Summary
- Dick's Sporting Goods delivered solid 1Q19 results, but the guidance for the year left me scratching my head.
- I believe enough uncertainty exists over the financial results that the company might be able to deliver in 2019.
- To me, Foot Locker seems like a safer bet than DKS in the primarily brick-and-mortar sporting goods retail space.
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I'll be honest: Dick's Sporting Goods' (DKS) 1Q19 earnings report was hard to decipher. And the confusion seemed to be properly reflected in a stock that traded up +6% in pre-market hours and down -6% after the opening bell.
To be fair, the results of the quarter looked clean enough. Revenues of $1.92 billion topped the consensus by about $20 million, aided by flat comps that must have been a relief for shareholders - following three quarters of average 3.9% contraction in same-store sales.
Credit: Reveal Mobile
At play here is the one-year anniversary of the retailer's announced scaling back of its hunting business. While politics often get invoked when firearms become the subject of conversation, the move seems reasonable also from a business perspective since Dick's stores that carry hunting gear have been reported to underperform sales in this category.
