While many of its retail competitors have posted sales declines and dimmed their outlook, business is bright at Dick’s Sporting Goods.
The Pittsburgh-based retailer saw third-quarter sales rise 2.8% to $3.04 billion, up from $2.96 billion in the comparable period of 2022. On a comparable basis, sales rose 1.7%, on top of a 6.5% increase in the third quarter of 2022. Net income slid 12% to $201 million from $228 million the year ago.
Both sales and profits beat expectations, and the retailer raised its forecast for the full year. It now expects sales gains between positive 0.5% and 2%.
The numbers impressed observers, who point out that Dick’s continues to perform better than it did before the pandemic, particularly in apparel, a category that helped the retailer do better than competitors during the recent back-to-school season.
Increasingly, Dick’s has become a destination for everyday casual clothing, as well as for sporting apparel, writes Neil Saunders, managing director of GlobalData. “Part of this is because clothing tastes and preferences have become more casual, which includes the rise of athleisure garments,” he says. “However, part is also because Dick’s has rounded out its assortment with new brands and a better own-brand offering. This has allowed Dick’s to attract new shoppers and enlarge the share of wallet it gets from existing shoppers. In doing this, Dick’s has taken share from other retailers, especially from department stores.”
And while consumers have been cutting back in other channels, Dick’s saw an increase in both traffic and ticket price, writes Justin E. Kleber, who follows the company for Baird.“Dick’s investments in assortment and the in-store/digital experience continue to fuel impressive market share gains,” he writes.
Seth Basham, an analyst who follows the company for Wedbush and currently rates Dick’s as neutral, is also encouraged by the quarterly results, “in a weakening consumer discretionary spending environment, the sporting goods industry is re-baselining higher than pre-pandemic, and Dick’s appears to be gaining market share on the back of growth, service and tech investments,” he writes.
Basham says the company also benefits from the House of Sport concept in its large-format experiential stores. Those stores are “at least meeting expectations,” with the company planning 10 more stores next year.