Dick's Q2 Beat and Special Dividends Lift Retail Sector ETFs

Dicks Sporting Goods Inc. (NYSE: DKS) surged on record profits and a special dividends announcement on Wednesday, lifting retail sector-specific exchange traded funds.

The First Trust Nasdaq Retail ETF (FTXD) also gained 1.9% on Wednesday.

Meanwhile, Dicks Sporting Goods shares jumped 14.0% on Wednesday. DKS makes up 4.2% of FTXD’s underlying portfolio.

The retailer revealed sales growth of 21% for the fiscal second quarter and upgraded its outlook for the year, CNBC reports. Sales over the second quarter were 45% higher compared to the same quarter of 2019.

Dicks Sporting Goods has enjoyed soaring sales numbers over the coronavirus pandemic as customers bought workout cloths, sneakers, golf clubs, and other outdoor equipment to spend new-found extra time outside.

CEO Lauren Hobart also attributed the outperformance to strong consumer demand, more e-commerce sales, and improved experiences for athletes.

Dick’s Executive Chairman Ed Stack stated that the retailer is investing “to reimagine the athlete experience in our core business and with new concepts.”

The retailer also announced plans to reward investors with a special dividend after the record-setting run in quarterly beats. The board of directors authorized a one-time special payment of $5.50 per share, which will give back over $475 million to shareholders, Fox Business reports. The board also raised quarterly dividends by 21% to 43.75 cents per share.

“We said 2021 was going to be the most transformational year in our history, and so far, it certainly has been,” Stack said.

Meanwhile, Nordstrom (NYSE: JWN) shares dragged on the retail segment after plunging 17.0% on Wednesday. JWN makes up 0.4% of FTXD’s portfolio.

Nordstrom stock declined even though the retailer’s July quarter results beat expectations and it raised its full-year outlook, Barron’s reports. However, its results were slower than other retailers, notably the higher bar set by Macy’s.

While second quarter sales at the department-store chain doubled year-over-year, they were still 6% below the 2019 level, whereas competitors like Macy’s Inc. and Kohl’s Corp. have posted more robust recovery rates, according to Bloomberg. JPMorgan Chase & Co. downgraded the company and argued that Nordstrom’s performance was “underwhelming.”

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