Image source: Dick's Sporting Goods.
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What: Shares of Dicks Sporting Goods Inc rose 10% in March, according to data provided by S&P Global Market Intelligence, after a big competitor filed for bankruptcy.
So what: Dicks Sporting Goods reported fourth quarter earnings and said quarterly revenue rose 3.7% to $2.2 billion, although net income fell from $155.5 million a year ago to $129.0 million, or $1.13 per share.
The bigger story long-term may be that competitor Sports Authority filed for bankruptcy in March and said it will close 140 stores. This eliminates a lot of competition for Dicks, and could allow the company to steal market share in the sporting goods market.
Now what: Fourth quarter results were actually below analysts' expectations slightly, but the market shrugged off the earnings miss, looking to the long-term instead. That's good for investors, because the loss of a big competitor will help drive more traffic to Dicks. The threat from online retail is real, but there's a lot of value in a local sporting goods store, and with shares now trading at 15 times earnings I think there's room for the stock to grow long-term.
The article Why Dicks Sporting Goods Inc's Shares Jumped 10% in March originally appeared on Fool.com.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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