Dick's Sporting Goods falls after cutting annual forecasts
DKS•Dick's cuts annual targets and misses Q2 estimates
Shares of sportswear retailer Dick's Sporting Goods, DKS.N, were down as much as 25.9% at a near three-year low of $132.90.
The stock was set for its worst one-session drop since August 2023 if losses held.
The company cut its annual targets and missed second-quarter estimates, as bloated inventory and heavy discounting weighed on its Foot Locker business while high fuel costs pressured margins.
Dick's now expects annual net sales between $21.9 billion and $22.2 billion, versus its previous forecast of $22.1 billion to $22.4 billion. It also sees adjusted EPS in the range of $11.00 to $12.00, compared with its prior forecast of $13.50 to $14.50.
Management says the market turned more promotional
"As the quarter progressed, conditions across portions of the athletic footwear and apparel marketplace became increasingly promotional, and we took action to remain competitively priced to protect and grow our leadership position," said CEO Ed Stack.
"Rebuilding of Foot Locker business will probably take longer than anticipated which means the division will create a severe drag on performance in the short term" - Neil Saunders, managing director of GlobalData.
Shares of other sportswear companies such as Nike NKE.N and Lululemon Athletica LULU.O fell 3% each. Under Armour UAA.N was down 2.7%, On Holding fell 2.02%, while Decker Outdoor was down about 4%.
