Dick’s Sporting Goods touts omnichannel success and new store growth
E-commerce has reached a new high at Dick’s Sporting Goods, but that doesn’t mean the nation’s leading sporting goods retailer is backing away from store expansion.
Dick’s announced ambitious store expansion plans for 2016 in conjunction with the release of fourth quarter and full year results that showed same-store sales and profits declined while e-commerce as a percent of sales reached a record level. The company said it plans to open approximately 36 Dick’s Sporting Goods stores and relocate nine others. It also expects to open approximately nine Field & Stream stores and two Golf Galaxy stores in 2016, most of which will be adjacent to new or relocated Dick’s Sporting Goods stores.
Total sales increased 3.7% to approximately $2.2 billion, during the period ended Jan. 30. The gain was due to the addition of new selling space as same store sales declined 2.5%, worse than the company’s original guidance range which envisioned a 2% decline to a 1% increase. Profits during the period declined to $129 million, or $1.13 a share, toward the low end of the company’s guidance range of $1.10 to $1.25, and well below prior year profits of $155.5 million, or $1.30 a share.
"Given the challenging conditions we faced with the unseasonably warm weather, we operated quite well in the fourth quarter, generating earnings within our guided range and driving results in important growth categories," said Dick’s chairman and CEO Ed Stack. "In 2015, we grew our omnichannel platform by maintaining strong new store productivity and driving our e-commerce business. We ended the year with a strong balance sheet and returned over $420 million to shareholders through dividends and share repurchases."
The company also ended the year with e-commerce penetration at a record 15.7% of sales, compared to 14.4% in the fourth quarter of last year and a full year figure of 10.3%. Those gains are expected to continue in 2016 as Dick’s, like virtually all retailers, is investing heavily in technology and e-commerce capabilities.
"In 2016, we will continue to make strategic investments in our business to grow our leadership position in the industry and build meaningful momentum for 2017 and beyond,” Stack said. “These investments are expected to have an approximate $50 to 55 million impact on earnings in 2016 and include enhancing the shopping experience in our stores, building brand equity in a significant way through our partnership with the United States Olympic Committee and Team U.S.A. and transitioning our e-commerce business to our own platform."
Dick’s ended the year with 644 Dick’s Sporting Goods stores, 73 Golf Galaxy stores and 19 Field & Stream stores and annual sales of $7.3 billion.
Following the difficult fourth quarter, Dick’s said it expects first quarter sales to increase between 1% and 2% and said full year comps could be flat to up 2%.