When Dick’s Sporting Goods Inc. (NYSE: DKS) reported first-quarter 2019 results before markets opened Wednesday morning, the specialty retailer reported adjusted diluted earnings per share (EPS) of $0.62 on revenues of $1.92 billion. In the same period a year ago, the company reported EPS of $0.59 on revenue of $1.91 billion. First-quarter results also compare to consensus estimates for EPS of $0.58 and $1.9 billion in revenue.

Same-store sales for the first quarter were flat compared to the same period last year. Adjusted net income for the quarter excluded a noncash impairment charge of $7.6 million and a litigation settlement of $6.4 million.

The company’s shares traded up by as much as 5.5% before markets opened on Wednesday but later slumped to trade down more than 5%.

CEO Edward W. Stack said:

We were pleased with our start to 2019, delivering higher merchandise margins and first quarter earnings per diluted share above last year. Same store sales turned positive in March and remained positive in April, as we started to see the benefits of our key strategies and investments.

Lauren R. Hobart, the company’s president, added:

As we continue to build the best omni-channel experience in sporting goods, we see significant opportunity to drive competitive advantage in the marketplace and strengthen our leadership position.

Dick’s raised full-year EPS guidance from a prior range of $3.15 to $3.35 to a new range of $3.20 to $3.40. Full-year same-store sales are projected to range between flat and up 2%, compared with a decline of 3.1% in 2018. The company plans to open seven new Dick’s stores and relocate three others this year, and gross capital spending is targeted to reach $230 million, up from $198 million in 2018.

For the second quarter, analysts expect EPS of $1.19 and sales of $2.2 billion. For the full year, the consensus forecast is $3.26 in EPS and sales of $8.54 billion.

Overall, this was an upbeat if not dazzling report, and Dick’s management likely expected better treatment from shareholders. Assuming that the conference call did not reveal some bad news that no one expected, the drubbing the stock took on Wednesday may be due to traders’ reactions to a new threat to the global economy from a cut-off of Chinese exports of rare earth metals and 10-year Treasury prices that have dropped to 20-month lows.

The difference between three-month and 10-year Treasury note yields is now −13.5, according to MarketWatch, meaning a short-term note pays more than a long-term note. This so-called inverted yield curve is often a sign of a recession to come within 12 to 18 months. Consumer discretionary items like sporting goods are not a go-to sector when a recession is near.

Dick’s shares traded down about 5.5% shortly before the noon hour Wednesday, at $33.82 in a 52-week range of $29.69 to $41.21. The 12-month consensus price target was $37.29 before this morning’s announced results.

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