After 73 Years in Business, Retailer Calls Itself a ‘Growth Company’ as It Rolls Out New Concepts
Record sales and profits at Dick’s Sporting Goods are helping to drive new concepts and store openings for the nation’s largest seller of sports equipment, apparel and footwear to build on demand that rose in the pandemic.
As hundreds of thousands of organized activities were canceled a year ago, consumers turned to home fitness and outdoor activities to keep themselves busy, boosting sales across all categories throughout the fiscal year, Dick’s executives said on a quarterly conference call.
And then as organized games, particularly youth sports, got back in swing this year, the Pittsburgh-based retailer jumped on the rising demand, even hiring more staff to handle the traffic, and reaped the rewards.
The company's profit of $361.8 million, or $3.41 a share, recovered from a year-earlier loss of $1.71 a share. Sales soared 119% to $2.92 billion, while sales at stores open longer than a year jumped 115%. All easily beat Wall Street’s expectations.
“We executed at a very high level and capitalized on an incredibly strong consumer demand,” Ed Stack, executive chairman, said on the call. “The future of retail is experiential, powered by technology and a world-class omnichannel operating model,” he added, and the chain is “reimagining the athlete experience” across the core business and through new concepts.
In April the company opened the experiential Dick’s House of Sport in Victor, New York, as well as two discount Warehouse Sale stores and 30 experiential Soccer Shops in core Dick’s Sporting Goods stores. House of Sport, which features a high-tech batting cage, rock climbing wall, golf simulators, the first House of Cleats and a 17,000-square-foot outdoor turf field and running track, is on track to become the highest-volume store in the chain, Stack said.
“We reimagined virtually everything in the store and believe it sets the standard for sports retailing and athlete engagement,” he added. A second House of Sport is scheduled to open in Knoxville, Tennessee, this year.
At the same time, Dick’s completely reengineered a handful of its Golf Galaxy stores with an immersive experience that includes simulators, hitting bays, custom fittings and even classes with PGA- and LPGA-certified professionals. Eighteen stores were redesigned, and another 30 are on tee for the rest of the year.
“Our golf business has been tremendous,” Stack said. “We expect golf to have a long runway, and we are committed to leveraging it.”
The company also owns Field & Stream stores and plans to convert one in Pittsburgh and another in Columbus, Ohio, into a new outdoor concept it’s calling Public Lands in the second half of this year. Stack, who stepped down from the CEO role late last year, will focus on the concept aimed at outdoor activities such as camping, biking, kayaking and fishing.
During the fiscal year, about 90% of the company’s annual sales were sold or fulfilled in stores, Dick’s said. Of the $2.8 billion in e-commerce sales — amounting to a 100% year-over-year jump — 70% were fulfilled through the brick-and-mortar sites with curbside pickup, "buy online, pick up in store" or shipped from stores. Consumer use of curbside pickup and BOPIS surged 350%, easily outpacing the overall growth of online sales and substantially reining in costs, the company said.
“We’re a growth company,” Stack said of the 73-year-old retailer.
Dick’s ended the quarter with $1.86 billion in cash and another $1.85 billion in untouched revolving credit.
Two-thirds of Dick’s 855 stores are up for lease renewals over the next five years, and the company sees it as an opportunity to reduce rent, increase tenant allowances and/or relocate.