iStock.com/Joe Hendrickson
Shares of Dick’s Sporting Goods fell 5.8% Tuesday after the sporting goods chain guided profits below Wall Street analysts for the current year. On a call with analysts, CEO Lauren Hobart said the soft guidance solely reflected the overall uncertain geopolitical and macroeconomic environment, insisting the company is not seeing a weak consumer or dialing down its ambitious growth projections.
“We definitely are feeling great about our consumer,” said Hobart on the call. “We are just reflecting an appropriate level of caution, given so much uncertainty out in the marketplace.”
In the year ahead, Dick’s is expecting EPS to be between $13.80 and $14.40, short of Wall Street estimates of $14.86. Sales are projected between $13.6 billion and $13.9 billion, which at the high end is in line with estimates of $13.9 billion. Same-store sales are expected to grow between 1% and 3%, compared with estimates of 2.5% growth. The guidance doesn’t reflect any changes in tariffs.
The below-target guidance comes as Dick’s delivered what may go down as the strongest fourth quarter in U.S. retail with comps ahead 6.4% on top of gains of 2.9% in 2023 and a 5.3% in 2022.
For the year, same-store sales jumped 5.2% on top of a 2.6% increase the prior year. The EBIT margin for the year reached double-digits, above 11%, with EPS at $14.05, up from $12.18 a year ago.
Dick’s is known for giving conservative guidance, with 2024’s results well ahead of guidance given at the start of last year that called for same-store sales in the range of 1% to 2% and EPS in the range of $12.85 to $13.25.
On the call, Hobart was bullish on Dick’s momentum, noting that the company’s “fantastic Q4” came as sports in general are having a “huge moment in the United States,” including broad “excitement around women’s sports.” She added that major events should further elevate interest in sports over the next several years, including the 2026 men’s World Cup being hosted by three North American countries (U.S., Canada, and Mexico), the 2028 LA Olympics, and the 2031 Rugby World Cup that’s being held in the U.S. for the first time.
“The convergence of sport and culture has never been stronger and Dick’s sits squarely at the center of this exciting intersection,” said Hobart. “We’re a nation obsessed with sport, and no one is better positioned to harness this opportunity than Dick’s Sporting Goods.”
Dick’s also cited three focus areas expected to drive growth in the years ahead, including major expansion planned for both its larger House of Sport concept and its Field House concept that reimagines Dick’s traditional 50,000-square-foot flagship size with experiential elements gleaned from House of Sport. In each new store’s first year, House of Sport is delivering an expected $35 million in omnichannel sales with an EBITDA margin of around 20%, while Field House is generating $14 million in sales in year one at an approximately 20% EBITDA margin.
Hobart said House of Sport is also seeing customers spend more time in the store with a “significantly higher” spend than typical Dick’s customers. It’s also “opening doors to new brand partnerships and strengthening existing relationships as this concept showcases our brand partners in a way no one else can.”
Footwear remains a key driver of growth, bolstered by the addition of full-service footwear decks — now in about 90% of Dick’s locations — which enhance product availability and selection. Footwear penetration has grown to 28% of sales, up 900 basis points over the last 10 years. Hobart said, “Even with this success, we have a great opportunity to gain share.”
Finally, the third growth opportunity is accelerating e-commerce growth with “aggressive investments in technology and marketing” planned with a focus on the Dick’s app. Related online growth opportunities were cited around GameChanger, Dick’s scorekeeping and team management app for youth and high school teams, as well as its new retail media network first launched in 2022.
Analysts asked several questions about the potential impact of tariffs on the call, with reports arriving that their impact has raised the possibility of a recession. In an interview with CNBC, Executive Chairman Ed Stack said Dick’s sourcing exposure to China, Mexico, and Canada is minimal, but he noted that any erosion in consumer confidence could impact spending.
“I do think it’s just a bit of an uncertain world out there right now,” said Stack. “What’s going to happen from a tariff standpoint? You know, if tariffs are put in place and prices rise the way that they might, what’s going to happen with the consumer?”
Hobart still implied on the call that Dick’s expects its consumer to hold up better than other retail channels should a pullback in spending arrive. She said, “Our consumer has proven that in times of stress and uncertainty, that they are leaning into outdoors, being outside, going for a run or a walk, going to watch team sports. It’s become much more of a necessity than a discretionary item, and it makes sense because it is a way for people to find calm in an otherwise uncertain time frame.”