Shares of Sportsman's Warehouse took a hit in morning trading as the sporting-goods retailer presented a gloomy earnings outlook for the current quarter. The company has been resorting to deep discounts in an effort to clear out its old inventory, leading to a wider adjusted loss projection than what analysts had anticipated.
DECLINE IN SHARES
The stock experienced a decline of over 19% and now stands at $4.27. Overall, shares have seen a decrease of about 55% throughout the year.
FOCUS ON CLEARING OLD INVENTORY
Based in West Jordan, Utah, Sportsman's Warehouse is determined to rid itself of aging inventory and make way for improved products in the coming year. CEO Paul Stone emphasized during a conference call that the company is heavily discounting its merchandise to attract customers in the remaining weeks of the year. However, this strategy will have an impact on margins.
BETTER-THAN-EXPECTED THIRD QUARTER RESULTS
For the third quarter, same-store sales fell by 11.4%. Although this decline is significant, it was actually better than the anticipated decrease of 15.8% according to analysts' projections.
In conclusion, Sportsman's Warehouse is facing challenges with discounts and inventory as it strives to improve its business prospects moving forward.