Dick touts tout ‘incredibly strategic’ relationship with Nike as it posts another banner year

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Diving brief:

  • Dick’s Sporting Goods had its second straight record year in 2021, with net sales last year up 40.5% compared to 2019 and 28.3% from 2020 to $12.3 billion, according to a company press release.
  • Comps grew 26.5% in 2021, including a 42% increase in brick and mortar and a 9% decline in e-commerce. E-commerce normalizes: Pandemic trends prompted the retailer to double its online sales in the previous year, with penetration reaching 30% in 2020, but e-commerce as a percentage of sales had fallen to 21% in 2021.
  • Thanks to strong sales and margins, Dick’s net profit also soared, rising 325% from 2019 and 157% from a year ago to $1.54 billion. Based on two years of strong performance, however, expectations for 2022 are lower, with comps expected to fall 4% flat and earnings per share about $2-4 lower than 2021.

Overview of the dive:

After five years of transformation work, Dick’s recorded two consecutive record years and in the fourth quarter, its largest sales quarter in company history.

“Virtually nothing about our business is the same as it was five years ago,” executive chairman Ed Stack said in a call with analysts, noting that the retailer continues to take market share and make develop its business.

Its launch strategy, however, is very similar to last year’s. The company will continue to invest in the in-store experience, including technology to improve in-store fulfillment and pickup capabilities, full-service shoe stations, expanded football stores, golf simulators and batting cages in its stores. The leaders were “very satisfied” with the store concepts that Dick’s has tested – House of Sport, Public Lands and off-price concept Going, Going, Gone all debuted last year – and they will also continue to influence what Dick’s does in its main stores.

After fellow athletics retailer Foot Locker announced it would be receive fewer products from Nike Going forward, Dick CEO Lauren Hobart has touted her relationship with Nike, saying she’s been “encouraged” by the results of linking the loyalty programs of the two companies whole.

“Our relationship with Nike is at an all-time high,” Hobart said, calling it an “incredibly strategic” partnership.

However, she also pointed to strong relationships with brands like Under Armor and Adidas, and noted that Nike accounted for 17% of her sales last year. By comparison, Nike accounted for 70% of Foot Locker purchases in 2021.

“We have incredibly strategic discussions with every key brand partner that we have in key categories and it’s sportswear, sports shoes [and] team sports,” Hobart said.

At the same time, the retailer continues to expand private label to fill gaps in its assortment and plans to expand its private label into new categories in the future. In 2021, Dick’s private labels accounted for more than $1.7 billion in sales and represented the company’s top brands in categories including golf, team sports and fitness.

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