Dick’s Sporting Goods, Another Retailer That Going To Bit The Dust – Part II
It’s been over six months since I last talked about Dick’s Sporting Goods.
The CEO, Stack went on to say during the conference call that the challenges with Under Armour should subside in 2019, as Dick’s finds new inventory — including fresh items from Under Armour — to fill its shelves.
I think Dick’s future doesn’t look great. Stack is talking about filling their shelves with fresh items. Maybe I should show Stack the picture below and introduce Stack to Amazon because store/mall traffic is declining, Retail Apocalypse is real and only those brick and mortar stores that have a serious online presence have a chance at survival.
Shares of Dick’s Sporting Goods fell double digits on Tuesday after the company reported its fiscal fourth-quarter earnings. During the quarter, the company beat analysts’ EPS and revenue expectations, but the forecast for 2019 was weak. of $1.06 and their revenue estimate of $2.48 billion. Although DKS outperformed analysts’ revenue and EPS expectations, the company’s stock fell due to its weak outlook.
Dick’s CEO Edward C. Stack said the retailer is dropping a licensing agreement with Reebok and launching its new brand in time for the fall back-to-school season. He also said Dick’s does not plan to return floor space in its stores that it took away from Baltimore-based Under Armour last year.
One thing I was paying attention to was their omnichannel (online) initiative. Last year the company launched a new e-commerce platform. Dick’s is also working to deliver e-commerce orders within two business days to the majority of our shoppers and is in the process of building a fulfillment center in New York and California. The company also plans to spend money at Facebook and Google to beef up its digital marketing and boost traffic on its website. These effects will require capital, which will hurt margins, but they have no choice if they want any chance of surviving.
In the end, I think their efforts will be too late. Thus, I remain bearish and think the targets will be hit in the years to come.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.