While its losses for the quarter are higher than predicted, Dick’s Sporting Goods is showing plenty of resilience. Driven by America’s intense desire to stay fit while staying at home, the Pittsburgh-based retailer says it’s well positioned to gain on health and wellness trends.
And while Dick’s posted a 30% drop in comparable-store sales, observers are encouraged that four weeks into the second quarter -- a period when an average of 44% of its store fleet was still closed -- it notched a decline of just 4% in sales, compared to 2019.
Still, the first quarter was bleak. Total sales sank 31%, to $1.33 billion. And the company swung to a loss of $143.4 million, compared with net income of $57.5 million in the first quarter of 2019.
But despite the murky outlook ahead, Dick’s is bullish on its prospects. “We believe coming out of the current crisis, health and fitness will become even more important to the consumer,” says Edward W. Stack, chairman and CEO. “As the leader in the sporting goods retail sector, our relationships with key brands have never been stronger, and we are in a great place to support this demand.”
The company also says that through March 10, as stores began to close, its same-store sales had been up 7%, providing evidence its strategy had been on target.
Those signs of strength in the second quarter may even signal some market share gains in the coming second half, writes Jonathan R. Komp, an analyst who follows the company for Baird, in his note on the results. “The company appears to be benefiting from solid execution, including across newer omnichannel offerings.”
Komp says that marketing will increase in the second half and among stores that have reopened, “many have returned to positive comparable levels, with ecommerce sustaining at high growth levels.”
With Dick’s pointing to especially strong results in fitness, outdoor items like boats and bikes, as well as running footwear, Komp adds those areas “may reflect behavioral shifts as consumers prioritize health and fitness.”