Dick’s Still Bets on Sneakers Despite Foot Locker Stumbles

Dick’s Sporting Goods is forecasting a slowdown in its footwear business amid changing consumer preferences.

The retailer released quarterly earnings Tuesday (Aug. 25) showing a 4.6% uptick in comparable sales, driven in part by this summer’s World Cup tournament.

However, comparable sales for the Dick’s Foot Locker business fell 3.6%, “impacted by challenging conditions in the athletic footwear marketplace,” the company said in an earnings release. Dick’s is now projecting comparable sales outlook to a range of negative 2% to 0% for Foot Locker for the year.

Dick’s acquired Foot Locker last September for $2.4 billion, saying the deal gave it a larger piece of the sneaker market, as it now operates more than 3,200 stores, while positioning it to expand on a global basis.

Management said during an earnings call Tuesday that the company is seeing a pivot in the way consumers purchase new athletic wear, with shoppers increasingly shunning older, established product lines in favor of fresh styles.

“Consumer preferences are evolving, with athletes increasingly responding to newness, innovation and a broader set of brands,” said Edwin Stack, the company’s chairman.

He said the industry is experiencing a temporary “hangover” from older styles, but added, “I don’t think this is a demand issue. The consumer is looking for products that are new, innovative, different in the marketplace.”

At the same time, Stack said the company remained enthusiastic about the footwear business, describing a scenario in which a kid now needs “roughly five pairs of shoes,” from sneakers they wear to play their chosen sports, to training shoes to a “lifestyle shoe” that indicates the type of athlete they are.

“So the footwear business is not going away,” he added. “The footwear business is going to continue to be extremely important to this industry and to Dick’s Sporting Goods and to Foot Locker. We’re going to go through some pain, and every once in a while, an industry has to go through a little bit of pain to reset.”

Behind the scenes, Dick’s is doubling down on technology to deepen its relationship with its 30 million active loyalty members.

The retailer recently relaunched its “Scorecard” loyalty program, introducing a premium paid tier called “Scorecard plus” for $99 per year, which offers enhanced benefits aimed at promoting repeat purchases.

In addition to loyalty upgrades, the retailer is finding success with its youth sports streaming app, Game Changer. The platform, which streams Little League baseball and youth soccer matches, has become a core component of the retailer’s digital ecosystem.

By capturing youth sports engagement, the app provides proprietary data that helps power “Dick’s Media Network,” the company’s expanding digital advertising division.