Dick’s blew the doors off first-quarter 2021 expectations, both theirs and the streets. Upbeat would be an under-statement for today’s investor presentation. Chairman Ed Stack said "We are in a great lane right now, and 2021 will be our boldest and most transformational year. [The] future of retail is experiential, powered by technology and a world-class omnichannel operating model."

Ed Stack, and President and CEO Lauren Hobart reeled-off some extraordinary fiscal first quarter numbers. Net sales for Q1 increased 119 percent compared to 2020 and were up 52 percent over 2019. Same store sales were up 115 percent and ecommerce increased 14 percent over 2020. Ecommerce penetration has grown from 13 percent of net sales in 2019 to 20 percent of sales in the first quarter of 2021.

Revenue for the first quarter came in at $2.92 billion, versus analyst’s expectations of $2.18 billion, while earnings per share were $3.79 adjusted versus analysts’ expectations of $1.12 per share. Sales projections for fiscal 2021 are in the range of $10.2 to $10.8 billion, exceeding analysts’ projections of $9.8 billion. Comp sales growth guidance ranges from +8 percent to + 11 percent year over year.

Much to Celebrate

The team pointed to unparalleled consumer demand for sport and fitness products. Their balance of premium product, represented by both national and vertical brands such as VRST men’s premium apparel line, continue to give them a truly differentiated offering. The introduction of the highly experiential Dick’s House of Sport, the reimagining of Golf Galaxy with six-redesigned locations, new instore “Soccer Shops” and the new “Public Lands” retail concept point to a company that is building success upon successes.

Dick’s omnichannel capabilities enabled their stores to facilitate 90 percent of total sales in 2020, with 70 percent of online orders being fulfilled through the stores via ship-from-store, Curbside Pickup and BOPIS. And, with team sports back with a vengeance, along with strong consumer demand, there is far less of a promotional environment, which helps margins. It was also noted that the success of Dick’s new Going, Going, Gone stores which provide deep discounts, are also producing superior margins over typical instore close-out strategies.

As a touchpoint to the justifiably up-beat report, I reached out to Placer.ai for a store “traffic check.” For the month of April 2021, Dick’s Sporting Goods had 21.5 million visits, a 31% year over year increase. When compared with 2019 visit comps for the first four months of this year Dick’s showed monthly visit increases three of the four months, with April 2021 traffic up 15.5 percent.   

Investing in Authentic Experiences

As reported in my recent “Mall Footfall’s Back” article, the highly experiential Dick’s House of Sport, in my opinion, is a “game-changer.” The first of these 100,000+ square foot stores, developed with WD Partners, opened in April in Rochester, New York, and are reporting stellar numbers. The wraps come off the second of these interactive sport palaces next week in West Town Mall, Knoxville TN. Both stores are on the sites of closed Sears stores.

The theme of the new concept is “immersive product engagement” and great investments are being made in hands-on testing and authentic sporting experiences, including a 24,000 square foot outdoor Olympic grade running track. Inside the store a 40-foot climbing wall beckons, golf-bays provide a place to swing, and baseball players can test multiple bats in a batting cage that check swing velocity and distance. You can get a proper fit be it on a bike, a custom Lacrosse stick, or find the best cleats among a selection of 400 in the House of Cleats. Coming in-store events include youth sport camps, basketball tournaments, and sunrise yoga.

All in all, with nearly $2 billion cash in hand, the addition of 8.5 million new athletes last year (140M in database) and 7% category market share, there looks to be a healthy runway ahead for this category-dominant player.