Dick's Sporting Goods' stock sank more than 16% in premarket trading Tuesday, pacing its worst loss in years after the firm became the latest sports retailer to report weaker-than-expected earnings while citing a "challenging" U.S. market.
Shares of Dick's plunged 16.9% to just under $149 in early trading Tuesday, putting the stock on track for its worst intraday loss since Aug. 22, 2023 (down 24.1%).
Dick's on Tuesday reported quarterly revenue of $5.59 billion and earnings per share of $3.53, falling well below consensus analyst projections of $5.64 billion and $3.53, respectively, according to FactSet data.
The retailer lowered its outlook for Foot Locker sales after reporting a 3.6% decline in comparable sales, with projections for the footwear retailer's sales to now drop 2%, and Dick''s lowered its overall net sales outlook for the year to between $22.1 billion and $22.4 billion, down from $21.9 billion and $22.2 billion.
In its decision to cut projections, Dick's cited an "challenging athletic footwear and apparel marketplace," and CEO Lauren Hobart said in a statement that while the firm was "taking a more cautious view, it was still "highly confident" in the strength of its business and the "long-term opportunity" at Foot Locker.
10.4%. That's how much Dick's shares have declined this year before Tuesday's slump.
JD Sports, a London-traded sports retailer, saw its shares drop more than 13% last week after reporting a nearly 7% decline in North America sales. The retailer attributed the decline to "weaker core sentiment, a slower quarter for high-heat footwear product" and "deferred" back-to-school demand.
Dick's bought Foot Locker for more than $2 billion last year as part of a broader strategy to expand internationally and compete in the athletic footwear market. That deal has since weighed on the retailer's bottom line, however, and Dick's last year reported nearly $100 million in charges related to the transaction, including more than $42 million to clear through sale inventory.
Miniso, a Chinese lifestyle brand that once branded itself as Japan-inspired, was the fastest-growing retailer in the U.S. this last year, according to the National Retail Federation. Miniso posted roughly 53% sales growth in the U.S., outpacing Dick's, which ranked second and appeared on the NRF's rankings for the first time.
This Chinese Chain Beat Dick's And Costco To Become The Fastest-Growing Retailer In The U.S.
This article was originally published on Forbes.com