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Dicks Sporting Goods (DKS) Beat Earnings, But That’s Not What Matters

Ollie Martin - AskTraders News writer
Ollie Martin trader
Updated 25 May 2022

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Key points:

  • In the current climate, investors are looking towards FY outlook
  • EPS came in at $2.85 against $2.48 expected, revenue hit $2.7B on a consensus of $2.59B
  • Cut expected earnings to between $9.15 and $11.70 per share

Currently, bullish sentiment is struggling to settle under the wider macro environment. As the economy struggles with inflation, interest rates and supply chain woes, earnings releases are becoming much more future-focused. Company performance is still an indicator, but more and more investors are looking towards the outlook for a better indicator of how management intends to battle long-term headwinds. Amid a mixed time for retail, Dicks Sporting Goods (NYSE: DKS) posted a solid first-quarter earnings report, only to crush positive sentiment by slashing its full year forecast. 

The sporting retailer posted a surprise beat on a backdrop of earnings misses, pointing to strong demand for golf clubs, soccer gear and leading-brand athletic apparel from Nike and Adidas. The company’s Q1 earnings were pegged at $2.85 against the Street consensus of $2.48. Revenue was also strong, coming in at $2.7B versus an expectation of $2.59B. 

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Whilst normally this would be enough for buyers, none of it mattered. Investors sole concern is for strategies revolving around inflation and supply challenges, but due to the looming cloud of uncertainty, companies are cutting guidance – including Dicks Sporting Goods, who cut its expected earnings to between $9.15 and $11.70 per share, compared with the previous range of between $11.70 and $13.10. Analysts were looking for EPS of $12.56. 

Dicks is the latest on the retailer cutback path, following projection adjustments from Target, Walmart and Kohls, with Home Depot the only large retailer appearing to weather headwinds due to resilient consumer trends. Shares are falling all over the place as company’s prepare for a difficult year. 

Ollie Martin - AskTraders News writer
Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.