Key Dick's Sporting Goods Metrics
2022 continues to be a foundational year for Dick’s Sporting Goods, as structural shifts in consumer demand for sporting goods products and the company’s own initiatives behind branded products and experiential retail have set the stage for continued visitor engagement in the years to come. The key message for CRE executives? Dick’s core store formats should continue to drive greater visits as new experiential aspects are added to stores, while alternative store formats offer ways to potentially reach an expanded audience.
- Structural changes in consumer behavior driving demand. On its most recent update call, management noted that 2Q22 sales trends are running 38% higher than 2Q19. Part of the company’s post-pandemic sales growth is a byproduct of a larger store base (Dick’s store count has increased 17% across all banners, growing to 850 units today from 727 in 2Q19), and inflation has contributed to average ticket size. Nevertheless, it’s also increased visits per store that have been a key driver of growth. Below, we’ve presented Dick’s visits per location on a quarterly calendar basis over the past five years and see that 2Q22 visits per location are running ahead of pre-pandemic levels (though below 2Q21–transactions fell 8% for the quarter due to mean reversion after a strong 2021, though this was anticipated). Our visit per location data reinforces management’s stance that the shift in consumer behavior toward active/outdoor lifestyles during the pandemic is durable.
- More than just sporting goods category rebound. Placer.ai data suggests that Dick’s success is not just a situation where a rising tide across the sporting goods industry floats all boats. We’ve compared YoY visitation trends for Dick’s and other leading sporting goods retail chains versus the industry average and found that Dick’s has been outpacing the industry for much of the year (and validating management claims about its market share moving to 8% from 7% a year ago). While apparel and footwear retailers have had their share of issues this year in terms of supply chain bottlenecks, excess inventory, and changes in vendor strategies (Foot Locker in particular), we believe Dick’s visitation market share gains can be in part attributed to inventory quality. Dick’s management called out an increase in “more narrowly distributed product that isn't nearly as susceptible to pricing pressures and promotions'' while noting that its branded assortment (85% of sales) as a key competitive advantage.
- Experiential retail and alternative formats offer promise. We’ve highlighted Dick’s alternative retail formats in the past, including House of Sport, Public Lands, and Going Going Gone, but our visitation data indicates that these concepts continue to outperform. Below, we’ve included some year-to-date visitation statistics for Dick’s experiential House of Sport location in Victor, NY and the closest legacy location in Rochester, NY. Not only has the House of Sport Victor location seen almost three times the visitors that the Rochester store has; visit frequency and dwell time are also up at these locations. With visitation trends like this, it’s not surprising that the retailer is also implementing experiential elements like full-service footwear decks, elevated soccer shops, golf simulators, HitTrax technology, and batting cages at its stores, which we expect to be a positive contributor to visits in the future and supporting future unit expansion.