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Dick's Sporting Goods (DKS) plunged on Tuesday after announcing plans to stop selling firearms in 125 stores and missed comparable sales estimates. The sports equipment retailer also reported low profitability for the current fiscal year after Foot Locker (FL) reported an eruption in the fourth quarter earlier this month.
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Dick's Winnings Sporting Goods
estimates: Wall Street expects earnings per share of Dick's Sporting Goods to drop 12 percent to $ 1.07, while business revenue drops 7 percent to $ 2.48 billion. dollars, according to Zacks Investment Research. According to Consensus Metrix, same-store sales fell 3.3%.
Results: Dick's Sporting Goods has announced a flat profit of $ 1.22 per share. Revenues dropped to $ 2.49 billion. Same store sales decreased 3.7% or 2.2% on a time-shifted basis.
Perspective: Dick sees the BPA for the year between 3.15 and 3.35 dollars. Analysts were expecting a profit of 3.38 USD for Dick's Sporting Goods. Dick's also sees flat compositions up to 2%.
In addition, the company will no longer sell hunting products, including rifles and ammunition, at retail outlets, but will instead sell licensed sporting goods and outdoor recreation equipment. The company has already deleted the category in 10 out of over 700 stores.
CEO Ed Stack said during the call for results that sales of products compiled in these stores had increased in the last quarter, while sales had fallen overall.
The chain's sales dropped sharply last year as the company stopped selling assault rifles and high-capacity magazines following a high school shootout in Parkland, Florida.
Stock of Dick sporting goods
Shares fell 11% to 34.65 on the stock market today. MarketSmith's analysis reveals that Dick's stock of Sporting Goods has gone from 15 to 15 weeks in a shopping zone. The shares briefly cleared the point of purchase by 39.85 points on March 1st.
Among the related stocks, the smallest retailer of sports goods Hibbett (HIBB) sank by 7%. Foot Locker, a specialist in sports shoes in shopping centers, saw its turnover climb by 10% in the fourth quarter, down 1.4%. Head of sportswear Nike (NKE) and Under protection (UAA) are down 0.8% and 3%, respectively.
The stock of Dick's Sporting Goods has made mixed signals, with an unstable relative strength and a volume of transactions well below average.
The stock has a rather good composite rating of 81, and the stock verification tool shows an anemic growth rate of 4% of earnings over three years. However, the stock was looking to post a fifth straight quarter of earnings acceleration ahead of Tuesday's results. Dick's technical inventories also show positive technical signs: it now has a relative strength index of 79 and thus positioned 10% above its 50-day moving average.
Cautious analyst on the stock of Dick's sporting goods
Wedbush Securities analyst Christopher Svezia has taken a cautious tone on rising revenues. He rated the title as neutral with a course goal of 38.
He said that while certain factors should lead to stagnant or slightly positive rates of return and a slight increase in gross margin throughout the year, the performance of its stock market remains subject to risks.
"These will not be enough to leverage SG & A / Occupancy against key investments (digital, team sports, private label, supply chain / fulfillment)", said the analyst in a research note. "Although we are above consensus EPS (US $ 3.50 vs. US $ 3.34), mainly due to higher product margins, there is still a need to improve the visibility of sustainable positive results and further expansion. continue the margin in order to become more constructive on the shares. "
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