Stephanie Link Adds to Dick's Sporting Goods Stake on Strong Core Business

Dick's Sporting Goods Investment Rationale

• 📈 Dick's Sporting Goods stock is down 11% from its highs, presenting a buying opportunity.
• 🎯 The company's core business is humming, with same-store sales at 5.7% despite a tough comparison to the previous year's 6.4%.
• 🚀 Link anticipates upside from the continued strength of the core business and a turnaround of the Foot Locker franchise.
• 💡 The company is actively right-sizing its Foot Locker acquisition and improving inventory management.

Consumer Spending Trends

• 💰 Consumer discretionary spending is a favored sector due to positive data points.
• 📊 Retail sales grew by 5.7% last month, and credit card data shows accelerating spending.
• 🛍️ The consumer is expected to show up for the holiday season, supporting retail performance.

Potential for GAP Investment

• 📉 Stephanie Link is watching GAP and would consider buying on a dip, ideally a 3-5% decline.
• 💰 The stock is trading at an attractive valuation of 11 times forward estimates, similar to Dick's Sporting Goods.
• ✅ GAP is delivering on comparable store sales across most brands, with Old Navy and Gap brands driving 80% of revenue.
• ⚠️ While the athleisure segment (including Athleta) is struggling, Link believes GAP will eventually turn that around.