QUOTE AND NEWS
Market Intelligence Center  Oct 9  Comment 
MarketIntelligenceCenter.com’s patented option-trade picking algorithm found two trade ideas on Dick's Sporting Goods Inc. (DKS) today after it traded between between $43.38 and $44.81 before closing at $44.77 on Wednesday. For more conservative...
TheStreet.com  Oct 7  Comment 
NEW YORK (TheStreet) -- Shares of Dicks Sporting Goods Inca are higher by 1.21% to $44.18 after the company was upgraded to "buy" from "neutral" at Goldman Sachs this morning. The firm raised its price target to $54 from $51, citing...
Market Intelligence Center  Oct 7  Comment 
MarketIntelligenceCenter.com’s patented option-trade picking algorithm found two trade ideas on Dick's Sporting Goods Inc. (DKS) today after it traded between between $43.63 and $44.68 before closing at $43.65 on Monday. For more conservative...
SeekingAlpha  Oct 2  Comment 
By Daniel Jones: Despite falling around 6% in pre-market trading on Sep. 23, shares of Dick's Sporting Goods (NYSE:DKS) closed out the day down less than 2%. This decline in share price came after William Blair downgraded the stock from...
Benzinga  Sep 24  Comment 
On CNBC's Stock Pops & Drops, Guy Adami talked about a 1.66 percent increase in price for Peabody Energy Corporation (NYSE: BTU). The stock bounced after the company boosted its third quarter guidance. Adami thinks that the whole space is under...
TheStreet.com  Sep 23  Comment 
NEW YORK (TheStreet) -- Shares of Dick's Sporting Goodsa are falling 5.93% to $41.85 in pre-market trades as the sports and fitness retail company's rating was cut to "market perform" from "outperform" at William Blair this morning. Analysts at...
Market Intelligence Center  Sep 23  Comment 
MarketIntelligenceCenter.com's patented trade-picking algorithms have identified an attractive covered-call trade on Dick's Sporting Goods Inc. (DKS). Look at the Dec. '14 $44.00 covered call for a net debit in the $42.14 area. This trade has a...
Benzinga  Sep 17  Comment 
Karen Finerman spoke on CNBC's Stock Pops & Drops about a 44.37 percent decline in VirnetX Holding Corporation (NYSE: VHC). The stock traded lower after an appeals court threw out the patent award that it won against Apple Inc. (NASDAQ: AAPL)....
Wall Street Journal  Sep 16  Comment 
Dick's Sporting Goods said Tuesday that two of its top executives will soon retire, as the company contends with inconsistent results heading into the holiday-shopping period.
Forbes  Sep 14  Comment 
Johnny Manziel's jersey sales at Dick's Sporting Goods are No. 1 heading into Week 2 of the NFL season.




 
TOP CONTRIBUTORS

Dick's Sporting Goods (NYSE: DKS) is the a specialty sporting goods retail chain. Dick's operates stores in the majority of states in the US which sell a wide range of sporting equipment and apparel, in addition to Golf Galaxy stores and Chick's Sporting Goods stores.[1] [2] The company ranks as the second largest sporting goods retailer in the U.S by sales.[3] By increasing its presence in temperate areas such as Florida, Georgia, and Texas, the company hopes to temper the declining sales during the winter since most of its products are directed at outdoor, warm-weather sports.

While the majority of Dick's products are brand names manufacturers like Nike, adidas, and Under Armour (UA), one important trend affecting Dick's is the growth of its own private label product lines, which the company aims to account for about 15% of total sales.[4] In addition, as one of the largest specialty retailers in the U.S., Dick's is particularly prone to downturns in the economy that can constrain consumer spending on non-essential goods like sporting goods equipment.

As a sporting goods retailer, Dick's generates revenue through sales of sporting equipment and apparel in its physical Dick's Sporting Goods retail stores and DicksSportingGoods.com (Dick's e-commerce site fully outsourced to GSI Commerce (GSIC)). The company also owns the Golf Galaxy retail chain which sells golf equipment and apparel and provides club repair and other services.

In most Dick's stores, approximately 80% of floor space is used for sales and 20% is used for backroom storage of merchandise, receiving area, and office space. [5]

Trends and Forces

Private-Label Helping Margins

In order to boost margins, Dick's carries its own private-label brands (including Ativa) alongside its brand name merchandise from companies like Nike (NKE), Under Armour (UA) and brands like The North Face from V.F. (VFC). Its private-label products sell at margins approximately 5-6 percentage points higher than typical branded goods. As Dick's moves private-label products into Golf Galaxy stores and increases the presence of these brands in Dick's stores it should help the company continue to increase their gross profits.

Seasonality

Seasonality affects Dick's sporting goods in two distinct manners:

  • As a retailer, Dick's typically experiences greater sales during the fourth quarter holiday season. Thus, a stronger or weaker than normal holiday season can considerably help or hurt Dick's.
  • Because many of Dick's products are used in warm weather, outdoor activities (baseball, running, golf, etc.) sales can slump during the winter seasons. Dick's counters this in part by carrying winter apparel and sporting equipment (such as skiing and snowboarding equipment). This type of seasonality could be minimized if Dick's can successfully enter markets in Florida, Texas and Southern California where warm temperatures remain year-round.dfdf

Macroeconomic Downturns: Squeezing Consumer's Wallets

As a retailer of non-necessary goods Dick's is one of the first companies to lose sales when poor economic conditions dampen consumer spending. Since Dick's product lines are not diversified with non-athletic offerings (e.g., groceries or basic clothing) it is more exposed to economic downturns than other retailers such as Wal-Mart Stores (WMT) and Target (TGT).[6]


Competition

Dick's competes in fragmented industry, with the top six sporting goods retailers holding only 19% of the estimated $52 billion market. The Sports Authority (bought by a private equity firm in 2006) follows in second place.

Other companies that Dick's compete with in the sporting goods retail market include the following firms:

  • Academy Sports & Outdoors: Academy is a private company operating just under 100 stores throughout the South and Southwest regions of the U.S. Academy's product offerings focus on apparel and equipment for outdoor activities such as camping, hunting, fishing and boating.
  • Recreational Equipment, Inc. (REI): "REI" is a privately-owned co-op that operates about 90 stores heavily concentrated in the Western half of the US. REI sells mostly apparel and equipment used for hiking, climbing, kayaking and other similar outdoor activities.
  • Big 5 Sporting Goods (BGFV): This small-store neighborhood style retailer leads the sporting goods market in Western states such as Washington, California and Arizona. If (or when) Dick's begins to make moves into the Pacific states, Big 5 Sporting Goods (BGFV) will be their main competition as Big 5 operates over 300 stores throughout the Western region.
  • Hibbett Sports (HIBB): Hibbet boasts over 600 small-format stores based primarily in the Southeast region of the US. These stores are traditionally located in indoor and strip malls and sell a variety of sporting equipment and apparel.

Dick's also faces considerable competition from footwear retailers like Foot Locker [7] and Finish Line (FINL) [8]. Dick's is also facing increasing competition from big box discount retailers like Wal-Mart, Target and Amazon.com who sell a selection of sporting equipment and apparel in their stores as well.




References

  1. Dick's Annual Report 2008, page 1
  2. Dick's Annual Report 2008, page 24
  3. Internet Retail "Dick`s Sporting Goods selects Global Sports to operate its web business"
  4. Kevin Stecyk, Seeking Alpha, "Dick's Steers Clear of Housing Weakness"
  5. DKS 10-K 2008, Item 1 "Business," page 7
  6. Dicks Sporting Goods, Inc. Q2 2009 Earnings Call Transcript
  7. Google Finance FL
  8. Google Finance FINL Financials
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