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DICK'S Sporting Ramps up Store Expansion

Zacks Equity Research

Full-line sporting goods retailer DICK'S Sporting Goods Inc. (DKS) is gearing up to achieve growth via the expansion of its store base and incorporation of various schemes to serve its clients better. In line with this strategic initiative, the company recently unveiled its newly relocated store in Pittsburgh, PA.

Spanning 50,000 square feet, the new DICK’S Sporting store will be housed at the McCandless Crossing in Pittsburgh. Prior to this, the retail outlet was located at 1092 Northway Mall, which will bring down the curtains on Apr 8 to make way for the bigger shopping center, opening on Apr 13.

This new outlet will feature various enhancements such as a Women's Studio Apparel Department, a Baseball Shop, a Soccer Shop, a Running Center with a local event agenda, a Lacrosse Shop, a newly expanded Youth Footwear section, and expanded Brand Shops along with efficient checkout facility.

In order to attract customer traffic to its new store during the celebration period, DICK’S Sporting announced a range of lucrative giveaways. The company will distribute free Tech T-Shirts manufactured by Under Armour Inc. (UA) to the first 100 people in queue on the opening day. Also, the customers who reach early will get an opportunity to open the DICK'S Sporting Goods Gift Locker.

Additionally, to entice visitors, the company has invited local celebrities to make special appearances at the new store on the inauguration.

DICK'S Sporting has been taking store augmentation initiatives for a long time. In fiscal 2013, the company introduced 44 new stores and closed 3. To date, the company has opened 3 new outlets in the current fiscal, including 2 in Florida and 1 in Louisiana.

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 talented 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 late September, DICK’S Sporting announced its plans to increase retail store count to 800 by the end of fiscal 2017 from 518 at the end of fiscal 2012. Further, the company will continue remodeling its existing stores in order to keep them up-to-date and productive.

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.

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 while attracting newer ones and effectively promote its products.

Other Stocks to Consider

DICK’S Sporting currently carries a Zacks Rank #3 (Hold). Other stocks in the retail sector that are worth a look include Barnes & Noble, Inc. (BKS), carrying a Zacks Rank #1 (Strong Buy) and Foot Locker Inc. (FL), holding a Zacks Rank #2 (Buy).

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