Dive Brief:
- Dick’s Sporting Goods kicked off the year with net sales of more than $3 billion in Q1, an increase of 6.2%, according to a company press release. Comparable sales in the quarter grew 5.3%, on top of 3.6% growth the year prior.
- Net income fell 9.6%, but still came in at $275 million. The retailer opened two House of Sport stores in the quarter, for a total of 14, and plans to open six more of the experiential format in the year to come, CEO Lauren Hobart said on a call with analysts.
- Thanks to the strong results, Dick’s already raised its comps outlook for the year and now expects growth between 2% and 3%, up from 1% to 2% previously. Net sales for the year are expected to fall between $13.1 billion and $13.2 billion.
Dive Insight:
Dick’s Sporting Goods is gaining market share as it continues to win in a competitive athletics landscape. And it’s not just from other sporting goods stores.
Hobart said the retailer is taking share “across the board and across the industry” with strong footwear and apparel assortments. Its House of Sport openings are so strong that malls where the concept opens are seeing “significant increases” in traffic, according to Hobart.
“Dick’s is also winning share from other retailers, including specialists like Foot Locker and generalists like Target, as the strength of its offer and its solid partnerships with brands helps to pull consumers away from weaker assortments elsewhere,” GlobalData Managing Director Neil Saunders said in emailed comments. “Interestingly, this dynamic also extends to clothing for everyday wearing where Dick’s continues to draw [customers] away from traditional channels like department stores.”
This is helped by partnerships with the likes of Free People’s FP Movement, according to Saunders. Dick’s also continues to expand distribution of brands like On and Hoka, which are growing share with upper-income teens. The brand’s own private labels, including DSG, Calia and VRST, are outpacing total company comp growth and helping margins, Hobart said.
The outdoors space is an exception to the company’s overall strength, where Hobart noted the company is seeing similar negative trends to others in the industry after pandemic-fueled growth a few years ago. She added that the company has “tremendous confidence” in the space in the future.
Still, the retailer’s shopper has stayed strong in the face of inflation, and Dick’s saw growth across all of its income demographics, with no sign of trade down, per Hobart. The company also touted high engagement with GameChanger, its youth sports-focused app that Hobart called “a key part of our long-term strategy,” which has 5 million users that are active for roughly 30 minutes a day.
“With such good growth under its belt – first quarter net sales have increased by 57.1% or $1.1 billion since 2019 – it is legitimate to ask for how long Dick’s can continue to pump out strong growth,” Saunders said. “Our view is that the market will slow slightly across the course of this year. However, we also think Dick’s is well placed to buck some of this deterioration because of its ability to take share from other players and to entice shoppers into spending via improved store experiences and a strong line-up of brands.”
