Dick's sales spiked 10% last year, but the retailer warns of possible slowdown
Published March 9, 2021
Dick's Sporting Goods posted a record 9.9% increase in comparable sales for the full fiscal 2020, while the retailer doubled its digital sales as consumers shifted their activities and shopping methods during the pandemic.
In the fourth quarter, comps increased 19.3%, pushing top-line sales to more than $3.1 billion. E-commerce sales were up 57% in Q4 and represented about a third of the sporting goods retailer's net sales.
The company's outlook for 2021 is not quite as bright, with comp sales estimated to grow 2% on the high end or decline by 2% on the low end. Dick's is also planning to open 12 stores during 2021, including six specialty concept stores and six Dick's stores.
For retailers across the board, trying to gauge success in 2021 is a difficult calculus. That goes for retailers that suffered massive declines in 2020 — including many apparel retailers and department stores — and those that trade in categories that took off in the social distancing era.
Along with home goods, toys, leisurewear and other hot sectors, sporting goods and outdoor equipment saw a boon last year, leading to a spectacular year at Dick's. The year was so good that the company is using 2019 as a more realistic baseline for its 2021 estimates because of the "uneven nature of sales and earnings in 2020," Dick's said.
Dick's growth is all the more impressive by the fact that the retailer's stores, unlike mass merchant competitors like Target and Walmart, were temporarily closed last spring as the country tried to "flatten the curve" of COVID-19's spread.
"We've never had a year quite like 2020. We were challenged in numerous ways, as were so many others, but as an organization we not only survived — we thrived, delivering record-setting sales and earnings," said Ed Stack, Dick's executive chairman and chief merchandising officer, in a statement.
At least for now, the pandemic could keep driving Dick's sales. "With a lot of gyms and fitness centers around the country still closed, and with many people nervous about venturing into such destinations as they gradually reopen, Dick's continues to benefit from the exercise at home trend," Neil Saunders, managing director of GlobalData, said in emailed comments, pointing to continued strong sales of free weights, bikes and exercise equipment. During Q4, sales of sporting apparel and sneakers did well too, benefiting Dick's.
Saunders also pointed to a "mini spending splurge" as consumers, preparing for post-pandemic life, "are looking to shed the pounds put on during the lockdown." At the same time, Dick's faces potential disruption to its current advantages as gyms reopen and more retailers get into the sporting goods game, Saunders noted.
For now, Dick's is firing on all cylinders and making the most of the competitive advantages it already enjoyed. "Dick's is gaining share through its curated assortment of national brands, differentiated private label portfolio, and e-commerce, which is helped by its off-mall locations that allow for social distancing and curbside pickup," Telsey Advisory Group analysts led by Joseph Feldman said in an emailed research note.