DKS Rises Despite Disappointing Earnings Report

The company's e-commerce sales, meanwhile, more than tripled

Assistant Editor
Jun 2, 2020 at 10:54 AM
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Sports retailer Dick's Sporting Goods (NYSE:DKS) entered the earnings confessional this morning, reporting first-quarter losses and revenue that came in lower than analysts' estimates. Same-store sales missed estimates as well, falling nearly 30%, though its e-commerce sales more than tripled. As a result, the shares of DKS are up 1.4% to trade at $36.94 this morning.

During the broader market's mid-March pullback, Dick's Sporting Goods stock hit an 11-year low of $13.46, though the stock has added over 175% since then, with a 71.5% quarterly gain. Now, DKS is looking to take out its 160-day moving average for the first time in over three months. 

Currently, analysts are lukewarm on the equity. Of the 18 in coverage, 12 sport a tepid "hold." Meanwhile, five rate it a "strong buy" and one says "strong sell." Plus, the 12-month consensus price target of $32.39 is a conservative 13.4% discount to current levels, and could signal some price-target hikes in the near future.

In the wake of this disappointing earnings report, 3,796 calls and 2,452 puts have changed hands today so far -- seven times the average intraday amount, with volume running in the 98th percentile of its annual range. Leading the charge is the weekly 6/5 37-strike call, followed closely by the 40-strike call from the same series.

Meanwhile, shorts are piling on the sporting goods stock, up 47.5% in the last two reporting periods. The 14.38 million shares now sold short represent almost a quarter of the stock's available float, and would take almost a week to cover at its average daily pace of trading. 

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