DICK'S Sporting Further Expands with New Stores
DICK'S Sporting Goods Inc. (DKS), in keeping with its aggressive store expansion strategy, is set to unveil two new stores in Mississippi and California. The new Mississippi store will be located at University Mall in Columbus, while the California one will be situated at Sherwood Mall in Stockton.
The opening of these stores will mark DICK'S Sporting’s 6th outlet in Mississippi and 35th outlet in California, and increase the company’s overall store count in the country to 581. The celebrations to mark the opening of these stores will commence from Sep 19 and extend over the weekend.
The store offerings will include over 40 suitable in-store services provided by DICK'S certified PROS in sports and outlook specialties including Golf, Bike and Fishing. Moreover, the new locations will be highlighted by Under Armour, Inc. (UA) and Nike, Inc. (NKE) shops. It will also include other athletic clothing and footwear.
In order to attract customers to its new stores, during the celebration period, DICK’S Sporting announced a range of lucrative giveaways.
The company will distribute free Reebok Play Dry T-Shirts to the first 100 people in queue on the opening day. Also, DICK’S Sporting announced that the early birds will get an opportunity to open the DICK'S Sporting Goods Gift Locker on all three days. Moreover, on Saturday and Sunday, it plans to give free Mystery Gift Cards worth $5–$500 to the first 100 adults in line.
Additionally, to lure customers, the company has invited Eric Moulds, former NFL wide receiver, to make special appearance at the new Mississippi store on Sunday. While at the California location, the company has invited Vida Blue, former Oakland Athletics player, on Saturday.
We believe that the full-line sporting goods and apparel retailer will benefit from its in-store action and online growth strategies. The company’s in-store remodeling efforts, launch of shop-in-shop facilities and recruitment of more competent sales personnel have continually boosted its top line. Furthermore, the company is aggressively enhancing its e-Commerce capabilities to increase sales as well as market share in online retailing.
Moreover, DICK’S Sporting’s strategic measures of strengthening its store base and using technology to provide better services are likely to improve its relationship with present customers and at the same time attract new ones. These initiatives are expected to effectively promote the company’s products.
DICK’S Sporting currently carries a Zacks Rank #3 (Hold). The company’s second-quarter fiscal 2014 earnings showed signs of recovery with successful implementation of its restructuring initiatives, after starting fiscal 2014 on a soft note.
The company’s adjusted earnings of 67 cents per share for the second quarter of fiscal 2014 met the upper-end of its guidance range of 62 to 67 cents and at the same time surpassed the Zacks Consensus Estimate of 65 cent, showing remarkable improvement from its first-quarter results. However, due to lower merchandise margin along with higher shipping and operating expenses, quarterly adjusted earnings witnessed a year-over-year decline of 5.6%.
Following the second-quarter results, the company remained cautious about its fiscal 2014 performance. For fiscal 2014, management anticipates earnings per share to be between $2.70 and $2.85 with comps projected to grow in the range of 1%–3%. Currently, the Zacks Consensus Estimate stands at $2.77 per share.
A better-ranked stock in the same industry is Jumei International Holding Ltd. (JMEI), which carries a Zacks Rank #2 (Buy).
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