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Poor Sportsmanship at Dick's

Dick's Sporting Goods (NYSE: DKS  ) reminded investors about "the agony of the defeat" yesterday; its stock dropped 16% on its first-quarter results and outlook.

First-quarter net income at Dick's fell 4% to $20.8 million, or $0.18 per share. Net sales jumped 11% from last year to $912.1 million, although same-store sales dropped by 3.8%. Unfortunately, comps for its Golf Galaxy concept plunged by 7.4% on a pro forma basis.

Not only did the results fall short of Wall Street analysts' expectations, but Dick's outlook for next quarter and all of 2008 didn't give anybody much reason for jubilation. Dick's said to expect earnings of $1.22 per share to $1.36 per share in 2008 (compared to $1.33 per share in 2007). It also said it believes comps will decrease by 3% to 5% during the year.

In the second quarter, Dick's sees earning $0.34 per share to $0.38 per share, down from $0.41 per share this time last year. Comps are expected to fall by 4% to 7%.

Dick's news certainly precipitated a significant drop in its share price, but it also sent some shudders through some other stocks that touch the sporting goods market. For example, Under Armour (NYSE: UA  ) dropped about 8% yesterday on no news of its own -- apparently it was downgraded by a Wall Street analyst because of fears that the sporting goods segment will suffer in the current consumer slowdown -- and counted it a potential loser to the macro picture.

Back in March, when I took at a look at Dick's Sporting Goods' fourth-quarter results, I thought anybody who was interested in the stock might want to wait and see if a better price arose, since I also thought that this consumer discretionary segment could suffer in an economic slowdown. And indeed, a better price has presented itself.

Then again, it looks like Dick's is going to have a tough time this year, so I can't say I'm exactly ultra-bullish on this stock. After all, consumers are nervous and pulling back, and showing signs of nesting. Investors might be a little better served looking at stocks that provide home-centric entertainment -- after all, speaking of a different type of gamer, Activision (Nasdaq: ATVI  ) and GameStop (NYSE: GME  ) have been bucking the macro trends, so they seem to be in positions of strength at the moment (although I'm sure many might argue whether either looks exactly cheap right now).

For the time being, though, I'm not sure I believe Dick's stock is a good defensive play for investors' portfolios.  

Related Foolishness:

Under Armour is a Motley Fool Rule Breakers recommendation. Activision and GameStop are Motley Fool Stock Advisor picks. The Fool owns shares of Under Armour.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.

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