Dick’s Sport Goods stock sinks 25% on Q2 results: buy the dip?

August 22, 2023 10:22 AM PDT | By Invezz

Dick’s Sport Goods stock sinks 25% on Q2 results: buy the dip? — Image source: Invezz

Is it worth buying Dick’s Sporting Goods stock?

The sporting goods retailer now forecasts its comparable sales to remain flat or inch up 2.0% this year – roughly in line with a 1.0% increase that the analysts had called for.

Dick’s lowered its outlook for adjusted per-share earnings as well to between $11.50 and $12.30 in fiscal 2023. According to CFRA analyst Zachary Warring:

Dick’s is a top pick in retail even after a weak quarter as the company continues to gain market share, generate strong free cash flow, and repurchase shares aggressively.

He lowered his price objective on Dick’s Sporting Goods stock today to $150 that still suggests over 30% upside from here.

Dick’s Sporting Goods Q2 earnings snapshot

Net income printed at $244 million versus the year $319 million
Per-share earnings also declined from $3.25 to $2.82
Adjusted EPS also came in at $2.82 as per the press release
Sales jumped 3.6% on year-over-year basis to $3.22 billion
Consensus was $3.81 a share on $3.23 billion in revenues

Dick’s Sporting Goods stock is down also because same-store sales were up 1.8% in the recently concluded quarter – also less than expected. Its CEO Lauren Hobart said today in a press release:

Our Q2 profitability was short of expectations due in large part to the impact of elevated inventory shrink, an increasingly serious issue impacting many retailers.

The stock market news arrives only a day after the Pennsylvania-based company announced a layoff to cut costs.

The post Dick’s Sport Goods stock sinks 25% on Q2 results: buy the dip? appeared first on Invezz.

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