Dick's Sporting Goods reported better-than-expected fiscal first-quarter results early Tuesday, but became the latest retailer to slash full-year earnings guidance amid weaker economic conditions. DKS stock sold off at the open, but then rebounded.
Dick's Earnings
Estimates: Analysts had forecast $2.52 per share, on revenue of $2.6 billion. Wall Street expected same-store sales to decrease by 11%.
Results: Dick's reported earnings fell 25% to $2.85 per share. Net sales sank 7% to $2.7 billion. Same-store sales declined 8.4%.
Outlook: Dick's Sporting Goods sees full-year adjusted earnings of $9.15-$11.70 per share, well below analysts' estimate of $12.57. Dick's had previously believed a range of $11.70-$13.10 was attainable. The company blamed this change on "evolving macroeconomic conditions."
Stock: Dick's Sporting Goods stock fell to 63.45 soon after the open — after being down more than 20% in premarket trading. That was the lowest price since January 2021. But shares rebounded, up 9.7% to 78.14 at closing on the stock market today.
DKS stock is down more than 15% so far in May and well off the November all-time high of 142.78.
Dick's revised forecast comes after mega retailers Walmart and Target both missed earnings estimates and cut full-year EPS targets last week. Ross Stores and Abercrombie & Fitch also have reported grim guidance in the past week.
Retailers are grappling with increased costs for goods, shipping and labor. They are reporting large inventories, as consumers shift spending habits and look to save money.
Dick's reported inventory levels as of April 30 were up 40% compared to a year earlier.
CEO Lauren Hobart said during a call with analysts Wednesday, that she is pleased with the first-quarter results while admitting that freight and labor costs cut into the company's margins. Despite those challenges, she said the sporting goods retailer will "adapt quickly and execute through uncertain macroeconomic conditions."
Hobart added she is confident in Dick's long term profitability, and believes post-pandemic consumers will be putting a premium on the type of goods the company offers.
"We actually think in these types of times, people need to get outside. They need to be active. They want to be with their families, and we are well positioned to serve the needs of these athletes," she said.
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