This Warm Winter Dick’s Sporting Goods Wasn’t So Hot

This Warm Winter Dick’s Sporting Goods Wasn’t So Hot


Chris Hill: A warmer than expected winter
is getting the blame for falling sales at Dick’s Sporting Goods. The company says same-store
sales fell 2.5%. Fair charge, Jason? Jason Moser: Perhaps. I think, we’ve heard
a lot about the bankruptcy of Sports Authority here. I would advise people to not leap to
the assumption that just because Sports Authority claimed bankruptcy that Dick’s Sporting Goods
has it made here. I think the biggest challenge Dick’s Sporting Goods faces right now is its
position in the value chain there. So, a time ago, retailers like Dick’s Sporting Goods
had a far stronger competitive position, because they were seen as kind of the gateway to a
lot of these very popular brands. So, the thing is, now, with the advent of the internet,
and the evolving business models, the direct-to-consumer model is really taking over. So, brands like
Under Armour and Nike are able to offer their goods to customers directly. So, we focus
on those direct-to-consumer sales that Under Armour and Nike continue to grow at rapid
rates, 25% and 26% respectively, in their most recent quarters. And, while Dick’s Sporting Goods is doing
well growing their e-commerce business, it still pales in comparison to what Nike and
Under Armour are able to do. And furthermore, those companies are able to really target
their customers a bit more, getting the data and understanding really what their customers
want. So, again, I think that Dick’s is caught a little bit here in a tough spot, because
they need to offer a number of different brands in a number of different areas of the sporting
world, and it costs a lot of money to maintain those big stores that they have. So, while
they’re continuing to try to tout the experience to bring traffic in, a lot of people are finding
there are other ways to get those brands that they really like. So, I like the company.
I think they will gain share from the Sports Authority bankruptcy. But, again, I would
caution investors not to leap to the assumption that they’ve just got it made. Ron Gross: Is Sports Authority liquidating?
Or are they just restructuring? Moser: I believe it’s just restructuring. Gross: So, they’ll maybe close some under-performing
stores, but there’ll still be a presence. Moser: Yeah, we’ll see a presence out there.
But I think the bankruptcy, honestly, is probably the least of their worries. We’ve stepped
into Sports Authority before, it’s just been a miserable experience from day one. They
need to go to marketing school. Jeff Fischer: I think so many retailers in
the long term face getting squeezed more and more by apps, by companies that are quicker
on their feet and innovative. And if your argument is, like a Cabela’s, maybe, or in
this case, entertainment, “Come on in and be entertained,” well, there are a lot of
other ways to be better-entertained than a retail store.

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