09:05 AM EDT, 04/04/2025 (MT Newswires) -- Dick's Sporting Goods (DKS) is expected to become even "more essential" for brands to partner with moving forward, as macroeconomic uncertainties are likely to be less impactful on the company's affluent consumer base, Truist Securities said in a Friday client note.

Footwear brands are allocating more differentiated assortments to the athletic goods retailer, which has made "meaningful upgrades" to attract customers, according to the brokerage. The company has been able to generate robust traffic, grow average selling prices and expand margins, while its competitors continue to face earnings and revenue pressure, Truist said.

On Wednesday, US President Donald Trump announced sweeping new reciprocal tariffs on imports from several nations, including China and Japan. A 10% base tariff rate takes effect for all countries on Saturday, though there will be additional duties that vary by country.

Shares of Dick's continued to lose ground in premarket activity Friday after dropping by more than 12% as of the close of Thursday's trading session. However, Truist said it remains "bullish" on the retailer, with a buy rating on the stock.

"With macro uncertainty mounting, we believe that (Dick's) attractive customer base (and) premier shopping experience make it an even more essential partner for brands moving forward," Truist wrote in the note.

The brokerage forecasts incremental tariff pressure to be "relatively less impactful" to Dick's affluent and highly engaged customers, resulting in demand trends comparatively more stable. The retailer will have greater leverage in negotiations for favorable terms as partner brands seek to allocate more of their top merchandise to the company, according to Truist.

In March, Dick's issued a fiscal 2025 outlook for per-share earnings to come in between $13.80 and $14.40 and sales to be in a range of $13.6 billion to $13.9 billion. During a quarterly earnings call last month, Chief Financial Officer Navdeep Gupta told analysts that the company estimates its gross margin to increase about 75 basis points at the midpoint on a yearly basis, driven by the "quality" of its assortment.

Truist believes Dick's is better positioned than several other discretionary retailers with brands willing to share more of the incremental cost burden to maintain a strong relationship with the company, while its customer base is likely to absorb higher prices as a result of tariffs. A low double-digit price hike is likely to offset the majority of tariff-related headwinds to the retailer's gross margin, the brokerage said.