Dick’s Sporting Goods Is Making Its Stores Bigger as Other Chains Shrink Their Fleets
Amid a broad trend to make stores smaller and more localized, Dick’s Sporting Goods is seeing results with the opposite strategy.
The sporting goods chain on Thursday announced its decision to open 16 new next-generation “50,000” Dick’s stores in 2024 after opening 11 of these large-format locations in 2023. These stores, which build on the chain’s classic 50,000 square foot store model, will consist of four new locations and 12 relocations and remodels.
Dick’s focus on larger stores bucks a broader industry trend in which chains are looking to shrink their stores. In general, shoe brands appear to be opting for newer, smaller concept stores that aim to blend a showcase of top-tier product with unique experiences catered to specific regions.
Last month, Macy’s said it would close about 150 “underproductive locations” through 2026 and would invest into 30 new small format Macy’s stores over the next two years as well as into its small format Bloomie’s concept. In 2022, DSW outlined a goal to create a “store of the future,” which consolidated the chain’s 20,000 to 25,000 square foot-stores into smaller and more efficient 15,000 square-foot locations. Nordstrom and Target have also downsized on store size in recent years as they look to enter more urban markets.
The 50,000 store model builds on Dick’s successful House of Sport concept, which launched in 2021. Dick’s currently operates 12 House of Sport stores, each of which is approximately 100,000 square feet and provides customers with an assortment of products along with in-store experiences including a climbing wall, multiple golf bays with TrackMan simulators, and multi-sport cages. Dick’s plans to open 15 new House of Sport locations throughout 2025.
Dick’s said it expects to achieve $14 million in omnichannel sales from its new 50,000 stores in their first year, as well as a 20 percent comparable EBITDA margin. Hobart said the company’s new store formats and its omnichannel experiences will drive sales and help the company gain market share in 2024.
In the fourth quarter reported on Thursday, Dick’s reported sales and earnings figures that crushed expectations. Revenues were $3.88 billion, up 7.8 percent from the same quarter last year and ahead of the $3.8 billion expected by analysts surveyed by Yahoo Finance. Non-GAAP earnings per diluted share were $3.85, up 31 percent from last year and ahead of the $3.35 analysts were looking for. Comparable store sales were up 2.8 percent, with growth across footwear as well as apparel.
“Inspired by House of Sport, this [50,000] store has a similar elevated assortment and service model, premium experiences and enhanced visual expressions, and the format is delivering great results,” Dick’s president and chief executive officer Lauren Hobart said in a call with analysts. “This one-two punch of House of Sport and our next-generation 50,000 is the future of our Dick’s stores and will serve as the hub for our athletes’ omnichannel experience.”