Why Dick’s Sporting Goods Stock Has Risen 19.7% This Year


Dec. 4 2020, Updated 10:53 a.m. ET

Stock up 19.7%

As of July 9, Dick’s Sporting Goods (DKS) stock had risen 19.7% year-to-date. In comparison, Hibbett Sports (HIBB) had risen 15.7%, and Foot Locker (FL) had risen 14%. However, Big 5 Sporting Goods (BGFV) had fallen 5.3%. The S&P 500 had risen 4.1%.

Dick’s Sporting Goods reported better-than-expected fiscal Q1 2018 results. Sales rose 4.6% YoY (year-over-year), and the company raised its EPS outlook for fiscal 2018 to $2.92–$3.12 from $2.80–$3.00. Lower tax and share buybacks are expected to drive its performance.

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Can DKS stock sustain its momentum?

Dick’s Sporting Goods is focused on driving its omnichannel and digital capabilities by improving its website and working on a faster checkout process. The company is allocating more store space to private brands Field & Stream, Top Flite, Walter Hagen, and Calia. It believes that amid tough competition, exclusivity and product differentiation could boost its private brand sales. The company is also streamlining its supply process, has done away with dispensable vendors, and is launching a new TV campaign in the first quarter of 2018.

To attract and retain customers, the company is revamping its ScoreCard loyalty program. The program has over 20 million members, who contribute 70% of the company’s overall sales.

The company is also slowing down its store expansion. For its new store openings, it is targeting new and underpenetrated markets in locations where many retailers, including Golfsmith and Sports Authority, have shut their stores.

DKS, which operated 724 Dick’s Sporting Goods stores as of May 5, expects to open 19 new stores in fiscal 2018. However, ongoing investments are likely to result in higher expenses, which could impact the company’s profitability and bottom line.


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