Dick’s Sporting Goods shares jumped 23 percent at the market’s open Wednesday after it beat first-quarter expectations and hiked its full-year earnings forecast, easing concerns that restrictions it placed on gun purchases would hurt its sales.

The retailer reported $60.09 billion in net income, or 59 cents per share, topping analysts polled by Thomson Reuters’ estimates of 45 cents per share. Sales reached $1.91 billion, up 4.6 percent from the year-ago quarter and greater than estimates of $1.88 billion.

Dick’s increased its full-year forecast to between $2.92 and $3.12 per share, up from the previously anticipated $2.80 to $3.00 per share.

In the quarter, same-store sales dropped 2.5 percent. Analysts had expected them to decrease 1.4 percent. Dick’s said hunting and electronic sales lagged, while colder spring weather led to a delayed start to outdoor sports and activities.

In February, Dick’s stopped selling all assault-style rifles in its stores following the school shooting in Parkland, Florida, which killed 17 students and staff members. CEO Ed Stack told analysts in March it was “too early to tell” how the decision would affect the company’s financial performance long term, but that it “wouldn’t be positive from a traffic and sales standpoint.”

Investors worried the move would weigh on Dick’s performance. Part of Wednesday’s big move likely had to do with hedge funds scrambling to cover their bets against the stock.

Nearly 15 percent of the company’s shares available for trading were sold short, according to FactSet. A short squeeze occurs when investors who borrowed the stock for a short sale are forced to buy them back as the share prices moves higher.

Source: Investment Cnbc
Dick's Sporting Goods shares skyrocket as gun sales restrictions don't hurt sales as much as feared