On the heels of a disappointing Q2 finish, Dick’s Sporting Goods Inc.’s management said it plans to ramp up discounts and promotions in a bid to excite shoppers.
Shares of the sporting goods seller have been plummeting throughout the morning and remained in the red nearly 19 percent as of 11 a.m. ET.
The company posted Q2 profits of $112 million, or $1.03 per diluted share, a 23 percent improvement over the previous year. But on an adjusted basis, earnings per diluted share, at 96 cents, fell short of analysts’ bets of $1.01.
Sales also increased 9.6 percent during the period to $2.2 billion, which was in line with forecasts. But same-store sales improved just 0.1 percent year-over-year, a significant miss on Wall Street’s estimated gain of 1.4 percent, as well as the company’s own forecast calling for an increase of 2 percent to 3 percent.
Chairman and CEO Edward Stack blamed some of the softness in the period on declines in the hunting, licensed and athletic apparel categories.
“By design, we will be more promotional and increase our marketing efforts for the remainder of the year, as we will aggressively protect our market share,” Stack said. “We have updated our outlook to reflect these investments. We continue to believe retail disruption creates opportunities for us as we look long-term.“
To that end, the company has lowered its earnings forecasts for the fiscal year. Dick’s now anticipates reporting diluted EPS in the range of $2.85 to $3.05. Adjusted diluted EPS is expected in the range of $2.80 to $3.
Consolidated same-store sales are forecast to be in the range of approximately flat to a low-single-digit decline, compared with an increase of 3.5 percent in 2016.