On A Growth Streak, Dick's Flexes New Formats

Image above: Basketball legend Charles Barkley stars in Dick's new ads.

Dick’s, coming off a quarter of record sales, continues to expand its new formats. The company is opening its third House of Sport. The Minnetonka, Minnesota store is expected to be an experiential extravaganza, with a 35-foot rock climbing wall, high-tech batting cages, golf bays and a putting green.

It will also include 20,000 square feet of outdoor turf and track, giving shoppers even more room to try out products. The store will convert the turf to an ice rink in the winter, offering open skate time and hockey drills.

Dick’s opened its first two House of Sport locations last year, calling the new concept an opportunity to win over new shoppers and test and learn ideas to translate into its regular fleet. With community programming that includes sports clinics, climbing classes, summer camps, birthday parties and yoga classes, these locations are meant to make hands-on sports more exciting -- and exploratory.



The House of Sport news comes after the Pittsburgh-based chain announced its latest financial results, with fourth-quarter sales rising 7.3% to a record $3.35 billion. Compared to the fourth quarter of 2019, sales are up 28.5%. Net income for the fourth quarter totaled ended at $346.1 million, an increase of 43%.

Customers are returning to physical stores, with brick-and-mortar results notching a 14% gain. But that’s come at the expense of ecommerce sales, which fell 11%. Ecommerce accounted for 27% of sales in the quarter, down from 32% in the year-ago period.

To increase ecommerce sales, Dick’s is amping up marketing, releasing a string of new spots starring Charles Barkley even as it leans into its ecommerce offerings.

It’s also released new ads featuring its running products.

The largest sporting goods retailer, with an 8% market share, Dick's is looking for growth in many places, particularly where it can flex a technology edge into physical retail experiences. In addition to the House of Sport concept, that includes revamping Golf Galaxy. It’s also opening two Public Land -- its experiential outdoor store concept. And it’s expanding Going Going Gone!, its clearance stores.

All this progress is an indication that even as pandemic restrictions ease, consumers are still taking fitness seriously.

And analysts are upbeat about Dick’s ambitious plans, which include aggressive expansion of its private-label offers, as well as a commitment to Nike products.

Dick’s “is a growth company taking market share, building on momentum through the past few years in merchandising,” writes Seth Basham, who follows the company for Wedbush Securities. That’s especially true for its “shop-in-shops with brand experiences, omnichannel prowess, new stores, and personalization.”

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