Dick’s Sporting Goods reported record sales for 2022.
Leadership at the retailer said they plan to expand the Dick’s House of Sports experiential store chain and continue the company’s commitment to the outdoor industry.
For Q4 2022, revenues rose 7.3% to $3.6 billion, a quarterly record for the company.
Comparable store sales climbed 5.3% in Q4 on top of the 6.6% increase in the prior-year period.
Net sales for the year were $12.4 billion, an increase of 0.6% over 2021.
That’s also up 41.3% versus 2019, prior to the COVID-19 pandemic.
Net income fell 32% to $236 million for the fourth quarter.
Earnings declined 27% on an adjusted basis compared to the prior-year quarter, to $258 million, or $3.64 per share.
About 80% of the company’s Q4 growth was driven by sales in footwear, athletic apparel, team sports and golf.
“Following two consecutive record years, we are very pleased with our 2022 performance, which was the largest sales year in our company’s history,” Ed Stack, executive chairman, said in a statement.
Committed to Outdoor Category
During today’s earnings call, CEO Lauren Hobart mentioned the company’s new outdoor-focused banner Public Lands, which serves enthusiasts and outdoor athletes, as well as the Dick’s acquisition of outdoor retailer Moosejaw.
“These are affirmations of our commitment to growth in the multi-billion-dollar outdoor category,” she said.
The company declined to comment further on the Moosejaw acquisition as the transaction has not yet closed. It’s scheduled to do so this month.
Inventory Adjustments
Navdeep Gupta, chief financial officer for Dick’s, attributed some of the company’s success to “compelling item-level deals” during the holiday season.
“Additionally, we continued to address target inventory overages due to the late-arriving spring products (in 2022),” he added. “As a result of these actions, our inventory is in great shape as we start 2023.”
Hobart reiterated that the company had significant inventory challenges in Q1 and Q2 of 2022.
“That’s the whole reason why the inventory came in late as the year went on,” she said.
However, that inventory issue has been resolved, according to Hobart.
“Our (new) spring product is in,” she said. “We have a fantastic assortment.”
The company has been using 2019 as its comparable year, but Hobart said it will be using 2022 as the baseline from now on.
“It is our hope that this year there’s finally some normalized seasonal cadence,” she added.
“With the inventory challenges last year and the impact that had on consumer shopping behavior, as well as some of the issues people were having with inflation, all of that hopefully will normalize this year.”
Ramping Up House of Sport
The company is converting its existing 17 Field & Stream stores into House of Sport locations, which are multi-sport experiential stores.
Dick’s, which is exiting the Field & Stream business, closed 12 of the Field & Stream stores during Q4 2022 and plans to convert the remaining stores by 2024.
For 2023, the Dick’s capital allocation plan includes capital expenditure of $550 million to $600 million.
“We are excited to return to growing our square footage,” Gupta said. “House of Sport will be the primary driver of this market.”
Dick’s did not announce new store plans for Public Lands, which currently operates seven stores. Four of those locations opened last fall.
In 2023, the company will open nine new House of Sport locations, comprised of one relocation and eight existing Dick’s and Field & Stream combination conversions.
Dick’s will also begin construction on more than 10 new House of Sport locations that will open throughout 2024.
“We’ve been reinventing sports for 75 years,” Hobart said.
“Over this time, we’ve grown significantly to become the largest omnichannel sports retailer in the U.S., a $140 billion industry, and the number one premium golf and team sports destination in the world.”
Bart Schaneman can be reached at [email protected].
