Dick's Sporting Goods (NYSE:DKS) stock was slapped 19% lower in Tuesday morning’s deals after quarterly results missed Wall Street expectations and the retailer downgraded its outlook with a profit warning.
It comes a day after Dick’s announced it would axe 250 corporate jobs as part of measures to reduce headcount by 1% worldwide.
Today, the sports retailer reported a significant 23% drop in second-quarter profits, whilst earnings per share undershot analyst expectations at US$2.82, versus consensus estimates of US$3.81.
Revenue landed at US$3.22 billion, slightly short of Wall Street forecasts of US$3.24 billion.
Net income was reported at US$244 million, down from US$318.5 million a year ago.
Dick’s pointed to sluggish sales in the ‘outdoors’ segment and a rise in theft among the reasons for the disappointing financial performance.
The retailer downgraded its outlook, setting new full-year earnings guidance of US$11.33 to US$12.13 per share, down from prior estimates of US$12.90 to US$13.80.
Chief executive Lauren Hobart, meanwhile, talked up “robust transaction growth” and noted market share gains.
“Within the quarter, sales accelerated significantly in July, and we remain confident in delivering positive comp sales for 2023," she said in a statement.
“While we posted another double-digit EBT margin, our Q2 profitability was short of our expectations due in large part to the impact of elevated inventory shrink, an increasingly serious issue impacting many retailers.
“Despite moderating our 2023 EPS outlook, the enthusiasm we have for our business and the confidence we have in our long-term growth opportunities have never been stronger."
In New York, Dick’s stock was down US$28.29 or 19.24% per share trading at US$118.75 ahead of Tuesday’s open.