Facing a clearer field with the demise of two rivals, Dick’s Sporting Goods Inc. reported today a 7.9% year-over-year increase in total sales and a 25.7% jump in web sales.
CEO Edward W. Stack told analysts today he was pleased with the results, given that bankrupt competitors Sports Authority and Sports Chalet were flooding the market with discounted goods as they liquidated inventory. “Looking ahead, we are focused on capturing the displaced market share and remain confident in our ability to strengthen our leadership position.” Sports Authority Inc. declared bankruptcy in March and is still being liquidated; retail chain Sports Chalet and its SportsChalet.com e-commerce site also closed down this year.
Dick’s stands to make further gains online after acquiring Sports Authority’s web domain and other intellectual property assets for $15 million in a June auction. Those assets include SportsAuthority.com and 627 other web domains; 114 million customer files; about 25 million e-mail addresses of consumers who had opted in to receive email; and information on Sports Authority’s Royalty Rewards loyalty program with more than 28.5 million members, according to an advertisement for the Sports Authority intellectual property auction posted online.
Asked by an analyst on a conference call whether Dick’s had begun using that Sports Authority customer information, Stack replied, “We are just getting this information, starting to sort through it. We hope that it will be helpful to us in the fourth quarter, a little bit in the third quarter but more so in the fourth quarter,” according to a transcript from SeekingAlpha.
Shoppers who try to visit SportsAuthority.com are redirected to DicksSportingGoods.com. Dick’s is No. 62 in the Internet Retailer 2016 Top 500 Guide, while Sports Authority is No. 287. Vestis Retail Group, which owned Eastern Mountain Sports and Sports Chalet was No. 508 in the 2015 edition of the Top 500. Eastern Mountain Sports is being reorganized, while Sports Chalet has ceased operating.
According to data from web analytics company SimilarWeb Ltd., traffic to SportsAuthority.com has fallen steadily since May. The site recorded 2.7 million visitors in July, down 62% from 7.1 million visitors in May. Sports Authority’s Twitter feed remains up and has more than 58,500 followers, though it hasn’t tweeted since June 23.
Dick’s and Sports Authority combined for an Internet Retailer-estimated $834.7 million in online sales last year, according to Internet Retailer’s Top500Guide.com. If Dick’s captures a big part of the web sales from SportsAuthority.com it could challenge retail chain Cabela’s Inc. (No. 61) as the largest online sporting goods retailer in North America. Cabela’s sold an Internet Retailer-estimated $774.8 million online in 2015.
Dick’s executives reiterated their previously announced plans to begin operating the retailer’s primary e-commerce site, Dicks.com, internally by January 2017. They said that should reduce costs by about 25 basis points, or .25%. The retailer had outsourced operation of its e-commerce sites for years to GSI Commerce and later to eBay Enterprise after eBay Inc. acquired GSI. Besides selling online at Dicks.com, Dick’s Sporting Goods also operates the GolfGalaxy.com and FieldandStreamShop.com e-commerce sites.
For the second quarter ended July 31, Dick’s reported:
- E-commerce represented 8.5% of sales in the quarter versus 7.3% a year earlier.
- Total sales of $1.968 billion, up 7.9% from $1.823 billion a year earlier. That suggests online sales increased 25.7% to $167.3 million from $133.1 million in the year-ago quarter.
- Same-store sales increased 2.8%.
- Net income of $91.42 million, an increase of 0.6% from $90.84 million.
For the fiscal year to date, Dick’s has reported:
- Based on the company’s report of online sales as a percentage of total sales, web sales are up 20.2% to $320.1 million from $266.2 million during the first half of the previous fiscal year.
- Total sales are up 7.1% to $3.628 billion from $3.388 billion.
- Net income of $148.3 million, a decline of 3.8% from $154.2 million.
As of July 30, Dick’s operated 649 Dick’s Sporting Goods stores in 47 states, 72 Golf Galaxy stores in 29 states and 21 Field & Stream stores in 10 states.
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