Shares of plunged by as much as 12 percent in premarket trading Wednesday morning after the retailer said it sold less merchandise during the second quarter than analysts were expecting.
Sales at Dick‘s Sporting Goods stores open for at least 12 months also tumbled by a bigger-than-expected 4 percent during the quarter ended Aug. 4, which was partly blamed on . The clothing and sneaker brand has been moving into more off-price channels, like , frustrating companies like Dick‘s that try to sell inventory at higher price points.
“As expected, sales were impacted by the strategic decisions we made regarding the slow growth, low margin hunt and electronics businesses, which accounted for nearly half of our comp decline,” CEO Ed Stack said in a statement. “In addition, we experienced continued significant declines in Under Armour sales as a result of their decision to expand distribution.”
Stack said he was confident sales would turn around as those challenges lessen.
Dick‘s raised its profit outlook for the full year and now expects to earn between $3.02 and $3.20 per share in 2018, up from a prior range of $2.92 to $3.12.
Here‘s what the sporting goods retailer reported for the second quarter compared with what Wall Street analysts polled by Thomson Reuters expected:
- Adjusted earnings per share: $1.20 vs. $1.06 expected
- Revenue: $2.18 billion vs. $2.24 billion expected
- Same-store sales: down 4 percent vs. a decline of 0.6 percent expected
Dick‘s said online sales increased 12 percent during the second quarter, boosted by some of its private-label brands.
This is a developing story. Please check back for updates.