Dick’s Sporting Goods Doubles Ecommerce Sales in 2020

Dick's Sporting Goods exterior feature

Dick’s Sporting Goods, like Target and Walmart before it, is seeing strong results in the pandemic era, increasing overall sales 19.8% in the fourth quarter, while ecommerce was up 57% and same-store sales increased 19.3% as its omnichannel execution excelled.

For the full year, ecommerce sales doubled and store pickup and curbside combined increased by 250%, said Ed Stack, the company’s executive chairman and chief merchandising officer.

“During Q4, our stores enabled 90% of our total sales and fulfilled over 70% of our online sales either through ship from store, in-store pick-up or curbside,” Stack told analysts on an earnings call. “These same-day services are fully enabled by our stores, which are the hub of our industry-leading omnichannel experience, both serving our in-store athletes (customers) and providing over 800 forward points of distribution for digital fulfillment.”

These omnichannel tactics will continue to be a core focus for Dick’s Sporting Goods going forward, said CEO Lauren Hobart.

“Curbside pickup, along with fewer promotions and leverage of fixed costs, drove significant improvements in the profitability of our online channel in 2020,” Hobart said. “In 2021, we expect curbside to remain a meaningful piece of our omnichannel offering as our athletes turn to the service for speed and convenience.”

This performance did come at a price, as Dick’s Sporting Goods cost of goods sold, which includes fulfillment and delivery, increased 11% in Q4 to $2.1 billion, although it was lower as a percentage of sales vs. 2019, 66.3% vs. 71.9%.

“As ecommerce is a larger part of the business, there is some pressure from additional delivery expenses to get products to customers,” said CFO Lee Belitsky. “We did a really good job in the fourth quarter, mitigating that through more BOPIS and curbside pickup and higher (average prices). We think we’ll be able to hold on to some of that, but it will mean a constant, very detailed management effort on our expenses there to try to keep that down.”

On the merchandise side, Hobart said Dick’s has seen particularly strong growth in apparel and footwear and plans to invest in that through repurposing of some stores.

“As part of this, we’ll convert over 100 additional stores to premium full-service footwear, taking this experience to over 60% of the Dick’s Sporting Goods chain,” she said. “We believe that these enhancements, along with strong consumer trends and improving allocations of the most in-demand styles will drive continued positive results in our athletic apparel and footwear business.”

Hobart also said Dick’s Sporting Goods was expecting to see “a nice tailwind” in team sports gear during 2021, as youth leagues get back on the field after the lockdowns completely wiped out most seasons in 2020.

Net sales for the fourth quarter were $3.13 billion, up from $2.6 billion in 2019, while full-year net sales were $9.58 billion. Fourth quarter net income was $219.6 million, up from $69.8 million in 2019.