Source: Dick's Sporting Goods.

Athletic-products superstore chain Dick's Sporting Goods (NYSE:DKS) has been showing investors the money over the past five years as a solid rise in profitability over that time period has led to a more than doubling of its stock price. Unfortunately, 2014 has been a slightly different story, with the company's stock price down by a double-digit amount, thanks primarily to weaker-than-expected sales in its most recent fiscal quarter, a similar story to that being told by competitor Big 5 Sporting Goods (NASDAQ:BGFV).

On the upside, though, Dick's continues to generate solid profitability, allowing management to forge ahead with plans for further additions to its store network. So, after a price haircut, is Dick's a good bet for investors?

What's the value?
Dick's has come a long way from its inception as a bait and tackle shop, currently operating one of the country's largest sporting-goods retail networks with more than 500 superstores as well as a smaller base of golf and outdoor sports-oriented stores. Its ability to offer customers a huge selection of inventory has allowed it to capture a growing, loyal customer base, as evidenced by consistent increases in per-store sales over the past four fiscal years. Dick's has also partnered with leading manufacturers in the development of branded in-store shops, further differentiating itself from its competitors.

In its latest fiscal year, the company posted another solid financial performance, highlighted by a 6.5% top-line gain that was a function of a comparable-store sales increase and an expansion of its overall store network. More important, Dick's generated a slight uptick in its adjusted operating profitability, helped by an increase in average product prices. The net result for the company was a solid level of operating cash flow, fueling its drive to continue adding superstores and investing in its private-label capabilities.

A data point or a trend?
As previously mentioned, though, 2014 is shaping up to be more of a challenge for Dick's, due mainly to a less-rosy-than-expected sales performance. While sales of athletic apparel and footwear continued to hum along nicely in the latest fiscal quarter, the company was hurt by lower sales of golf and hunting-related products, a recent focus area. Consequently, Dick's had no choice but to lower its profit outlook for the current fiscal year, an action that weighed heavily on its stock price.

Of course, Dick's is hardly alone in its misery, as a weak operating performance has also hurt shares of Big 5 Sporting Goods in 2014, which are down more than 30%. The company was negatively affected by a poor sales performance in its latest fiscal quarter, a data point that management blamed on lower-than-expected sales of firearms and winter-related product lines. Not surprisingly, the lower sales tally led to a steep drop in operating profitability, down 69.6% compared to the prior-year period.

 A better way to go
Given the fading profit growth at Dick's, investors looking for profits in the athletic- products sector should probably focus on the players that continue to generate volume growth in the current environment, like Nike. The iconic footwear manufacturer and retailer has been having a good FY 2014, thanks to sales volume growth across its major product segments as well as across most of its major geographies. 

Just as importantly, Nike took advantage of higher average prices during the period, which helped to propel a slight pickup in its adjusted operating profitability. The net result for Nike was higher operating cash flow, funding a further expansion of its product development and branding activities.

The bottom line
Dick's is certainly cheaper than it was at the start of 2014, after losing nearly one-quarter of its market value. That said, the company's business seems to have downshifted a bit, based on the results in its most recent fiscal quarter, thereby providing a reasonable basis for the stock price action. While Dick's is a likely long-term winner in the athletic-products space, investors looking for a quick share price rebound aren't likely to find it here.