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Dick’s Sporting Goods should be celebrating after posting the largest sales quarter in the company’s 77-year history. Instead, there is rising concern due to a trade war initiated by U.S. President Donald Trump and a diminished revenue forecast stemming from it.
The Pittsburgh-based retailer said Tuesday it generated $3.9 billion in sales for the quarter that ended Feb. 1, a 0.5% increase in a period that included the critical holiday sales period, to set the new company record. Net income also increased slightly to $300 million, above analyst projections. The results for the full fiscal year were even better, as sales rose 3.5% to $13.4 billion and net income jumped 11% to $1.17 billion.
Both Dick’s itself and investors, however, were focused on sales and profit forecasts for the upcoming year that are well below Wall Street expectations, particularly a tepid projection of sales growth of 1% to 3%.
“There is a lot that is still evolving and that is still unknown from a tariff perspective,” said Dick’s CFO Navdeep Gupta in an earnings call with analysts.
The issues surrounding Dick’s are very similar to those facing manufacturers in the sports apparel and footwear space, as well as with many retailers in other categories. Even as Dick’s says its exposure to Canada, China, and Mexico—the primary targets of Trump’s trade ire—is relatively low, the issue directly affects consumer confidence, which in turn hits sales.
“I do think it’s just a bit of an uncertain world out there right now,” Dick’s executive chairman Ed Stack said on CNBC. “What’s going to happen from a tariff standpoint? You know, if tariffs are put in place and prices rise the way that they might, what’s going to happen with the consumer?”
Shares in Dick’s fell by nearly 6% in Tuesday trading, closing at $198.97 per share and adding to a monthlong decline that has surpassed 18%. Over the past five years, though, Dick’s has been one of the big success stories in American commerce, regardless of industry, and its stock has grown by 640% during that time.
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