Dick’s bets on House of Sport brand, shutters Field & Stream
Dick’s Sporting Goods is trying to appeal to customers who want an engaging, convenient shopping experience by driving a major expansion of its House of Sport brand.
At the same time, the retailer is closing all 17 of its remaining Field & Stream stores, 12 of which were already closed in the fourth quarter, CFO Navdeep Gupta said during a conference call on Tuesday. Dick’s plans to convert the remaining stores to its House of Sport concept or large-scale Dick’s stores by 2024.
Currently, Dick’s only operates three House of Sport locations in Rochester, New York; Knoxville, Tennessee; and in Minnetonka, Minnesota. Looking ahead, “House of Sport will be an important part of our future growth story,” said Dick CEO Lauren Hobart, according to a transcript of the Seeking Alpha earnings call.
Dick’s describes House of Sport as “a place to connect and play.” Stores typically have interactive areas such as a climbing wall, batting cages, golf simulators, and equipment services such as baseball glove steaming and racquet stringing. The company plans to open nine House of Sport locations this year by remodeling eight existing Dick’s and Field & Stream combination stores and moving one additional store.
Ten of the stores are planned for 2024. Dick’s plans to open 20 more House of Sport locations over the next two years. So far, the company has confirmed that these locations will include Boston, Pittsburgh and Binghamton, New York. The retailer also plans to open a location in Chesapeake, Virginia, a company spokesman confirmed to Retail Dive on Thursday.
Over the next five years, the retailer plans to operate from 75 to 100 House of Sport locations. Although the House of Sport concept debuted in 2021, Hobart says it has become scalable and highly profitable. As a result, “we’re leaning on that growth,” Hobart said. “We’re very, very optimistic about House of Sport and what it can do for our athlete experience in our business.”
The retailer began selling its Field & Stream stores in 2019. The move was part of a push to withdraw from the hunting ground. Dick’s stance on guns, including stopping sales of assault rifles at Field & Stream in 2018 simultaneously attracted negative and positive attention from gun rights and gun control advocates.
Also on Tuesday, Dicks reported fourth-quarter net sales of $3.6 billion, up 7.3% year over year. Fourth-quarter comparable sales increased 5.3% year over year, compared to growth of 6.6% a year ago. Hobart described the holiday quarter as “a strong end to another strong year.” The company reported net sales of $12.4 billion for the full year. While that’s less than a 1% year-over-year increase, it’s up 41% from 2019.
Executive Chairman Ed Stack said 2022 was “the highest-grossing year in our company’s history.” Looking ahead, Dick’s guidance for 2023 puts earnings per share in the range of $12.90 to $13.80 and comparable-store sales flat to grow 2%.
Hobart said the pandemic has pushed consumers to view health and wellness “as necessities, not discretionary,” further helping the retailer to grow sales. That sentiment could explain the company’s growth in a market segment that some still see as purely discretionary.
Wedbush analysts, led by Seth Basham, had a similar opinion.
“Sporting retail continues to benefit from fundamental shifts in consumer behavior, including a greater focus on health and wellness, participation in outdoor activities and greater interest in sporty lifestyle products,” Wedbush analysts said in a statement.
Basham also said Dick’s bottom line will benefit from increasing its store footprint as it adds House of Sport locations.
Dick’s is well positioned to drive market share gains in the $140 billion sporting goods industry, of which the company has an 8% market share, according to Wedbush. Dick’s also operates Golf Galaxy, Public Lands, Going Going Gone! and Warehouse Sale Stores and GameChanger, a sports app for teens.