The retail industry continues to see bad reports as Dick’s Sporting Goods is the latest to give bleak news. The sporting goods retailer gave their latest earnings report and guidance, which led to plunging stock prices. In addition, it caused one of the brands they blamed for slumping sales to also sink on the market a bit.
A Business Insider report on Wednesday (Aug. 29) indicated that Dick’s reported $1.20 a share earnings for the second quarter. That was much better than the surveyed Wall Street analysts who estimated $1.06 per share. However, the analysts had estimated sales of $2.23 billion for the retailer. Dick’s missed that mark, coming in with just $2.18 billion. It was also expected that comparable sales would drop by 0.8 percent, but Dick’s indicated they fell by 1.9 percent.
Through Tuesday, Dick’s stock shares were up 13 percent for the year. Due to the sour news, the company’s stock (DKS) was down by as much as 14 percent in pre-market trading on Wednesday. The price had closed at $36.39 on Tuesday but was showing a drop of about $4 ahead of the market opening on Wednesday. Two hours after the open, it was only down about $2, or 5 percent.
However, Dick’s wasn’t the only stock that was hurt by their latest report. One of the brands they carry, Under Armour, also felt the effect as Dick’s cited slumping sales of the brand in their report. Dick’s CEO said in the earnings release that his company “experienced continued significant declines” in the brand’s sales because “of their decision to expand distribution.” The stock slid a slight bit on the news, down 1.35 percent to 19.04 as of Wednesday morning trading. Shares of the sports apparel company are up about 29 percent this year.
Also during Wednesday’s report, Dick’s raised their guidance in terms of “full-year earnings per diluted share.” Analysts had estimated it to be $3.09 per share with Dick’s saying guidance is between $3.02 and $3.20. However, the latest report comes as other companies including Victoria’s Secret have reported slumping sales. It possibly indicates the impacts of online retailers causing competitive issues for longtime brands or companies.