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DICK'S Sporting Goods, Inc.
today detailed its long-term plan and key strategies to deliver sales and
operating profit growth and drive shareholder value over the next five years.
During its Analyst Day meeting, the Company presented a sales target of $10
billion by the end of fiscal 2017, representing a 5-year compounded annual
growth rate (CAGR) of approximately 11% from fiscal 2012 sales of $5.8
billion. The Company is focused on driving profitable growth and believes it
can expand its operating margin by approximately 150 bps to 10.5% in fiscal
2017, from 9.0% in fiscal 2012, through both the expansion of gross margin and
leverage of SG&A expenses.
The key drivers of the Company's long-term growth are expected to be DICK'S
Sporting Goods stores, eCommerce growth through the Company's omni-channel
platform and the Field & Stream brand.
DICK'S Sporting Goods Stores
The Company anticipates growing its store base to over 800 DICK'S Sporting
Goods stores by the end of fiscal 2017, an increase of approximately 300
stores from the 518 stores at the end of fiscal 2012. DICK'S Sporting Goods
has developed a range of prototypes depending on market characteristics,
including its traditional 50,000 sq. ft. single-level stores, 35,000 sq. ft.
smaller market stores and 80,000 sq. ft. two-level stores. The Company's
merchandising strategy will continue to emphasize its strong vendor
relationships, exclusive product and high growth categories such as Youth and
Women's. Additionally, the Company will continue to strategically remodel its
existing stores to keep them fresh and productive, focusing on key initiatives
such as vendor shops and shared service footwear decks.
Omni-channel
The Company also discussed its plan to grow eCommerce sales to approximately
$1.1 billion by the end of fiscal 2017, from $292 million in fiscal 2012. The
Company is planning to internally control its eCommerce platform, beginning
with Golf Galaxy and Field & Stream in 2014 and DICK's Sporting Goods by the
end of fiscal 2017. Key strategies for driving omni-channel growth include
assortment and content expansion, leveraging diverse marketing channels to
generate traffic, driving multi-channel loyalty, capitalizing on the trends in
mobile and tablet usage, driving conversion and optimizing the supply chain.
Field & Stream
The Company announced plans to grow its Field & Stream outdoor specialty
concept to approximately 55 stores and $750 million in sales by the end of
fiscal 2017, capitalizing on its heritage in this category and a core outdoor
market estimated at over $30 billion. These stores will bring a
differentiated experience to the market, focusing on respected national
brands, shop-in-shops and specialty store level services.
Capital Allocation Strategy
DICK'S Sporting Goods also reaffirmed its capital allocation strategy to
provide returns to shareholders through investing in the business,
repurchasing shares and paying dividends. To drive the growth of the business
the Company expects to invest approximately $1.8 billion in capital
expenditures over the next five years, primarily in new stores, store remodels
and eCommerce. In addition to its quarterly dividend, the Company's existing
up to $1 billion 5-year share repurchase authorization provides the capacity
to both offset dilution and also acquire shares opportunistically.
"We are excited about the profitable long-term growth opportunities across our
business in our DICK'S Sporting Goods stores, on-line and through our Field &
Stream concept," said Edward W. Stack, Chairman and CEO.
Mr. Stack continued, "To support our long-term goals, we intend to make
meaningful investments in our business in the near-term. We are timing these
investments to stay ahead of our needs and to produce sustainable, long-term
advantages. Even with approximately $1.8 billion of capital expenditures to
support our $10 billion sales target, we expect to expand our operating
margins."
Mr. Stack concluded, "In addition to focusing on our customers and our
communities, we are laser focused on driving shareholder value over the next
five years by investing in the long-term growth of the business, repurchasing
shares and paying quarterly dividends."
Webcast Replay Information
An archived replay of the webcast of the event will be available for
approximately 30 days on the DICK'S Sporting Goods Investor Relations website
at www.DicksSportingGoods.com/investors.
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