic equipment, apparel, footwear and accessories through a mix of associates, service in-store and unique specialty shops.
The company beat Wall Street expectations for revenue and earnings in the summer of 2020 as it reported online sales grew nearly 200% in the second quarter of the year.
DICK achieved full-year 2021 net sales of $12.29 billion and consolidated same-store sales growth of 26.5% and diluted earnings per share of $13.87 . It also reported non-GAAP earnings per diluted share of $15.70, up 142% and 157% respectively from 2020 earnings.
DICK returned $1.8 billion to shareholders in 2021, including $750 million in fourth-quarter share buybacks as well as an 11% increase in its quarterly dividend.
The company forecast full-year 2022 earnings per diluted share to be $9.96 and consolidated same-store sales to be around -4% flat.
Big 5 Sporting Goods Corp., headquartered in El Segundo, Calif., is a holding company that supports sporting goods retail operations. It sells athletic footwear, apparel and accessories, and outdoor and sports equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, outdoor recreation. winter and summer and roller sports.
The company posted record fiscal 2021 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 is also providing more than $69 million of capital to shareholders through its dividends and stock buybacks in fiscal 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 which include golf equipment and apparel, equipment, and 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 includes portable equipment. Its “others” segment refers to the development and sale of textile products under the Callaway, TravisMathew, OGIO and Jack Wolfskin brands.
Callaway Golf Co. revenue nearly doubled to over $3 billion, and the outperformance was driven by strong Topgolf sales. The company expects growth across all business segments in 2022.
Its full-year 2021 consolidated net revenue increased 97% year-over-year and fourth-quarter 2021 consolidated net revenue increased $337 million to $712 million , an increase of 90% compared to 2020. Adjusted EBITDA for the year 2021 increased by $281 million (+170% per year). -year-over-year) to $445 million and fourth quarter 2021 adjusted EBITDA increased $27 million (+214% from fourth quarter 2020) to $14 million.
The company has full-year 2022 revenue guidance of $3,780-3,820 million and adjusted EBITDA guidance of $490-515 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 the Sierra segment. The Black Diamond segment designs, manufactures and markets outdoor equipment and apparel for climbing, mountaineering, hiking, skiing and other year-round outdoor recreation activities. The Sierra segment produces bullets and ammunition for rifles and pistols.
For Clarus Corp., sales in the fourth quarter of 2021 increased 56% year over year to a record $118.2 million and sales for the full year of 2021 increased by 68% to reach a record $375.8 million. The company further expects full-year 2022 sales to exceed $470 million and adjusted EBITDA to reach $78 million. The company also expects full-year 2022 free cash flow of $50 million to $60 million.
Sporting Goods Stocks for the Win
Parents will never stop needing sports equipment for children’s sporting adventures and to be honest, sporting goods will never go out of style. Investigate all the options among several sporting goods stocks in order to put the right ones in your portfolio.