Dick’s Sporting Goods, like Target and Walmart previously, had strong pandemic-era results, increasing total sales by 19.8% in the fourth quarter, while e-commerce was up 57% and sales in the same store were up 19.3% because the omnichannel execution was outstanding.
Throughout the year, e-commerce sales doubled and store pickups and curbs increased 250%, said Ed Stack, the company’s executive chairman and chief merchandising officer.
“During the fourth quarter, our stores enabled 90% of our total revenue and fulfilled over 70% of our online sales either via in-store shipping, in-store pick-up or on the roadside,” Stack told analysts on a profit call. “These same day services are fully enabled by our stores, which are the center of our industry leading omnichannel experience. They serve our athletes (customers) in-store as well as over 800 relay points for digital fulfillment. “
These omnichannel tactics will continue to be a focus of Dick’s Sporting Goods, said CEO Lauren Hobart.
“Roadside collection, fewer promotions and fixed cost leverage have greatly improved the profitability of our online channel in 2020,” Hobart said. “We expect the roadside to remain an important part of our omnichannel offering in 2021 as our athletes turn to the service for speed and convenience.”
That feat came at a price as the cost of Dick sporting goods sold, including fulfillment and delivery, increased 11% to $ 2.1 billion in the fourth quarter, despite being lower as a percentage of sales compared to 2019, 66.3% versus 71.9%%.
“As e-commerce is a bigger part of the business, there is some pressure from additional shipping costs to get products to customers,” said CFO Lee Belitsky. “We did a really good job in the fourth quarter and mitigated this with more BOPIS and roadside pick-up as well as higher (average prices). We believe we will be able to hold onto part of it, but it will mean a constant, very detailed management effort on our expenses there to try to keep this down. “
On the merchandise side, Hobart said Dick’s has seen particularly strong growth in clothing and footwear and plans to invest in them by repurposing some stores.
“As part of this, we will be moving over 100 additional stores to premium full-service footwear and transferring that experience to over 60% of the Dick’s Sporting Goods chain,” she said. “We believe these improvements, along with strong consumer trends and better allocation of the most sought-after models, will continue to drive positive results in our sportswear and footwear business.”
Hobart also said Dick’s Sporting Goods would expect a “nice tailwind” in team sports gear in 2021 as the youth leagues return to the field after the bans completely wiped out most of the 2020 seasons.
Net sales for the fourth quarter were $ 3.13 billion, up from $ 2.6 billion in 2019, while net sales for the full year were $ 9.58 billion. Net income for the fourth quarter was $ 219.6 million, compared with $ 69.8 million in 2019.