Sporting goods retailer, DICK'S Sporting Goods Inc. (DKS - Free Report) announced a multi-year collaboration with First Insight, which is a leading provider of predictive analytic solutions.
With its consumer-driven solutions, First Insight will help this Pennsylvania-based sporting retailer to expedite decisions with regard to pricing, selecting product designs and making merchandise purchases. Notably, this partnership, which is subject to aggressive due diligence, will allow DICK’s Sporting to get strategic views on thousands of designs and products.
First Insight will enable the company to assess real-time customer preference and pricing information on products much ahead of market launch, through web engagements. Thereafter, this data will be filtered by First Insight to identify products with maximum sales and gross margin scope, and hence benefit DICK’s Sporting.
Also, these solutions will be applicable on both consumer-test branded as well as private label products across miscellaneous categories like sports equipment, footwear, accessories and apparel.
Management at DICK’s Sporting believes that First Insight will play a significant role in its decision-making course. However, the company will evaluate the solutions of the latter over a considerable period, after which it expects to generate solid returns on investments.
However, DICK’s Sporting currently carries a Zacks Rank #5 (Strong Sell). We believe the poor ranking stems from the company’s recent lowering of its sales and earnings outlook for fiscal 2015 following soft results for the third quarter of fiscal 2015.
During the third quarter, both the top and the bottom lines missed the respective Zacks Consensus Estimate. Moreover, comparable store sales (comps) edged up only 0.4%, against management’s expectation of 1–3% growth. This was attributable to sluggish sales trends toward the end of the quarter, which resulted from warm weather.
Nonetheless, results improved year over year as the company’s expansion of its omni-channel network, and powerful marketing and merchandising strategies are paying off. These factors, along with DICK Sporting’s customer-oriented strategies (like the partnership with First Insight) and a healthy financial status bode well.
Stocks to Consider
Better-ranked stocks in the same industry include CST Brands, Inc. and Sally Beauty Holdings Inc. (SBH - Free Report) , each with a Zacks Rank #1 (Strong Buy) and ULTA Salon, Cosmetics & Fragrance, Inc. (ULTA - Free Report) carrying a Zacks Rank #2 (Buy).
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