Dick's Remains a Premier Brick-and-Mortar Retailer
But industry pressures continue to dog the firm.
Dick's (DKS) is the largest full-line sporting goods retailer with a national store base and a high-quality, growing e-commerce business. It controls approximately 12% of the sporting goods industry, up approximately 150 basis points over the past few years, aided by the 22 million square feet of storefronts that have closed following competitor bankruptcies (including the 2016 closure of Sports Authority, which previously had around 3% of the market).
We believe Dick’s has fared better than rivals thanks to its execution and company-specific initiatives, including a technology platform for youth sports leagues, private brands (10% of sales) including Calia and Reebok, and strong partnerships with vendors, which prefer to work with national retailers like Dick’s. Despite these efforts, we believe the company hasn’t amassed a sustainable edge and may be plagued by faltering structural dynamics down the road.
John Brick, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.