More growth for Dick’s Sporting Goods
Pittsburgh Dick’s Sporting Goods reported a modest improvement in fourth-quarter profits and solid sales growth due to new store openings and a 2.5% increase in same-store sales.
Total fourth-quarter sales increased 10.7% to $1.3 billion, and net income, adjusted to exclude prior-year charges related to asset impairment, merger and integration costs, increased 8.3% to $67.4 million.
Chairman and CEO Ed Stack said that although 2009 was challenging, the company successfully generated more sales, managed inventory levels and exercised financial discipline.
“As a result, we generated higher profits, leveraged expenses, further strengthened our balance sheet and believe we gained market share in 2009,” Stack said.
The company opened a total of 24 new stores throughout 2009 and ended the year with a total of 510 units, consisting of 419 Dick’s Sporting Goods stores, and 91 Golf Galaxy stores. This year the company plans to open at least 24 Dick’s stores and five Golf Galaxy stores.
Dick’s ended the year with $225 million in cash on its balance sheet and no borrowings under it credit facility. Expectations for first quarter same-store sales call for an increase in the range of 2% to 3%, versus a 6.1% decline during first quarter 2009.
A perfect storm for shoplifters
Retailers are fortunate the majority of customers are honest and choose to pay for the items they need and want. However, even the most well intentioned shoppers can succumb to the allure of theft when their moral compass is exposed to the polarizing forces of a recessionary economy and a retail environment where the perceived risk of apprehension is low due to thinly staffed stores. As a result, retail theft characterized as amateur or opportunistic is on the rise, according to 78% of retailers responding to a survey conducted by the Retail Industry Leaders Association (RILA). While amateur and opportunistic thieves are more active, all types of theft have increased, with 74% of retailers reporting seeing an increase of stolen items found in online marketplaces, and 65% reporting increased theft by organized groups.
A rebound awaits in key categories
Target is the beneficiary of a perceived quality gap relative to Walmart, and that typically helps it in head-to-head comparisons where such categories as apparel and home are concerned. Unfortunately, consumer decision-making is seldom so linear, and Target has a slew of other retailers against whom it must compete, and recent sales results suggest it has work to do. Target has reported weak (flat or declining) results for its apparel and home categories and did so again in February. However, such companies as TJX, Ross and Kohl’s, which appeal to the same value-oriented shoppers as Target, produced solid gains. TJX said its February same-store sales increased 10%, Ross produced an 11% increase and Kohl’s was up 3.7%. Also producing gains were such competitors as Nordstrom, Macy’s and JCPenney, which serve customers squarely in the crosshairs of Target’s “expect more, pay less” value proposition. Macy’s reported a better-than-expected increase of 3.7%, and Nordstrom topped analysts’ views with a 10.3% increase. JCPenney’s same-store sales rose 1.2%, which was also better than expected.