After falling short of analyst estimates on same store sales (2.4% growth vs. 3.5% estimated) and the announcement of a profit warning, Dick’s Sporting Goods (DKS) shares dropped more than 13% (22.71% YTD), for the company’s biggest one-day decline in 3 years. DKS attributed the loss to a “challenging retail environment”, yet announced it would be moving ahead with plans to open 43 more stores this year. The plan would seem counter-intuitive to the announced goals of cutting costs and streamlining operations. On a positive note, CEO Edward Stack said the company is pleased with the performance of its newly relaunched e-commerce site.
Dick’s Sporting Goods’ stock tumbles on weak sales, tracking for biggest 1-day drop in 3 years
Howie Long-Short: You have to appreciate the aggressive poker strategy Stack is playing here. Doubling down and pushing all his chips to the middle of the table. Unfortunately for stock holders, he’s gambling with your money.
Fan Marino: NKE selling direct to consumer on Amazon is going to be the final nail in the coffin for a sporting goods industry that relies heavily on the wholesale revenue generated by NKE goods.
