Dick’s Sporting Goods details expansion; tops Q4 earnings, sales
The struggles — and exits — of former rivals has proved a boon for Dick’s Sporting Goods, which reported fourth quarter sales and earnings on Tuesday that beat the Street.
The company also announced aggressive store expansion plans.
In 2017, Dick’s plans to open approximately 43 Dick’s Sporting Goods stores, and relocate approximately seven stores. It also expects to open approximately nine Golf Galaxy stores and eight Field & Stream stores this year, largely adjacent to new or relocated Dick’s stores. (The openings include former Sports Authority and Golfsmith locations that the company plans to convert to Dick’s and Golf Galaxy stores.)
For the quarter ended January 28, Dick’s reported net income of $90.2 million, or $0.81 per diluted share, down from $129 million, or $1.13 per share, in the year-ago period. During the quarter, the company incurred pre-tax charges totaling $93 million, which included a $46 million to write-down the value of inventory that does not fit within its new merchandising strategy, and $47 million related to its acquisitions of former Sports Authority and Golfsmith stores.
Net sales for quarter increased 10.9% to approximately $2.48 billion, in line with expectations.
Same-store sales increased 5.0%. Same store sales for Dick’s namesake brand increased 5.3%, while Golf Galaxy increased 13.2%.
Online accounted for 17.9% of total net sales in the quarter, compared to 15.7% in the year-ago period. For the year, e-commerce was 11.9% of total net sales, compared to 10.3% for the previous year.
"We are very pleased with our strong fourth quarter results, as we delivered a 17% increase in non-GAAP earnings per diluted share driven by strong comp sales and gross margin expansion,” said Edward W. Stack, chairman and CEO. “We realized meaningful market share gains and saw growth across each of our three primary categories of hardlines, apparel and footwear. In 2016, we capitalized on opportunities in the marketplace, and further solidified our leadership position by enhancing the shopping experience in our stores, building brand equity and successfully relaunching our e-commerce business on our own web platform."
In 2017, Dick’s will implement a new merchandising strategy to rationalize its vendor base and optimize its assortment to deliver a more refined offering for our customers
Stack continued, "In 2017, we will continue to be aggressive and evolve our business. We will implement a new merchandising strategy. “We are in the process of reviewing our entire vendor base, which will be segmented into strategic partners and transactional vendors, with tertiary vendors being eliminated,” Stackhouse said. “This strategy, combined with our efforts to enhance our digital capabilities, will enable us to stay ahead of consumer trends and differentiate us from the competition."
Analyst Neil Saunders, managing director of GlobalData Retail, was encouraged by Dick’s vendor rationalization plans.
“In our view this is a sensible step, not least because although Dick’s offering is comprehensive, it can also come across as a little jumbled and undisciplined,” Saunders commented. “Some pruning should remedy this, and we believe it will reduce costs as well as deepening relationships with strategic partners which will allow it to create differentiated products. The latter will be important as Dick’s starts to compete more with branded specialists like Under Armour.
As of January 28, 2017, Dick’s operated 676 Dick’s Sporting Goods stores, 91 golf specialty stores and 27 Field & Stream stores.
Sunrise Brands re-launches celeb clothing line
Thanks to a new partnership, shoppers once again can purchase Eva Longoria-designed apparel.
The Eva Longoria Collection launched Tuesday, March 7, under www.evalongoria.com. The brand, which was originally sold through The Limited, is now part of Sunrise Brands — the apparel manufacturer and distributor that was in the running to acquire the e-commerce business and intellectual property of the bankrupt women's apparel retailer.
The new online store offers exclusive pieces from the lifestyle brand, as well as behind-the-scenes video content of Longoria sharing the inspiration for her collection, and campaign images.
The collection offers a wide range of sizing, and pieces range between $39 and $159.
"Eva continues to impress me with her passion, commitment and dedication to the development of this brand,” said Rachael Barnard, CEO, Sunrise Brands. “As her partner, Sunrise Brands will help her expand her sense of style into other product categories in the near future.”
The brand’s next collection is slated for fall 2017, and it’s currently being showcased at The Sunrise Brands Showroom in NYC, the company said.
Home improvement chain debuts VR-based ‘how to’ classes
Lowe’s Cos. is embarking on the next chapter of its virtual reality journey.
Starting Tuesday, March 7, the home improvement chain’s store in Framingham, Massachusetts, debuted its “Holoroom How To,” Lowe’s first-ever virtual reality DIY skills-training clinic. As consumers enter the interactive virtual reality (VR)-based environment, they wear an HTC Vive headset to receive “hands-on” tutorials on basic DIY skills, including supplies and steps, needed to complete a project.
The first module teaches how to tile a shower.
“This allows us to teach our customers in a way that we could have never previously imagined, and give them the confidence they need to undertake a daunting renovation,” according to Lowe’s Innovation Labs.
The chain’s prior virtual reality programs helped customers visualize their kitchen and bath renovations, “but we have found a unique opportunity to use the VR platform for skills training,” according to the chain.
“Our studies show that Holoroom How To actually lifts unskilled DIYers to a memory performance level comparable to that of experienced DIYers,” Lowe’s said. “This allows us to teach our customers in a way that we could have never previously imagined, and give them the confidence they need to undertake a daunting renovation.”
Two stores in Canada will be next to feature the VR-based classes.