Dick’s Sees Sales Slide, But Profits Hold In Q3

Sales were down in Q3 at Dick’s Sporting goods, as the retailer announced a net sales decline of 4.5 percent year over year to $1.86 billion. The company’s eCommerce sales were on the incline, up 16 percent in total and reaching about 12 percent of total net sales – an increase of 10 percent over a year ago at this time.

But the eCommerce increases were not enough to offset falling same-store sales traffic, which declined 3.9 percent during the quarter. Net income picked up, however, reaching $37.8 million in Q3, up from $36.9 million a year ago.

Sales declines were largely attributed to the decision of Dick’s Sporting Goods to pull back its offering in hunting goods and electronics. CEO Ed Stack noted that comparable sales were in line with what the retailer had expected during the quarter.

Analysts, however, took a somewhat dimmer view of the results. GlobalData Retail Managing Director Neil Saunders noted that the company’s efforts to thin its assortment have been a boost to margins, but a drag on revenue overall – and that not all of the retailer’s troubles this quarter are due to choice it has made.

“In our view, paring back on the range is sensible and is needed to both streamline the business and make shopping at Dick’s easier,” he said in an email to Retail Dive. “We do not believe that all of the declines are due to conscious decisions: We think Dick’s is being blown off course by a number of unfavorable dynamics.”

Included among those unfavorable dynamics is a change in consumer preference when it comes to where they purchase athletic gear. Serious athletes tend to flock toward higher-end and more sports-focused brands, like Nike and Peloton. For less seriously athletic consumers, middle-market mass merchants like Target and Kohl’s are eating up an increasing amount of market share.

Saunders also noted that the brand has yet to find way to make up for the revenue lost by discontinuing gun and ammunition sales, a move that alienated some gun owners from the brand. And, he noted, the shopping experience still needs work.

“Despite attempts to thin down the offer, the amount of choice is still overwhelming, especially in apparel,” he said. “Little attempt has been made to create an aspirational and engaging shopping experience — something that is vital if customers are to be enticed into stores.”