Dick’s Sporting Goods plans an “elevated level of investment” in its stores this year, CFO Lee Belitsky said on the retailer’s earnings call.
The retailer’s total same-store sales rose 5.3% in its fourth quarter 2019, supported by increases in both average ticket and transactions, as well as growth across each of Dick’s three primary categories of hardlines, apparel and footwear. E-commerce sales increased 15% in the quarter, accounting for approximately 25% of total net sales, up from 23% during the fourth quarter of 2018.
“In 2019, we developed strong momentum in our stores and online,” president Lauren Hobart said. “Our efforts demonstrate that when we focus on serving our athletes, we can drive a meaningful impact on sales. We remain focused on driving positive results through an improved service and selling culture, while continuing to improve our omni-channel experience through faster and more reliable delivery as well as improved functionality and performance of our website.”
Dick’s said it plans cap ex to be $235-$295 million and that the high end of the range “contemplates improvements in existing stores, including stronger merchandise presentations within footwear, soccer and CALIA, as well as hunt space optimization over 400 stores, as well as technology and store design investments to enhance the fitting and lesson experience in our Golf Galaxy stores.”
This also includes ongoing investments in technology as well as opening up nine new Dick’s stores, six new Golf Galaxy stores and 17 relocations.
Dick’s stores contribute tremendously to the retailer’s e-commerce growth through buy-online-pickup-in-store and ship-from-store, president Lauren Hobart said in the call, noting BOPIS saw strong growth in the fourth quarter. For the year, BOPIS grew more than twice the rate of the 15% sales growth Dick’s saw in its overall e-commerce business.
“Looking ahead, we will continue to improve our omnichannel experience through faster and more reliable delivery, as well as improved functionality and performance of our website,” said Hobart. “In 2020, this will include providing shorter and more accurate estimated delivery dates earlier in the athlete shopping funnel, expanding BOPIS to more items, and delivering more localized website experiences, as well as a faster and more convenient checkout. As part of our multifaceted women’s initiative, we will deliver an expanded assortment across several key sports, including basketball, dance, soccer, and softball. In addition, our marketing in early 2020 will amplify DICK’S as the go-to destination for her.”
The low-end of the company’s outlook includes some caution related to supply chain disruption potentially impacting its results beginning in the second quarter. The company currently projects earnings per diluted share to be approximately $3.60 to 4.00. Consolidated same store sales are currently expected to be approximately flat to an increase of 2%, compared to a 3.7% increase in 2019.
“We are excited to continue to focus on and enhance our 2019 strategies, which include optimizing our inventory and floor space, delivering differentiated merchandising and driving athlete engagement across all channels,” Ed Stack, chairman and CEO, said in a press release. “Our outlook balances this enthusiasm with a degree of caution over the coronavirus and how it may impact our business.”