Sporting goods retailing has emerged as one of the bright spots during the pandemic, and in the process, a competitive advantage against Amazon may be developing.
Evidence for the sector’s success has come from two of its biggest brick-and-mortar players, Dick’s Sporting Goods and Hibbett Sports. Dick’s reported stellar earnings and an eCommerce spike earlier in the week; Hibbett’s reported its earnings on Friday.
By the numbers, the 1,100 store Hibbett’s chain reported net sales for its quarter ending Aug 1 with an increase of 74.9 percent to $441.6 million, compared with $252.4 million for the same period in 2019. Brick and mortar comparable sales increased 65.2 percent; eCommerce sales grew 212.2 percent and almost doubled its percentage of sales. The digital shift took 15.7 percent of total net sales compared to 8.6 percent in 2019. The company attributed the increases to pent-up consumer demand and federal stimulus money. But it also reaped the benefits of an emphasis on digital sales.
“Accelerating consumer adoption of eCommerce, which we believe is likely a permanent change, will continue to benefit our omnichannel business,” the company said in a statement.
Dick’s Sporting Goods, which has a higher industry profile but 300 fewer stores than Hibbetts, clocked a 200 percent increase in online sales in the quarter.
“More importantly, the company fulfilled 75 percent of online sales from its stores,” says Seeking Alpha. “The company has finally figured out how to effectively compete with Amazon by using retail stores as distribution centers, providing a huge advantage over the online retailer offering next day delivery.”
That sentiment was echoed by company president Lauren Hobart on the company’s earnings call. “So in terms of the percentage of eCommerce business that was fulfilled out of the stores, I do think it's meaningful to point out that 75% is a large increase. In the past, we've indicated it with the majority — the majority, over half,” Hobart said on the call. “But this is a meaningful increase that's being fulfilled from the stores. And yes, you're right that a lot of that business is going out the front door as well as what used to be just the back door in terms of curbside and ship from store. Curbside remains really strong — even as we open the stores, it's the business that we believe strongly is here to stay and we believe it will be an important player throughout the back half of the year and into holiday, and into the future.”
Many fitness-related success stories during the pandemic have focused on workout equipment. But during its earnings call, Dick’s CEO Ed Stack detailed other outdoor activity sales that contributed to its success including camping, fishing, hiking, and boating.
“I think the fitness business is going to be very good all over,” Stack said. “And people know that in order to fight the pandemic, or whatever comes next, people need to be healthy. And that doesn't mean that we're going to have a lot of marathon runners, but people are going to get out and they're going to walk, they're going to buy a treadmill, they're going to lift some weights, even if they're light weights, kettle bells, this whole fitness trend ... We don't see that changing even when COVID-19 is in our rearview mirror for quite a while.”