Dive Brief:
- A few days after Foot Locker reported an 11% sales decline on the back of soft consumer demand, Dick’s Sporting Goods told a different story, with Q1 sales up 5.3% and CEO Lauren Hobart telling analysts the retailer feels “very good about how our consumer is holding up.”
- At a time when many retailers are lowering guidance, Dick’s held firm to its 2023 outlook, which projects comps will be flat to up 2%, according to a company press release. The retailer reported that comps were up 3.4% in the first quarter, while net income increased by 17%.
- Dick’s is expanding its House of Sport concept this year, with nine more locations planned to open before the back-to-school season in 2023 and an additional 10 set to open by 2024. That’s on a path to operating 75 to 100 House of Sport stores by 2027.
Dive Insight:
While many in the retail industry are struggling with consumers pivoting away from discretionary spending, Dick’s Sporting Goods is not feeling that impact. Unlike Foot Locker, which is more sneaker and apparel driven, Dick’s offers a lot of equipment necessary for sports, which Hobart pitched as non-discretionary.
“If you are a runner or you want to be outside or you want to play golf or you have a kid and they play team sports, it's not really discretionary to need to replace that equipment,” Hobart said.
GlobalData Managing Director Neil Saunders noted in emailed comments that the overall sporting goods and apparel market has softened, and so have Dick’s growth figures over the last few quarters.
“However, the fact Dick’s is still in growth shows it is bucking the trends and is taking market share,” Saunders said. That includes in the more casual, everyday apparel space.
Dick’s is in growth mode in several other ways. The retailer closed its acquisition of Moosejaw in March and expects the business to contribute $100 million in the 10 months of 2023 Dick’s will have owned it for, Chief Financial Officer Navdeep Gupta told analysts.
The retailer continues to revamp its store experiences, including adding premium footwear sections to 20 stores in the quarter and planning for that experience to reach 75% of stores by year end. That’s in addition to opening more House of Sport stores, which will be a “significant” part of Dick’s growth over the next few years, according to Hobart. The retailer is taking learnings from its House of Sport locations and translating them into a “next-generation” concept for its core store fleet. The next-generation Dick’s concept will be a more standard 50,000 square feet.
Public Lands, which was launched in 2021, is still in a test-and-learn phase, but could be helped by the Moosejaw acquisition, Gupta said.
Also expanding are Dick’s private labels. The retailer’s VRST and Calia brands both entered the golf category and Calia also now sells fitness accessories.
