On August 15, Dick’s Sporting Goods (NYSE:$DKS) shares tumbled. Why? It all started after the retailer reported underwhelming results and lowered its guidance in its Q2 earnings report. As of 11:00 a.m. EDT, DKS stock was down 18.5%.
Dicks Sporting Goods – is the nation’s largest sporting goods retailer – announced that same-store sales increased 0.1%, which is well below the company’s forecast of 2% to 3%.
Meanwhile, overall revenue grew 9.6% to $2.157 billion as total store count grew by 12% over the past year to 833, and online sales improved 19%. The top-line result was marginally below estimates at $2.161 billion.
In regards to the bottom line, adjusted EPS increased from $0.82 to $0.96. However, that missed the company’s guidance of $1.02 to $1.07.
It seems the news weighed on suppliers like Nike (NYSE:$NKE) and Under Armor (NYSE:$UAA), stocks that were all down 2% or more today. This is a sign that investors see ongoing weakness in the sector. Dick’s CEO Edward Stack confirmed this mentality by calling the current environment, “a very competitive and dynamic marketplace.”
What Will the Future Hold?
Dick’s lowered its 2017 earnings per share guidance. Now, the company expects an adjusted per-share profit of $2.80 to $3, which is down from its previous estimate of $3.65 to $3.75. Additionally, Dick’s lowered its comparable sales outlook from 1% to 3% growth for 2017.
Taking the slashed guidance into account, today’s slide should not come as a total surprise to investors.
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