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DICK'S Sporting's Store & Online Growth Strategy on Track


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In a retail world where the very existence of brick and mortar stores is under threat with online shopping rapidly gaining preference with the customers, DICK’S Sporting Goods Inc. (DKS - Analyst Report) stands out with its strategy to remain focused on aggressively expanding its retail store base, alongside developing its eCommerce capabilities.

This sporting goods retailer expects its store expansion and eCommerce endeavors to help achieve its long-term revenue target of $8.7–$9.0 billion by the end of fiscal 2017. On its path to reaching the aforementioned revenue goal, DICK’S Sporting targets expanding its retail store count to 735–750 by the end of fiscal 2017 from 644 stores at the end of fiscal 2015.

The Store Strategy

DICK'S Sporting remains dedicated toward its strategy of store expansion and enhancement of store productivity for sustained improvement. The company operates stores under three banners, including its namesake, Field & Stream and Golf Galaxy stores, which respectively cater to customers’ sporting goods, outdoor and golf needs. The company’s focus on store growth is well evident from the numerous stores it has opened year-to-date.

Recently, through September alone, the company announced plans to open nine retail stores in various locations across the country, along with the opening of two relocated stores. Apart from full-line DICK’S Sporting stores, the aforementioned store openings include one store in the All-American Sports Center format that accommodates both its namesake and Field & Stream stores under the same roof.

Further, as the company entered October it announced plans to make an extravagant first appearance in the Houston area with the inauguration of 10 stores in the region in one shot. These stores opening on Oct 21 will include first six DICK’S Sporting stores and first two Field & Stream stores, alongside two new Golf Galaxy stores.

The new DICK’S Sporting stores will be located at the Baybrook Mall, Deerbrook Mall, The Shoppes at Parkwest in Katy, First Colony Mall in Sugarland, Willowbrook Mall and Woodlands Mall. Among these, the Baybrook and Katy locations will house DICK'S Sporting, Field & Stream and Golf Galaxy stores all under the same roof. These stores will offer customers the ease to shop for their sporting goods, outdoor and golf needs at the same place, thereby enhancing their shopping experience.

That said, it is apparent that DICK’S Sporting not only focuses on the expansion of each of its store formats, but also experiments new store formats, through the combination of these formats. In fiscal 2016, the company plans to open nearly 36 namesake stores, 9 Field & Stream outlets, and 2 Golf Galaxy stores.

eCommerce Development on Track

Additionally, the company remains committed toward undertaking investments in omnichannel business, as is obvious from its increased eCommerce penetration. The company launched its first Field & Stream eCommerce website in Oct 2016, thereby ending the second phase of its eCommerce development plan. Previously, the company had launched its Golf Galaxy website in Mar 2016. Further, the company remains on track to relaunch on its own web platform in Jan 2017.

That said, we believe that this full-line sporting goods and apparel retailer will benefit from its in-store action and online growth strategies. DICK’S Sporting has been gaining from the expansion of its omnichannel network, along with powerful marketing and merchandising strategies.

Apart from DICK's Sporting, there are many other players like Ross Stores Inc. (ROST - Analyst Report) , Nordstrom Inc. (JWN - Analyst Report) and DSW Inc. (DSW - Snapshot Report) , which are firing on all cylinders with regard to expansion of store base. While Ross Stores operates as a full-line sporting goods retailer through more than 645 stores, Nordstrom is a leading fashion specialty retailer that currently operates 334 stores. DSW Inc is a footwear and accessories retailer, with its store count likely to approach the 500 mark soon.

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