Dick’s Sporting Goods to open experiential prototype; Q4 sales rise 19.8%

Dick’s Sporting Goods ended its fiscal year on a strong note, maintaining momentum as consumers continue to focus on outdoor activities and home workouts amid the pandemic. It But it struck a cautionary note regarding the current year.

The sporting goods giant, whose same-store sales rose 9.9% for the full year, forecast that same-store sales for fiscal 2021 will range from a loss of 2% to a 2% increase. DIck's  will increase its capital expenditures this year to between $275 million and $300 million, compared to $167 million in fiscal 2020.

On the company's earnings call, executives said Dick's will open its first "experiential" prototype store next week, in Rochester, New York. Called Dick's House of Sports, the store will focus "on service and community and allow us to innovate and deliver elevated experiences to our athletes," said Dick's president and CEO Lauren Hobart. It will include an  outdoor field to host sports events and promote product try-outs, a rock climbing wall and health and wellness spaces for in-store programming.

"It will serve as a test and learning center and [we] will roll the most successful elements into our core Dick's stores," said Hobart.

Hobart also said that Dick’s will launch a new men’s athletic apparel line, called Burst, later this month, and will invest in technology to support golf fittings and lessons at its Golf Galaxy stores and will enable online booking of the same. 

"We are incredibly bullish on the golf business," Hobart said. "It has remained strong through the pandemic in the warm weather markets and still strong nationally across the board. We are very well positioned to capitalize on increased participation and other favorable trends."

 The retailer also plans to "re-conceptualize"  its soccer business at Dick’s stores, with more premium product, enhanced store experiences and exceptional service.  The retailer is also doubling down on footwear, adding  full-service footwear assortment and presentations to more than 100 stores.

Dick's reported income of $219.6 million, or $2.21 per share, for the quarter ended Jan. 30, up from $69.8 million, or $0.81 per share, last year. Adjusted EPS of $2.43 topped analysts’ estimates of $2.30. 

Net sales rose 19.8% to $3.13 billion, topping analysts’ estimates of $3.07 billion. Same-store sales jumped 19.3%, also more than expected. E-commerce sales increased 57%, accounting for about 32% of the quarter’s total sales.

Total inventory decreased 11.3% at the end of the quarter of 2020 compared to the year-ago period.

"We are very pleased with our strong fourth-quarter sales and earnings results," stated Hobart, who was promoted to CEO https://chainstoreage.com/dicks-sporting-goods-names-new-ceo-q3-earnings-crush-estimates effective Feb. 1. "The strength of our diverse category portfolio, technology capabilities and advanced omnichannel execution once again helped us capitalize on the favorable shifts in consumer demand across golf, outdoor activities, home fitness and active lifestyle. As we enter 2021, our business has so much momentum, and we have been pleased with our start to the year. Our focus in 2021 will center around enhancing our existing strategies to accelerate our core and enable long-term growth."

For the full year, Dick’s net sales increased 9.5% to approximately $9.58 billion. Consolidated same-store sales increased a record-setting 9.9% despite temporary store closures during March, April and May due to the pandemic. Commerce sales increased 100%. Net income totaled $530.3 million, or $5.72 per diluted share. 

"We've never had a year quite like 2020. We were challenged in numerous ways, as were so many others, but as an organization we not only survived – we thrived, delivering record-setting sales and earnings," said Ed Stack, executive chairman and chief merchandising officer. "Most importantly, we cared for each other and our communities every step of the way."

The company ended the fourth quarter with approximately $1.7 billion in cash and cash equivalents and no outstanding borrowings under its $1.855 billion revolving credit facility. 

For 2021, Dick's is guiding for sales of $9.544 billion to $9.935 billion, consolidated same-store sales from a loss of 2% to a 2% increase, EPS of $3.81 to $4.55, and adjusted EPS of $4.40 to $5.20. The FactSet consensus is for sales of $9.529 billion, same-store sales growth of 1.8%, and EPS of $5.15. 

Dick's announced that it will raise its quarterly dividend by 16% to $0.3625 per share payable on March 26, 2021, to shareholders of record at the end of business on March 19, 2021.

As of Jan. 30, the company operated 728 Dick's locations across the United States.