With digital transformation being the order of the day, many retailers are undertaking technological advancements, to keep pace with the evolving scenario. Progressing on these lines, DICK's Sporting Goods, Inc. (DKS - Free Report) announced the inauguration of a new DICK'S Team Sports HQ office in San Diego, yesterday. Serving as west coast’s technology and innovation hub, this center will drive the company’s digital transformation endeavors forward.
This new technology center comes as part of the company’s efforts to help sports associations focus on coaching young athletes, rather than spending time on the administrative arrangements required in organizing a league. This will become easier for many youth sports associations across the U.S., as the new Team Sports HQ office will offer management solutions, cloud-based administrative infrastructure, analytics and communications to National Governing Body (NGB) customers.
Progress at DICK'S Team Sports HQ
Well, DICK'S Team Sports HQ is a vital part of DICK’s Sporting’s business. Launched in Jan 2016, DICK'S Team Sports is known for its three main services. These include free league management services like websites and online registrations, FanWear shops and traditional uniforms, and access to donations and sponsorships.
This is not the company’s first effort to bolster its Team Sports HQ business. Evidently, the company announced the buyout of GameChanger Media in Nov 2016, in an attempt to strengthen DICK'S Team Sports HQ. This is because the former’s in-game mobile experience complements the latter’s endeavors to serve its nationwide youth, prep teams and leagues better, with enhanced tech capacities. Also, GameChanger’s ties with popular names like SportsEngine, Basketball Hall of Fame and Under Armour Association, will likely prove beneficial for DICK’S Sporting.
Apart from this, DICK’s Sporting also acquired Blue Sombrero and Affinity Sports, in Feb and Aug 2016, respectively – to enhance the services of its youth sports and leagues club platform. In fact, Affinity Sports forms part of the aforementioned west coast technology and innovation center.
Additionally, DICK'S Team Sports HQ was spelled out as the suggested technology provider for Little League Baseball and Softball, in Nov 2016. Notably, Little League has nearly 2.4 million participants, and more than 1 million coaches, local league officials and district administrators. It is also commendable that the company’s Team Sports HQ is currently catering to youth sports governing bodies that embody more than 9 million young athletes. These include National Police Athletic League, US Youth Soccer and PONY Baseball and Softball, among others.
Digital Efforts Bode Well for the Stock?
Clearly, DICK’S Sporting is firing on all cylinders to boost its digital strategies. In fact, the company is striving to develop every possible avenue to generate greater sales, with special focus on its ecommerce business, which generated about 9.3% of net sales in first-quarter fiscal 2017. Other than solidifying its Team Sports HQ business, the company has undertaken other efforts to support its digital transformation too.
Incidentally, the company successfully re-launched its website in the fiscal first-quarter which helped it to contribute largely to the top line. Prior to this, the company had launched its first Field & Stream eCommerce website in Oct 2016, which marked the end to the second phase of its development plan.
However, DICK’S Sporting has seen its shares plummet 24.9% on a year-to-date basis, underperforming the Zacks categorized Retail – Miscellaneous/Diversified industry’s drop of 5.8%. This could be partly accountable to lower-than-expected comparable store sales and sales, delivered in first-quarter fiscal 2017.
So, let’s see if these digital strategies can augment the top line and help the Zacks Rank #3 (Hold) stock revive.
Until then, investors can safely bet on better-ranked stocks in the same industry like Big 5 Sporting Goods Corp. (BGFV - Free Report) , Build-A-Bear Workshop, Inc. and Office Depot, Inc. (ODP - Free Report) .
Big 5 Sporting has a long-term earnings growth rate of 9%, and has a superb earnings surprise history. Further, the company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Build-A-Bear, with a long-term earnings growth rate of 22.5%, currently flaunts a Zacks Rank #1.
Office Depot which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 10.9%.
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