After reporting Q3 Earnings before the market opened on November 14th, shares in Dick's Sporting Goods (DKS) had a punishing first day but have now bouncing higher a day later as investors continue to digest what happened in the latest quarter. In my opinion, the shares of the company remain in value territory as they trade at 9.8x TTM P/E and come with a well covered 2.6% dividend yield.
Coming out of the earnings release, investors seemed to focus heavily on the negative aspects of the quarter such as the competitive pricing environment that hurt margins and the declining same store sales numbers. One of the biggest items hurting the company's shares was the fact that the company decided to give 2018 guidance which they normally do not provide. Dick's gave guidance for 2018 EPS to decline by as much as 20% driven by investments in the e-commerce business as well as technology and staff payroll in stores. Diving deeper in to the release, it seems to me that Dick's is making the right moves in a tough retail environment to stay competitive and profitable long-term.
