Dicks Sporting Goods: Your Best Sports Bet?

Your Best Sports Bet?

When your whole life has been guided through sports, then there is no doubt that having a reliable and diverse sports store near you is a lifesaver. Dicks Sporting Goods Inc (NYSE: DKS), a full line omnichannel sporting goods retailers, offering a broad assortment of sports equipment, apparel, footwear, and accessories, seeks to be every person’s lifesaver with more than 850 stores in 47 states in the United States. However, even if it is everybody’s lifesaver, does DKS makes a good investment?

What Are The Growth Drivers For Dicks Sporting Goods?

To define the long-term potential of Dicks Sporting Goods, here are two reason why, I believe, DKS is a good investment for your stock portfolio: First, strong omnichannel presence to capitalize on online trends. Dick’s opened two national e-commerce distribution centers in Q3 of 2019 – negative impact to margins in Q1 2020 but has enabled company to respond strongly in the COVID period and will drive their long-term growth. Additionally, DKS Curbside Contactless Pickup and Buy-Online, Pickup-in-Store (BOPIS) initiatives have driven significant sales in 2020, and based on several surveys, people are loving BOPIS during this pandemic.

Second, shift toward accessible health & fitness lifestyles: COVID-19 has drastically accelerated existing trends toward decentralized, accessible fitness regimen options. High-tech home gyms and fitness apps, such as Peloton, Tonal, and TrueCoach have experienced revenue growth of more than double when compared YoY. Given the previous, the Total Addressable Market will most certainly expand as a new class of customers outside of traditional structured athleticism demographics join the fitness/sports world, increasing DKS’ demand for sporting goods.

Will DKS Be Able To Maintain Its Growth Rate In The Future?

To define the sustainability of the enhanced growth potential, Dicks Sporting Goods has three main competitive advantages: First, omnichannel. The e-commerce platform is integrated with store fleet, providing customers with convenience and expertise. Second, shopping experience. Interactive and exciting shopping locations provide value-add service compared to both online-only retailers as well as physical retail competition. Third, exclusive brands. Brand partnerships provide access to exclusive products differentiating athletes’ shopping experience through initiatives. Exclusive private brand products are not available from other retailers.

1 2 3
View single page >> |

Disclosure: Disclosure: I do not currently own Dicks Sporting Goods and all the analysis above shows my own personal view and does not guarantee in any sense a positive return. However, I plan ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.