Dick's Sporting Goods (NYSE:DKS) shares got a nice pop Wednesday after the retailer delivered solid first-quarter numbers and a guidance raise for the year. But as senior analyst Seth Jayson points out to MarketFoolery host Chris Hill in this segment of the podcast, it's important to put items like its revenue and profit beats into context. And in his view, the context for Dick's prevents it from being a promising stock for long-term investors.

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This video was recorded on May 29, 2019.

Chris Hill: We'll wrap up our Retailpalooza with what looked like a solid first quarter for Dick's Sporting Goods. Their sales and profits came in higher than expected. They raised their profit guidance for the full fiscal year. I'm wondering if just what is happening in the market today is why the stock isn't really moving.

Seth Jayson: It's hard to be impressed with this.

Hill: Really?!

Jayson: I think so.

Hill: What if they were lavender-scented stores?

Jayson: If they were lavender scented ... I'm so underwhelmed, I can't even make the easy jokes. It's up 6.2%. First of all, what strikes me is the headline. When a company like Dick's is up 6.2%, the stock spikes. Any other smaller company that's in a hotter business, 6.2% would just be a daily move. I guess they make $0.61 a share, $0.59 a share earlier. Sales up 0.6%. They expect to earn $3.20 to $3.40 a share, up from their previous range of $3.15 to $3.35. That all sounds great. But this is another slow-growth business. The problem is that same-store sales were flat. That only looks good when you consider the drop the year before.

I think the problem they're going to have, even though online sales were up a little bit more, is that for a lot of this type of gear, consumers are increasingly turning to the app from the brand itself. If you're buying Under Armour, you can buy directly from their website and get a decent deal. Same thing for many of the other brands. And then you've got competitors like Lululemon selling similar stuff that you just can't even get at Dick's. So this, to me, is a decent result, but I still think the eventual trajectory of a company like this is for flat to slightly "eh" growth for the long term because they just can't compete with online sales for a large portion of what they do sell. Now, some sporting goods, you need to go in and try out. But not everything, especially not apparel.

Hill: Looking at a stock chart, it reminded me, years ago, when you and I would talk about the Gap. And I remember you made the joke, at any given moment, you don't need to look at a stock chart to know where The Gap is trading, because your joke was, it's probably in the teens. There was this stretch of four or five years where Gap was basically there. Now, it's in the 20s.

Jayson: I think it was maybe $15 to $21 or something for the whole time my daughter was growing up.

Hill: Yeah, in that range. Dick's Sporting Goods has basically been in the mid-$30s for a long time now. I'm wondering -- Edward Stack is the CEO. His dad started this business. He's been a CEO since the mid-1980s. He's 64 years old. I'm not knocking the guy, but, for any company that has had the same CEO for 35 years, I think it is reasonable for any shareholder or potential shareholder to ask, what is the succession plan for this person? It's entirely possible that some new blood and some new thinking could maybe invigorate Dick's Sporting Good's business and therefore get the stock higher than the mid-$30s.

Jayson: Yeah. I really wonder. The problem with Dick's is, consumers love to identify with the retailers, or especially with the brands that they buy. Who identifies with Dick's? I mean, nobody. It's just, maybe it was the most convenient place to get things, and it's not anymore, given the internet.

Hill: Versus identifying with, like, "Oh, I wear Nike shoes."

Jayson: I can go online and order a custom version of Nikes. I can order Adidas from many places. I can order some of this stuff much more easily. Some of these shoes, I can order them from Zappos. They get to the house, I can try them on, send them back if I don't like them. I don't have to pay return shipping. If I like a certain brand, like Under Armour, like I said, I'm going to order directly from them. They're going to have a better selection.

I don't think we're going to be talking about Dick's like we talk about Walmart, for instance. Walmart said, "Hey, we've got this digital idea. We have all these stores. How about people order stuff, and they pick it up? Since we're everywhere, that's actually more convenient for a lot of people than having stuff shipped to their house." And it works. Home Depot -- very similar story. You might want that stuff sooner. I don't see the same opportunity for innovation at a Dick's Sporting Goods. Maybe they do online order and pick up, but that's not going to change anybody's life compared to how it might be able to do that at a Walmart or a Home Depot.