Dick’s Sporting Goods’ first quarter earnings were in line with Wall Street estimates
This morning Dicks Sporting Goods (NYSE: DKS) entered the profit denomination where the sporting goods retailer blew out the first quarter results. Dick’s lower earnings of $ 3.79 per share – more than three times Wall Street projections – on revenue in line with estimates. Additionally, like-for-like sales more than doubled projections, which resulted in the company delivering a full-year outlook that is above current consensus. In response to the positive news, DKS is on the rise, most recently up 12.1% to trade at a new all-time high of $ 94.50 and options traders are watching.
In today’s option pits, there is a lot of activity on both sides of the corridor. In just the first hour of trading, almost 22,000 calls and almost 8,000 puts crossed the band – 20 times the average intraday amount. At the top of the indictment is the weekly 5/28 call with 100 strikes, followed by the call with 95 strikes from the same series, opening new positions in both spots.
Moving these option pits could add even more tailwind as puts have been hugely popular over the past 10 weeks. This corresponds to Dick’s Sporting Goods’ 50-day put / call volume ratio of 1.36 on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE) and the NASDAQ OMX PHLX (PHLX). This ratio is higher than all but 2% of readings over the past 12 months, which means that the appetite for long puts has been healthier than usual lately.
Short interest rose ahead of Dick’s Sporting Goods stock profit, and unwinding some of that pessimism could add even more wind to the equity market. Short interest rose 6.8% over the most recent period, and the 11.35 million short sales now account for a whopping 18.1% of the stock’s available free float. It would take seven days to buy back these bearish bets from DKS at the average daily trading pace.
On the charts, the 50-day moving average supported Dick’s Sporting Goods stock for most of 2021 – a time when the stock rose over 75%. Additionally, DKS has just exceeded resistance on the 10-day trendline that has been putting pressure on the stock for the past six sessions.