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Dicks Sporting Goods Inc (NYSE:DKS), the Pennsylvania-based retailer of athletic, hunting and golf equipment and apparel, is a close competitor of Finish Line Inc (NASDAQ:FINL), which had a disastrous earnings report on Friday. The company posted a $9.5 million net loss in the fiscal fourth quarter, versus the year-ago quarter’s $4 million profit, and earnings per share were significantly below consensus.
The report from FINL was not entirely unexpected, but the data for bricks and mortar retail continues to look worse than we thought. We are particularly concerned about the slowdown in sporting apparel.
DKS has been in decline this year and has just recently broken support. The company should continue to experience margin compression as more buying goes online, and at about $2.60 the options can be bought cheaply on a relative basis.
‘Buy to open’ the DKS May 47 Puts (DKS170519P00047000) for a maximum price of $2.60.
You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our .
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