Dick’s plans 9 House of Sport stores in 2023 and increases sales by 5.3%

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diving letter:

• A few days later Foot Locker reported an 11% drop in sales Amid weak consumer demand, Dick’s Sporting Goods saw a different story: Sales rose 5.3% in the first quarter, and CEO Lauren Hobart told analysts the retailer felt “very good about how our consumers are doing.”
• At a time when many retailers are lowering their forecasts, Dick’s maintained its 2023 outlookAccording to a company press release, compensation will remain unchanged and increase by 2%. The retailer reported that first-quarter sales rose 3.4% while net income rose 17%.
• Dick’s is expanding its House of Sport concept this year, with nine more locations scheduled to open ahead of the 2023 back-to-school season, and another ten to open by 2024. That’s on track to operate 75 to 100 House of Sport stores by 2027.

Insight into the dive:

While many in retail are struggling as consumers move away from discretionary spending, Dick’s Sporting Goods is not feeling the impact. Unlike Foot Locker, which caters more to sneakers and apparel, Dick’s offers a lot of sports gear that Hobart described as non-discretionary.

“If you’re a runner or you want to be outside, you want to play golf, or you have a kid that plays team sports, there’s really no discretion in replacing that gear,” Hobart said.

GlobalData chief executive Neil Saunders, in emailed comments, pointed out that the overall sporting goods and apparel market has slowed, as has Dick’s growth numbers over the past few quarters.

“However, the fact that Dick’s is still growing shows that it’s bucking trends and taking market share,” Saunders said. This also includes the more casual, everyday clothing sector.

Dick’s is in growth mode in many ways. The retailer has completed the acquisition of Moosejaw in March and expects the company to contribute $100 million in 10 months of 2023, for which Dick’s will own it, CFO Navdeep Gupta told analysts.

The retailer continues to revamp its in-store experience, including adding premium footwear to 20 stores this quarter, and plans to expand this experience to 75% of its stores by the end of the year. This is in addition to opening more House of Sport stores, which Hobart says will be a “significant” part of Dick’s growth over the next few years. The retailer takes insights from its House of Sport locations and translates them into a “next-gen” concept for its core store fleet. The next generation Dick’s concept will feature a more standard 50,000 square meter space.

public land, which was launched in 2021is still in the testing and learning phase, but could be helped by the Moosejaw acquisition, Gupta said.

Dick’s own brands are also expanding. The retailer’s VRST and Calia brands both entered the golf category and Calia now also sells fitness accessories.