Dick's Sporting Goods Shares Fall After Profit Trails Estimatesby
Chain lowers 2015 profit forecast on slowing sales growth
Shares of suppliers Under Armour and Nike also decline
Dick’s Sporting Goods Inc. fell the most in more than a year after posting third-quarter profit that trailed analysts’ estimates and cutting its annual earnings forecast. The retailer was hurt by slowing demand and warm weather that curtailed sales of seasonal merchandise.
Profit in the quarter through Oct. 31 was 45 cents a share, excluding some items, the Coraopolis, Pennsylvania-based company said Tuesday in a statement. Analysts estimated 46 cents, on average. Earnings this year will be $2.85 to $3 a share, Dick’s said. That’s down from a previous forecast of $3.13 to $3.21 and trails analysts’ $3.18 average projection.
Chief Executive Officer Edward Stack said sales were strong during the back-to-school shopping period, then slowed later in the quarter. Warm weather also hurt demand in more seasonal categories, he said. While revenue rose 7.6 percent to $1.64 billion, that trailed the $1.66 billion analysts expected.
The shares sank 9.4 percent to $36.96 on Tuesday, the biggest plunge since May 2014. Dick’s already had slid 18 percent this year through Monday.
The lackluster forecast, which included a projection that fourth-quarter comparable-store sales may decline as much as 2 percent, also weighed on the shares of suppliers Under Armour Inc. and Nike Inc. Under Armour, which counts Dick’s as its biggest customer, fell 5.6 percent to $84.99. Nike declined 0.7 percent to $122.58.