What happened

Dish Network (DISH) stock trailed the market this week. Shares were down 13% through Thursday trading compared to a 0.1% drop in the S&P 500, according to data provided by S&P Global Market Intelligence. The drop added to a tough year so far for shareholders. Dish Network stock is down over 50% so far in 2023.

This week's decline was sparked by the company's first-quarter update that covered the selling period through late March.

So what

Dish Network announced on Monday that subscriber losses continue to pressure its business. Revenue fell to $3.96 billion from $4.33 billion a year ago thanks to declines in both its pay-TV and wireless users. Its churn rate, or the rate at which subscribers cancel in a given period, rose to its highest point in years.

Pressures on the business include a flood of competition in the streaming world, including from free and ad-supported channels. Dish Network's rising content costs give it less flexibility to compete on price. Average monthly spending rose, in fact, to $103 compared to $99 a year ago. Yet that increase couldn't fully offset pressures from a declining subscriber base.

Now what

Most investors are bracing for steadily shrinking sales at least through fiscal 2023. Revenue should decline by 5% this year, according to Wall Street pros, following last year's 7% drop. Earnings will likely slip as well, even as most subscribers pay higher monthly prices.

DISH Operating Margin (TTM) Chart

DISH Operating Margin (TTM) data by YCharts

Dish Network remains profitable, but its net profit margin is rapidly approaching single digits compared to roughly 20% of sales in 2021. The stock is not likely to post a sharp rebound until management can show clear progress at arresting this slide while returning the company to a sustainable growth path.