Shares of Dick's Sporting Goods (DKS) are off about 3% today after fellow sporting goods store Hibbett (HIBB) gave a sluggish Q2 sales update. The update had everything investors don't want to see in retail. Comps are expected to be down 10% due to "very challenging" sales trends, while gross margins are under "significant pressure". The double whammy of topline and gross margin degradation is creating a huge headwind for earnings.
That's horrible news for HIBB, but it isn't so bad for DKS. The market seems to think that it's bad news for both, and we think that creates a buying opportunity into an unfairly beaten up name.
