re: #277 The Ghost of a Flea

Dick’s Sporting Goods Stock Falls After Earnings

Dick’s Sporting Goods (DKS) stock is down 23% after a disappointing earning report.

Sales for the second quarter came in at $3.22 billion, missing estimates of $3.24 billion. That drove earnings per share to miss estimates, with the result coming in at $2.82 versus expectations of $3.81.

To make matters worse, the company lowered its outlook for full-year earnings to $11.90 a share at the midpoint of its guidance range, compared with previous midpoint of $13.35. The company is dealing with both weakness in consumer spending, as interest rates remain high, and theft of inventory at its stores.

The outlook, combined with the fact that the stock had rallied more than 20% for the year into earnings, meant the stock could only do one thing—drop.

Dick’s has about 93 million shares of stock. A downturned outlook amounts to 134 million less in earnings for shareholders combined.

If we slice that 134 million into a pie, how much do you think is the product of a generally weak consumption market…people don’t have the cash and prices are basic needs are higher than they’ve been in ages…versus theft?