Dick's Sporting Goods beats sales forecasts as earnings fall in third-quarter report
During premarket trading, shares of the sporting goods store fell by 3%
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Shares of Dick Sporting Goods Inc. fell during premarket trading on Tuesday morning despite releasing a third-quarter report showing a boost in sales but lower earnings.
The company estimates that comparable store sales are expected to decline from 1.5% to 3% by the end of this year. The prior forecasts for earnings were estimated at $10 but are now in the range of $11.50 to $12.10.
Overall net sales for the third quarter increased by 7.7% compared to last year's quarter to $3 billion. The sporting goods store reported profits of $228 million, equivalent to $2.45 a share, declining from 2021 third quarter profits of $2.78 per share with $317 million in profits.
Comparable-store sales increased by 6.5% when prior estimates forecasted a decline of 3.1% for this period.
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Dick's Sporting Good's released its third-quarter report on Tuesday showing a boost in sales but lower earnings. (iStock)
Earlier in the year, company executives had revised its sales and profit forecasts due to persistent inflation in the U.S. economy and a slowdown of consumer demand.
The sporting goods store's inventory increased by 35% to approximately $3.4 billion during this period as the company prepares for the holiday shopping season, which is expected to boost profits.
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"Our Q3 results demonstrate the continued success and strength of our transformational journey," said Ed Stack, the company's executive chairman. "Our strategies continue to work as we reimagine the athlete experience and offer a compelling and differentiated assortment as well as a best-in-class omni-channel ecosystem."
However, the company did fall short of its gross margin estimate average of 34.9%, falling to 34.2%. The store claims that the financial forecasts were revised due to caution surrounding the discretionary spending of the average consumer.