Amid a Weak Quarter, Shoes Are a Bright Spot for Dick’s Sporting Goods
Amid a slow quarter for Dick’s Sporting Goods, footwear outperformed as one of the retailer’s top categories.
“We saw tremendous growth in team sports and in footwear,” said Dick’s Sporting Goods CEO and president Lauren Hobart in a call with analysts discussing the results. She specifically called out the success of Nike as well as the company’s vertical brands.
In a presentation deck, Dick’s said its narrowly distributed premium product has been driving stronger sales and profitability. The retailer said it plans to convert about 100 more stores to have a “full-service footwear” selection in 2023, bringing this set-up to more than 75 percent of Dick’s stores. These footwear displays allow the retailer to showcase products from new and emerging brands. In Q1, Dick’s added premium full-service footwear to nearly 20 additional stores.
A general consumer interest in footwear, exclusive access to popular brands like Nike and in-store displays highlighting the product have all been factors behind the category growth.
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“We are meeting those consumer needs better than we ever have before,” Hobart said. “It’s a combination for us of assortment changes, overall experience and distribution changes.”
The retailer touted its continued partnership with the Swoosh, in footwear, apparel and marketing. Both entities partnered up earlier this summer for their largest joint marketing partnership to date, the second installment of the “Sports Change Lives” campaign which featured 10 athletes discussing how sports have changed their lives. The Nike apparel business was also “extremely positive” in Q2, Hobart said, despite a general slowdown in the category.
More broadly, apparel sales slowed at Dick’s in tandem with general weakness in this category across the industry, as consumers rein in their spending in discretionary categories. Dick’s still gained market share in apparel in Q2, despite the general softness.
“We’re very optimistic and bullish about apparel going forward,” she added.
Overall, Dick’s posted net sales of 3.2 billion, up from 3.6 percent the prior year. Net income for Q2 was $244 million, or $2.82 per share, versus $319 million and $3.25 per share a year prior. Analysts surveyed by Yahoo were looking for revenues of $3.23 billion and EPS of $3.81. Comp sales grew 1.8 percent in the quarter.
In light of the results, Dick’s downgraded its outlook for 2023 and now expects full-year earnings per diluted share of between $11.33 and $12.13. Comparable-store sales are still projected to be between flat and up 2 percent.
