Dick’s Sporting Goods beats Q3 but shares fall on Declining Outlook

Dick’s Sporting Goods Inc. (NYSE: DKS) reported its third quarter financial results and beat analysts’ estimates, but shares fell by almost 6 percent after open on Tuesday after the company had forecasted a decline for 2018.

The sporting retailer reported $1.94 billion in revenue, increasing 7.4 percent year over year, and beating analysts’ estimates by $60 million. The company reported an EPS of $0.30, but decreasing from $0.48 the previous year, and beating analysts’ estimates by $0.04.

Consolidated same store sales decreased 0.9 percent year over year, beating the company’s guidance of a low single digit decline. In the third quarter, consolidated same store sales increased 5.2 percent. The decline in sales was slightly offset by the company’s shift into e-Commerce business, as the segment increased by 16 percent.

But even with the shift into e-Commerce, Dick’s is still facing fierce competition against other businesses that heavily revolve around the digital market. The e-Commerce industry has been growing at a rapid rate, hurting physical retail locations.

“As expected, margins were under pressure in this highly promotional environment, but our strategy for this environment enabled us to continue to capture market share," said Edward W. Stack, Chairman and Chief Executive Officer.

But Stack reassures investors saying that in the future Dick’s see a  “tremendous opportunity.” Stack says that the company plans to make investments into the business to offset the short-term negative impacts, such as focusing more into e-Commerce and in store technologies.

Even with the reassurance provided by Stack, he still expects a 20 percent EPS decrease in 2018.

As for the rest of the fiscal year, Dick’s is expecting an EPS in the range of $2.92 to $3.04. The company expects consolidated same store sales to be in the range of flat to low single-digit decline.

Dick’s shares have plummeted 54 percent this year now.

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