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Dick's (DKS) Stock Dives To New 52-Week Low, Sports World Sinks

Benjamin Rains

Dick's Sporting Goods DKS stock sunk to a new 52-week low on Thursday, less than a week before the struggling sporting goods retailer is set to report its second-quarter earnings.

Other retailers, including industry powers and sporting goods chains, have already reported rough second-quarter results. Now, investors are preemptively dumping Dick’s as the e-commerce squeeze seems to be in full effect.

Last week, outdoor sporting retailer Cabela’s CAB posted earnings of $0.53 a share, which missed the Zacks Consensus Estimate of $0.57 per share and marked a 10.2% year-over-year decline. The company also fell short of revenue targets and dipped 4.2% from the year-ago period, due in part to a 9.3% decline in comparable store sales.

Today, citing the decline at Cabela’s, UBS analyst Michael Lasser remained cautious about Dick’s ahead of its earning report.

“While DKS probably benefitted from fewer competing stores in 2Q, we think there were offsets that weighed on its same-store sales,” Lasser wrote in a Thursday note. “DKS has had a lot going on, creating the potential for distractions due to the TSA and Golfsmith conversions, the Second Skin launch, vendor consolidation and management turnover… Still, it should be better positioned than other sporting goods retailers to weather the storm.”

Last quarter, Dick’s earnings jumped 8% year-over-year to $0.54 a share. The retailer’s revenues increased by 9.9% to $1.8 billion, but sales fell below our Zacks Consensus Estimate. However, consolidated same-store sales climbed 2.4% from the previous year.

Those first-quarter numbers don’t scream looming disaster for Dick’s on their face, but recent earning estimate revisions, spurred by slow overall growth, resulted in the company’s full-year Zacks Consensus Estimate for earnings dropping to $3.67 from $3.71 a share. On top of that, our consensus estimate for the company’s fiscal 2018 earnings has fallen from $4.08 to $3.97 per share.

The Pittsburgh-based retailer faces less direct brick-and-mortar sporting goods competition today, but online retailer Amazon AMZN) has sapped some of the company’s moneymaking power.

Shares of the sporting goods chain plummeted over 7% on Thursday to reach a new 52-week intraday trading low of $33.49 a share. Dick’s is currently a Zacks Rank #4 (Sell). The company is set to report its second quarter earnings results on August 15.

Sports Industry Down

Macy’s (M) and other retailers’ shaky second-quarter earnings reports spurred Thursday’s massive retail meltdown, which hit the sporting goods world hard as well (also read: Retail Earnings Roundup: Macy's, Kohl's, Dillard's Plummet).

Sporting goods retail peers Hibbett Sports HIBB and Big 5 Sporting Goods BGFV both saw their stock prices fall over 3% on Thursday. Shares of Finish Line FINL dipped 2.35%, while Foot Locker FL dropped by 1.35%.

The brands that these sports retailers sell have also been dragged down. Shares of Under Armour UAA and Adidas AG ADDYY both sunk by around 2%. Nike NKE and Columbia Sportswear COLM stock also fell around 1%.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Foot Locker, Inc. (FL) : Free Stock Analysis Report
The Finish Line, Inc. (FINL) : Free Stock Analysis Report
Big 5 Sporting Goods Corporation (BGFV) : Free Stock Analysis Report
Cabela's Inc (CAB) : Free Stock Analysis Report
Dick's Sporting Goods Inc (DKS) : Free Stock Analysis Report
Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
Nike, Inc. (NKE) : Free Stock Analysis Report
Adidas AG (ADDYY) : Free Stock Analysis Report
Columbia Sportswear Company (COLM) : Free Stock Analysis Report
Under Armour, Inc. (UAA) : Free Stock Analysis Report
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