DKS Stock Slips Ahead Of Earnings After Guidance Cut
Dick’s sporting goods (DKS) will report second quarter results on Tuesday. The Pennsylvania-based retailer lowered its full-year guidance in May amid rising costs of goods and services. DKS shares traded lower on Monday.
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Dick’s is the latest major retailer to report earnings in recent weeks, giving investors clues as to how consumer spending habits are adjusting to inflationary pressures.
Last week, Walmart (WMT) beat earnings estimates target (TGT) reported mixed financial results for the second quarter, missing revenue but meeting revenue guidance.
Off-Price Specialist TJX (TJX) missed on sales while both Ross stores (RUST) and cabbage (KSS) lowered the guideline on Thursday. The industry broadly reflected a focus on consumers as prices pushed up across the board.
BJ’s Wholesale Club (BK) also topped earnings views on Thursday as the discount giant shrugged off concerns that inflation would keep consumers out.
Featuring Dick’s Sporting Goods on Tuesdays and sporting goods competitor Hibbett (HIBB) reports results on Thursday morning, this is another important week for retailers.
Dick’s Sports Goods Earnings; DKS share
estimates: Wall Street is forecasting second-quarter earnings to fall 29% to $3.59 per share. Revenue is expected to fall 6% to $3 billion.
Results: Check Tuesday before the market opens.
DKS shares fell 1.45% to 109.44 during trading on Monday. Shares of Dick have risen steadily from a late-May low and have outperformed both their 10-week and 40-week moving averages.
In the first quarter, Dick’s Sporting Goods lowered its full-year earnings guidance given weak economic conditions. Dick’s earnings fell 25% to $2.85 per share. Net sales fell 7% to $2.7 billion. Same-store sales fell 8.4%.
Dick’s Sporting Goods revised its full-year earnings guidance to between $9.15 and $11.70 per share. The company had previously targeted $11.70 to $13.10.
Dick’s blamed this change on “evolving macroeconomic conditions,” while reported inventories at the end of the first quarter were up 40% year over year.
CEO Lauren Hobart told analysts that freight and labor costs are eating into the company’s margins. Despite those challenges, she said the sporting goods retailer will “adapt quickly and navigate through uncertain macroeconomic conditions.”
According to FactSet, analysts are forecasting full-year earnings per share of $10.94 and revenue of $11.8 billion. Same-store sales are expected to fall 4.4% year over year.
DKS stock has a composite rating of 83 out of 99. It has a Relative Strength Rating of 91, an IBD Stock Checkup exclusive gauge of stock price movements which sits at 99. The rating shows how a stock’s performance compares to all other stocks in the IBD database over the last 52 weeks. The EPS rating is 86.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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