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New Store Plans at Dick's Sporting

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Sporting goods retailer, Dick's Sporting Goods Inc. (DKS - Free Report) is slated to open three new stores, including one relocated store, on November 7 at various locations across the United States. Of the two new stores, one will be located at Stoneridge Village in Jefferson City, Missouri; and another at Spokane Valley Mall in Spokane, Washington. Further, the company will relocate its N. Springboro Pike store to Dayton Mall in Dayton, Ohio.

Last month, the company announced the debut of 17 new stores in various parts of the United States. Additionally, in September, it opened ten stores at different locations across the country. The opening of the stores remains in tune with the company’s previously announced plan of inaugurating 21 stores in the third quarter and relocating 3 existing stores.

For fiscal 2012, the company plans to open approximately 38 Dick's Sporting Goods stores. Moreover, it plans to relocate about five existing stores and one Golf Galaxy store in 2012. In the long-term, Dick's Sporting aims to open 400 additional stores, targeting a total store count of about 900 in the United States.

Dick’s Sporting’s arch rival, Big 5 Sporting Goods Corp. (BGFV - Free Report) , in its third quarter earnings release, announced plans to open 8 new stores in the fourth quarter of fiscal 2012, of which one relates to relocation, and one store will be shut down. For fiscal 2012, the company targets to open nearly 14 new stores, of which three will be relocations.

Further, the company plans to close 6 stores, two of which will be relocations. At year-end, the company’s total store count is currently expected to reach 414.

We believe that Dick's Sporting continues to progress well with its growth initiatives, which include expanding its store base and bringing in technological advancements to better serve its patrons. The company’s extensive network of stores helps it add market share while boosting its top line and providing a competitive edge over its peers.

Apart from expanding its store base, Dick’s Sporting is also focusing on buyers’ needs to generate growth opportunities that will augment sales. The company aims at providing top-notch shopping experience to its customers and has introduced a new mobile application for iPhones and Android Smartphones in the last month.

We believe that the company’s strategic measures of solidifying its store base and using technology to provide better customer services will enhance its relationship with clients, help attract and retain customers and also promote its offerings.

Currently, Dick’s has a Zacks #2 Rank, which translates to a short-term Buy rating. However, we remain slightly cautious on the stock due to sluggish economic recovery along with high household debt and unemployment level, which may restrain consumers spending on sporting goods items. Therefore, we are upholding our long-term Neutral recommendation, waiting to see further catalysts before becoming more positive on the stock.

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