12:03 PM EDT, 03/11/2024 (MT Newswires) -- Dick's Sporting Goods (DKS) is expected to see positive performance indicators for Q4, including strong comparable sales and earnings per share driven by improved sales and cost-reduction efforts, Wedbush said in a note on Monday.

According to Wedbush, the company is increasing its market share and benefitting from its business optimization plan, while managing inventories and promotions effectively to support gross margins.

The company is also likely to be able to control selling, general and administrative expenses growth to low single-digits in 2024 thereby increasing its earnings, Wedbush said.

The note also said that the company's deleverage will be affected by continued pressure on wages and investments in growth initiatives, but these effects may be mitigated by the benefits stemming from its business optimization plan, which resulted in layoffs and charges during Q3 2023.

Wedbush said it expects the company to gain market share this year through store expansions and tech investments, as well as continued success in pandemic-benefitting sports, including team sports, golf and pickleball, boosted by the Moosejaw acquisition.

Dick's Sporting Goods may also attain low single-digit comparable sales growth in the medium term with sport stores conversions and relocations, diverse and elevated merchandising assortment, strong supply chain, technological capabilities and ScoreCard loyalty program, Wedbush added.

The firm also said it expects the company's 2024 margins to improve because of year-over-year benefits to gross margins particularly due to clearance activity in H1 2023 and operational expenses growing in line with sales.

Dick's Sporting Goods is expected to release its financial results on Thursday.

Wedbush reiterates its neutral rating on the stock, with a price target of $160.

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