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DICK's Sporting Broadens Store Base

Zacks Equity Research

Full-line sporting goods retailer DICK’s Sporting Goods Inc. (DKS) remains focused on driving growth through the expansion of its store base and incorporation of technological advancements to better serve its clients. In line with its strategic initiatives, the company recently declared the opening of one store each in the states of New York and Delaware.

In New York, the new DICK’s Sporting store will be located at Towne Center in Batavia and will mark the company’s 37th outlet in the state. In Delaware, DICK’s Sporting’s new store will be at Dover Mall in Dover city and mark the 3rd outlet in the state.

The celebrations to mark the opening of the store in New York will commence on Nov 1 and extend over the weekend while at Delaware the celebrations will begin on Nov 8 and continue through Nov 10. The store offerings will include over 40 suitable in-store services provided by DICK’s certified PROS in Golf, Bike, Hunting, Fishing, Team Sports and more. As of Oct 25, DICK’s Sporting was operating over 540 stores in 45 states.

In order to attract customer traffic into its new stores throughout the celebration period, DICK’s Sporting has announced a range of lucrative giveaways. The company will distribute Mystery Gift Cards in the range of $5–$500, give out free Tech T-Shirts manufactured by Under Armour Inc. (UA) and free Scratch & Win cards to the first 100 adults in line.

Apart from the announcement of these two stores, the company last week announced the opening of one new store each in the states of New York, North Carolina, Florida, Wyoming, Missouri and Texas and 2 new stores in Kentucky, plus a relocated store in Ohio.

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 efforts such as the remodeling of stores, launch of shop-in-shop facilities and recruitment of additional sales personnel have boosted top-line growth.

Furthermore, the company is aggressively enhancing its e-Commerce capabilities to increase its sales as well as market share in online retailing.

At its annual Analyst Day meet held last month, DICK’s Sporting announced its plans to increase the retail store count to 800 by the end of fiscal 2017 from 518 stores at the end of fiscal 2012. Further, the company will remodel its existing stores from time to time in order to keep them up-to-date and productive.

Additionally, the company will stay focused on maintaining strong relations with its vendors, introducing fashionable products and concentrating on high growth categories such as Women and Youth.

Moreover, DICK’s Sporting intends to increase its e-Commerce sales to nearly $1.1 billion by the end of fiscal 2017, from $292 million at the end of fiscal 2012. For this, the company will directly control its e-Commerce platform beginning with Golf Galaxy and Field & Stream in 2014, and DICK’s Sporting from fiscal 2017-end.

Apart from expanding its store base, DICK’s Sporting is concentrating on customer needs in order to boost sales. Further, to make customers’ shopping experience a convenient one, the company has introduced a new mobile application for iPhones and Android Smartphones that enables customers to locate DICK’s Sporting stores in any particular area and buy goods directly, using the application.

We believe that the company’s strategic measures of consolidating its store base and the use of technology to provide better services will enhance its relationship with present customers, attract new customers and effectively promote products.

Other Stocks to Consider

DICK’s Sporting currently carries a Zacks Rank #3 (Hold). However, other stocks in the retail sector that are worth a look include Five Below, Inc. (FIVE) and Marinemax Inc. (HZO). Both of these carry a Zacks Rank #2 (Buy).

Read the Full Research Report on DKS
Read the Full Research Report on FIVE
Read the Full Research Report on UA
Read the Full Research Report on HZO

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