The firm cited headwinds and margin pressure ahead for the athletic retail company, on the back of its latest quarterly results.
Things aren't looking good for Dick's Sporting Goods , and Bank of America thinks investors need to steer clear of the athletics apparel. The stock plunged 24.1% on Tuesday — its biggest one-day drop on record — on weaker-than-expected second-quarter results. Dick's also cut its guidance for the year amid a rise in retail theft and sluggish sales in its outdoor segment.
The analyst cited several downside risks ahead for Dick's, including: normalization of spending on categories that outperformed during the pandemic, as well as high inflation impacting consumer spending and magnified expense deleverage given investments in wages, ads, technology and store growth. Student loan repayments could further tighten discretionary purchases, according to Ohmes.
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