Aug 25 (Reuters) – Dick’s Sporting Goods cut its full-year sales and profit forecasts on Tuesday, as consumers in the U.S. pulled back spending on pricey athletic footwear and apparel, sending its shares down 17% in premarket trading.
U.S. consumers have been seen putting off expensive purchases, making discretionary spending more selective as they direct most of their spending towards essentials due to higher gas and food prices.
“Not only were there fewer launches in the second quarter, but those launches performed below both industry and our expectations,” the company’s executive chairman, Ed Stack, said, adding that the company is taking a more cautious view of the rest of the year.
Dick’s Sporting Goods said it faced heavy discounts for athletic footwear and apparel in the quarter, forcing it to increase promotions as well to remain competitive.
“This environment had a more significant impact on the Foot Locker business given its greater exposure to legacy footwear silhouettes and greater dependence on footwear launch and retro product,” Stack added.
For the 13 weeks ended August 1, which included the FIFA World Cup held in the U.S., the company reported net sales of $5.59 billion, missing estimates of $5.65 billion, according to data compiled by LSEG.
Footwear maker Nike’s shares fell 2% in premarket trading on Tuesday.
The athleticwear retailer expects annual sales of $21.9 billion to $22.2 billion, compared with its earlier forecast of $22.1 billion to $22.4 billion.
The company expects annual earnings per share of $11.00 to $12 on an adjusted basis, compared with its earlier forecast of $13.50 to $14.50.
The company now expects comparable sales at Foot Locker to be between flat and down 2%, compared with its prior target of growth between 1.5% and 3%. It maintained its target for comparable sales growth at its namesake business.
Dick’s Sporting Goods reported quarterly earnings per share of $3.53, missing analysts’ estimate of $3.76.
It received $59 million in tariff refunds under the International Emergency Economic Powers Act, the company said.
(Reporting by Angela Christy in Bengaluru; Editing by Maju Samuel)
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