Topline
Dick’s Sporting Goods’ stock sank more than 16% in premarket trading Tuesday, pacing its worst loss in years after the firm became the latest sports retailer to report weaker-than-expected earnings while citing a “challenging” U.S. market.
The sports retailer cut its profit outlook amid a “challenging” market.
Getty Images
Key Facts
Shares of Dick’s plunged 16.9% to just under $149 in early trading Tuesday, putting the stock on track for its worst intraday loss since Aug. 22, 2023 (down 24.1%).
Dick’s on Tuesday reported quarterly revenue of $5.59 billion and earnings per share of $3.53, falling well below consensus analyst projections of $5.64 billion and $3.53, respectively, according to FactSet data.
The retailer lowered its outlook for Foot Locker sales after reporting a 3.6% decline in comparable sales, with projections for the footwear retailer’s sales to now drop 2%, and Dick’’s lowered its overall net sales outlook for the year to between $22.1 billion and $22.4 billion, down from $21.9 billion and $22.2 billion.
In its decision to cut projections, Dick’s cited an “challenging athletic footwear and apparel marketplace,” and CEO Lauren Hobart said in a statement that while the firm was “taking a more cautious view, it was still “highly confident” in the strength of its business and the “long-term opportunity” at Foot Locker.
big number
10.4%. That’s how much Dick’s shares have declined this year before Tuesday’s slump.
surprising fact
JD Sports, a London-traded sports retailer, saw its shares drop more than 13% last week after reporting a nearly 7% decline in North America sales. The retailer attributed the decline to “weaker core sentiment, a slower quarter for high-heat footwear product” and “deferred” back-to-school demand.
key background
Dick’s bought Foot Locker for more than $2 billion last year as part of a broader strategy to expand internationally and compete in the athletic footwear market. That deal has since weighed on the retailer’s bottom line, however, and Dick’s last year reported nearly $100 million in charges related to the transaction, including more than $42 million to clear through sale inventory.
tangent
Miniso, a Chinese lifestyle brand that once branded itself as Japan-inspired, was the fastest-growing retailer in the U.S. this last year, according to the National Retail Federation. Miniso posted roughly 53% sales growth in the U.S., outpacing Dick’s, which ranked second and appeared on the NRF’s rankings for the first time.
Leave a comment