As this earning’s season winds down, and we start looking ahead to the next one, we wanted to pass on a friendly reminder that all talk of “growth” from here on out is against insanely easy comps.
A research report from Deutsche Bank on former highflyer Dick’s Sporting Goods (DKS) reminded us of that.
We track a number of indicators intra quarter and they appear to indicate better trends this
quarter compared to last. We also note that, although DKS 3Q comparison of down 2.8% is
a bit more challenging than the 3.7% comparison in 2Q, the two-year stacked comparison is
actually much easier (Figure 1). Simply put, we believe that DKS actually has a pretty easy
comparison in 3Q. So, putting together the industry trends with the easier comparison, we
believe that DKS comps should be better in 3Q09 than they were in 2Q09, when comps fell
4.1%. This leads to our increase in comp estimates for the quarter.