Boston, MA 05/20/2014 (wallstreetpr) – Sports and Fitness Company, Dicks Sporting Goods Inc. (NYSE:DKS), is sinking in premarket trading session by a high of 15.82% after revealing substantial weaknesses in its golf and hunting division. The drop in early market trading session has also been attributed to lower than expected full year profit estimates and same store sales outlooks. The first quarter was marred by difficulties especially in golf and hunting categories despite the company anticipating modest improvements.
eCommerce Segment Offsetting Decline
Weaknesses in the two segments were, on the other hand, offset by continued modest growth in eCommerce with women apparel and youth athletic apparel showing significant improvement. ECommerce penetration stood at 7% of total sales compared to 5.8% that had been reported last year. During the first quarter, Dicks opened eight new sporting Goods Stores. Dick’s ended the quarter with 566 DICK’s Sporting Goods Stores with approximately 30.6 million square feet.
Dicks Sporting Goods Inc. (NYSE:DKS) closed the first quarter with $139 million in cash and cash equivalent, up from $114 million as of the end of the same quarter in 2013. Dick’s currently does not have any outstanding borrowing under its revolving fund which amounts to $500 million. Dicks has utilized its capital over the past twelve months to invest in Omni channel growth while also carrying out share repurchases and paying quarterly dividends.
Inventory Levels up by 12.8%
Inventory was up by 12.8% as of the end quarter compared to the first quarter of 2013. The increased levels demonstrate the company’s strategic growth in its new concepts. The company is plummeting in the stock exchange after revising its full year earnings from a high of between $3.03 and $3.08 to a low of between $2.75 and $2.85. The downgrade in estimates has been necessitated by the fact that the company anticipates challenges in the golf category to continue until late in the year.
Dick’s is planning to open eight new DICK’s Sporting Goods Stores and new Field & Stream store in the second quarter. Dicks Sporting Goods Inc. (NYSE:DKS) expects its second quarter Capital expenditures to be $360 million on a gross basis.
