Dick’s Sporting Goods is trying to score with customers who want an engaging, hands-on in-store experience by pushing a big expansion of its House of Sport concept.
At the same time, the retailer is shutting down all 17 of its remaining Field & Stream stores, with 12 of those already closed during the fourth quarter, CFO Navdeep Gupta said during a Tuesday earnings call. Dick’s plans to convert the remaining stores to its House of Sport concept or large format Dick’s stores by 2024.
Right now, Dick’s operates just three House of Sport locations in Rochester, New York; Knoxville, Tennessee; and in Minnetonka, Minnesota. Going forward, “House of Sport will be a significant part of our future growth story,” Dick’s CEO Lauren Hobart said according to a Seeking Alpha earnings call transcript.
Dick’s describes House of Sport as “a place to connect and play.” The stores typically feature interactive spaces like a climbing wall, batting cages, golf simulators and equipment services like baseball glove steaming and racquet stringing. The company plans to open nine House of Sport locations this year by remodeling eight existing Dick's and Field & Stream combo stores and relocating an additional store.
Ten of the stores are in the pipeline for 2024. Dick’s plans to open 20 additional House of Sport locations over the next two years. So far the company has confirmed those locations will include Boston, Pittsburgh, and Binghamton, New York. The retailer also plans to open a location in Chesapeake, Virginia, a company spokesperson confirmed on Thursday to Retail Dive.
In the next five years, the retailer envisions operating 75 to 100 House of Sport locations. Although the House of Sport concept debuted in 2021, it has become scalable and highly profitable, according to Hobart. As a result, “we are leaning into that growth,” Hobart said. “We're very, very bullish on House of Sport and what this can do for our athlete experience in our business.”
The retailer began selling its Field & Stream stores in 2019. The move was part of a push to back away from the hunting space. Dick’s stance on guns, which included halting the sale of assault-style rifles at Field & Stream in 2018 simultaneously drew negative and positive attention from gun rights and gun control advocates.
Also Tuesday, Dicks reported Q4 net sales of $3.6 billion, up 7.3% year over year. Fourth-quarter comp sales grew 5.3% year over year, down from 6.6% growth a year ago. Hobart described the holiday quarter as “a strong ending to another strong year.” The company reported net sales of $12.4 billion for the full year. While that’s less than a 1% rise year over year, it’s a 41% increase from 2019.
Executive chairman Ed Stack said 2022 “was the largest sales year in our company’s history.” Looking ahead, Dick’s guidance for 2023 estimates earnings per share ranging from $12.90 to $13.80 and comp store sales will be flat to up 2%.
Hobart said the pandemic pushed consumers to see health and wellness “as necessities rather than discretionary,” further helping to drive sales to the retailer. That sentiment may explain the company’s growth in a market segment that some may still view as purely discretionary.
Wedbush analysts led by Seth Basham had a similar take.
“The sporting goods retail sector continues to benefit from a fundamental shift in consumer behavior including increased focus on health and wellness, participation in outdoor activities and a higher interest in athletic lifestyle products,” Wedbush’s analysts said in a note.
Basham also said Dick’s bottom line will benefit from the increase to its store footprint as it adds House of Sport locations.
Dick’s is well positioned to drive market share gains in the $140 billion sporting goods industry, of which the company holds 8% market share, according to Wedbush. Dick’s also operates Golf Galaxy, Public Lands, Going Going Gone! and Warehouse Sale stores, and GameChanger, a youth sports app.
Clarification: This article has been updated to clarify that House of Sport is a store concept operated by Dick's Sporting Goods.
