Dick’s Sporting Goods Inc (DKS) cuts earnings guidance after sales dip

Highlights:

• Dick’s Sporting Goods, Inc.’s (NYSE: DKS) Q1 2022 sales declined on macroeconomic factors.
• DKS reported a first-quarter net sales of US$2.7 billion.
• The shares of Dick’s slumped 5.8% in morning trading on Wednesday.

Dick’s Sporting Goods, Inc.’s (NYSE: DKS) Q1 2022 results on Wednesday showed a decline in its sales.

The biggest sporting goods retailer in the US posted earnings per diluted share of US$2.47. The company’s non-GAAP earnings per diluted share were US$2.85.

DKS reported a lower-than-expected first-quarter net sales of US$2.7 billion, down from US$2.9 billion in the same quarter last year.

The same-store sales of the full line omnichannel sports goods company declined 8.4% in the quarter, whereas its overall sales in the year-ago quarter were down 7.5%.

This forced the company to lower its projection for the rest of the year. Dick’s said that its same-store sales could fall as much as 8% in 2022.

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Glum earnings due to unfavorable conditions, says DKS 

The sports equipment chain iterated that its guidance cut is a fallout of the present macroeconomic conditions.

Dick’s Sporting Goods has joined other big retail companies that are feeling the pinch of gloomy market sentiment.

Lauren Hobart, President, and CEO of DSK said the company is confident in its ability “to adapt quickly and execute through uncertain macroeconomic conditions.” The company has a unique and powerful position in the marketplace to deliver long-term sales and earnings growth, added Hobart.

The whole retail sector is dealing with a decline in consumer spending that marred the first quarter of 2022. Inflation has cornered consumers and shrank margins of the sector, which is already weighed down by supply chain disruptions and rising freight costs.

Quarterly Dividend:

Dick’s Sporting Goods’ board of directors on May 24, 2022, declared a quarterly dividend for its shareholders. The dividends of US$0.4875 per share will be paid in cash on June 24 to stockholders of record as of June 10 after market close.

Bottom line:

Shares of Dick’s Sporting slumped 5.8% in morning trading on Wednesday. Even big retailers like Walmart Inc. and Target Corp. have been hit by a major selloff of retail stocks. Retailers are taking the headwinds triggered by declining discretionary consumer spending.