Dick’s Sporting Goods on Tuesday issued its outlook for fiscal 2018 early, noting that its earnings per share could slide 20 percent in the coming year.
Stephanie Ritenbaugh of the Pittsburgh Post-Gazette had the news:
The dim outlook pushed the Findlay-based company’s stock down 2.77 percent to close at $25.59.
“Because of the confidence we have in our business long term, we plan to make significant investments in our business in Q4 and into next year,” Edward Stack, chairman and CEO, told analysts on a third-quarter earnings call.
“This will have a short-term negative impact on our earnings. However, we expect these investments will pay meaningful dividends in the future,” he said.
Investments include e-commerce, in-store technology and in Dick’s private label brands, as well as Dick’s Team Sports HQ, a platform that provides tools like free online registration, team websites and a mobile app that teams can use to schedule.
Sarah Halzack of Bloomberg Gadfly writes that Dick’s blew its shot at taking advantage of other retailers:
Under Armour is expanding its portfolio of stores, which included 280 locations across the globe at the end of the latest quarter. Nike plans to lure more customers to shop directly with the brand by dangling exclusive products to those who join its membership program and by providing high-touch service through its new Experts on Demand offering.
This increased competition is especially concerning for Dick’s when you consider how it has largely squandered its opportunity to fill the void created when Sports Authority went out of business in 2016. While Dick’s has added to its revenue haul by taking over some of those stores, its comparable sales performance suggest it’s not doing a great job of luring one-time Sports Authority customers to try the Dick’s that perhaps was already located down the street.
If Dick’s sales faltered when its space got less crowded, then there’s little reason to be optimistic it can muster new strength as the crowd grows.
Stacey Federoff of the Pittsburgh Business Times reported that Dick’s also hired a new chief technology officer:
Paul Gaffney will lead the company’s technology, including infrastructure and ecommerce platforms, effective Nov. 20, according to a news release.
Gaffney most recently served as the senior vice president of information technology with The Home Depot, where he led software engineering, user-centered design and applications.
“I’m excited to join the Dick’s Sporting Goods team at this important time of focus and investment in technology as a key enabler to better communicate with and serve our customers,” he said.
Gaffney has also worked as president and chief executive officer with AAA Northern California. He holds a bachelor’s degree in Computer Science from Harvard University and is a Henry Crown Fellow at the Aspen Institute.
