Dick's Sporting Goods plunges after saying it saw 'significant declines in Under Armour sales'

Dick's Sporting Goods plunged as much as 14% in pre-market trading on Wednesday as a slowdown in Under Armour sales weighed on top-line results.

The sporting-goods retailer earned $1.20 a share during the second quarter, easily beating the the $1.06 that Wall Street analysts surveyed by Bloomberg were expecting. Dick's recorded second-quarter sales of $2.18 billion, missing the $2.23 billion that was anticipated. Comparable sales fell 1.9%, worse than the 0.8% drop that was expected.

"As we continue to focus on driving profitable sales, we are very pleased with our strong gross margin improvement. An improved product cycle, fewer promotions, and a favorable product mix contributed to the overall strength in our merchandise margin," CEO Edward Stack said in the earnings release.

"We delivered double digit growth in eCommerce, private brands, and athletic apparel excluding Under Armour, however, as expected, sales were impacted by the strategic decisions we made regarding the slow growth, low margin hunt and electronics businesses, which accounted for nearly half of our comp decline. In addition, we experienced continued significant declines in Under Armour sales as a result of their decision to expand distribution. We are very confident our sales trajectory will improve next year as these headwinds are expected to subside."

Looking ahead, the company lifted its full-year earnings per diluted share guidance to between $3.02 and $3.20, up from its previous range of between $2.92 and $3.12. Analysts had expected $3.09 per share.

Shares of Dick's Sporting Goods were up 13% this year through Tuesday.

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