Given the following options, how would you define your investment time horizon: current, short-term, or long-term? Your answer to that question will likely determine your interpretation of Dick's Sporting Goods' (NYSE:DKS) earnings announcement.

The sporting goods retailer had a nearly flawless quarter. For the first quarter ended May 1, net income jumped 64% to $10.9 million. Earnings per share came in at $0.21, an increase of 50% from a year ago and ahead of the $0.18 analysts were expecting (I'll explain why this is important later).

Dick's also reported an increase in same-store sales (usually a good indicator of a retailer's strength) of 4.6%. Total sales were up 20% to $364.2 million. I realize I'm just throwing numbers out there, but just bear with me a little longer.

The company also improved its inventory levels, which declined 2.6%. And, finally, gross margins improved by 1%.

OK, now I'm getting to my point. With numbers like these, you might expect the stock to jump. So, why did it instead plummet by 7% in early trading yesterday (though it did manage a comeback to close down 2%)?

This brings us back to our first question. It appears that most people ignore the current and long-term data and simply focus on the next quarter. The reasoning (if you can really call it that) behind the negativity seems to be that the company said (amongst all that impressive data) that it expects second-quarter earnings of $0.32 to $0.33, which is less than the $0.36 analysts were expecting.

For further proof of the absurdity, Dick's also announced that it expects earnings of $1.27 to $1.28 for the year, which is ahead of the analysts' estimates of $1.25. This fact, however, seemed to be ignored. This reminds me of what happened to the Children's Place (NYSE:PLCE) less than a week ago.

If you prefer valid reasons to be somewhat cautious about the company, you can look to its valuation and growing competition. Dick's boasts a hefty forward P/E of 20.8, while one of its competitors, Sports Authority (NYSE:TSA), has a much cheaper forward P/E of 12.8. Dick's can also expect to see increased competition from discount retailers such as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT).

Based on the company's history and despite these more realistic concerns, however, I think Dick's will continue to grow and has the potential to be a permanent player in the sporting goods game.

Share your thoughts on Dick's and its success on the Fool's Dick's Sporting Goods discussion board.

Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies in this article.