Dick's Sporting Gears Up Store Expansion - Analyst Blog

The store expansion plans of the full-line sporting goods retailer, DICK's Sporting Goods Inc. DKS, is gaining pace as evident from the company's announcement of 3 new stores located in Florida, Alabama and Oklahoma. The celebrations to mark the opening of these stores will commence on Apr 25 and extend over the weekend.

In Florida, the new DICK's Sporting store will be located at Westshore Plaza in Tampa, marking the opening of the company's 27th store in the state. The newest store in Alabama will come up at the Colonial Promenade Alabaster, a lifestyle center located at 200 S. Colonial Drive. This store will mark the company's 11th outlet in the state of Alabama. The company's third store announcement in Oklahoma will be positioned at the Lawton Town Center in Lawton and will mark the company's 8th store in the state.

Including these new outlets, DICK's Sporting's store count has now increased to 566. As of Feb 1, 2014, DICK's Sporting operated more than 550 stores in 46 states, 79 Golf Galaxy stores in 29 states and e-Commerce websites and catalog operations.

Offerings at these new outlets will include over 40 suitable in-store services provided by DICK's certified PROS in sports and outlook specialties including Golf, Bike, Fishing and Team Sports.

In order to attract customer traffic to its new stores 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 and free Mystery Gift Card of value between $5 and $500 for the first 100 people queuing on Saturday and Sunday. 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 5 new outlets in the current fiscal, including 2 in Florida and 1 each in Wisconsin, California and Louisiana. Additionally, the company opened a relocated store in Pennsylvania.

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 in late Sep 2013, DICK's Sporting announced its plans to increase its 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 worth a look in the related industry include Barnes & Noble Inc. BKS, carrying a Zacks Rank #1 (Strong Buy) and Tractor Supply Company TSCO holding a Zacks Rank #2 (Buy).