Full-line sporting goods retailer DICK'S Sporting Goods Inc. (DKS - Analyst Report) is aggressively expanding its operations by opening stores at new locations and collaborating with other companies to grow business. The latter measure was evident from the company’s recently concluded multi-year partnership agreement with ESPN, the all-sports media outlet owned by The Walt Disney Company (DIS - Analyst Report).
As per the deal, DICK’S Sporting has now become an exclusive e-Commerce supplier of all licensed merchandise and sporting goods on ESPN.com as well as other related digital properties. The company did not disclose any financial terms of the deal.
In the near future, the tie-up between two companies will likely enable fans to purchase licensed fanwear available at the ESPN.com, ESPN The Magazine, ESPN Radio and mobile properties like ScoreCenter, GameCast and WatchESPN.
The agreement also strengthens its existing relationship with ESPN. Prior to this, DICK’S Sporting and ESPN had jointly sponsored the coverage of ‘Champ Week’ for college basketball earlier this year. Apart from this, in late August, ESPN telecasted DICK’S Sporting’s ‘Hell Week,’ a documentary based on an intense pre-season training camp of a high school football teamon ESPN2 and ESPNU.
We believe that the partnership will facilitate DICK’S Sporting to expand its customer base and drive top-line growth. Apart from forming alliances with other companies, DICK’S Sporting is expanding its store base to drive growth. The company intends to increase retail store count to 800 by the end of fiscal 2017 from 518 at the end of fiscal 2012. Further, the company will remodel its existing stores from time to time in order to keep them up-to-date and productive.
DICK’S Sporting is also concentrating on customer needs in order to boost sales. Further, to ease customers’ shopping experience, the company has introduced a mobile application for iPhones and Android Smartphones that enables customers to locate DICK’S Sporting stores in any particular area and buy goods directly, using the application.
We believe that the company’s strategic measures of consolidating its store base and the use of technology to provide better services will enhance its relationship with present customers, attract new customers and effectively promote products.
Other Stocks to Consider
DICK’S Sporting currently carries a Zacks Rank #3 (Hold). However, other stocks in the retail sector that are worth a look include Five Below, Inc. (FIVE - Snapshot Report) and Marinemax Inc. (HZO - Snapshot Report). Both of these have a Zacks Rank #2 (Buy).