DICK’S Sporting Goods, Inc. DKS has been benefiting from sturdy consolidated same-store sales and robust e-commerce performance. This led to better-than-expected second-quarter fiscal 2020 results, wherein both top and bottom lines improved year over year.
Comps grew 20.7%, driven by higher transactions and a rise in average ticket of 2.8% and 17.9%, respectively. Solid performance in all core categories, including hardlines, apparel and footwear, contributed to comps growth. Further, the healthy consumer demand for the product categories that drove comps growth in the second quarter has continued in the fiscal third quarter. For the first three weeks of the third quarter, the company has recorded comps growth of 11%.
Moreover, DICK’S Sporting has always been focused on boosting omni-channel capabilities through strengthening of store network and expanding e-commerce presence. Amid the pandemic, the company has been displaying strong online momentum driven by higher online demand and improved omni-channel capabilities, including curbside pickup services and BOPIS. Notably, e-commerce sales surged 194% year over year during the fiscal second quarter.
On the store-front, it launched two types of concept stores, namely OVERTIME by DICK’S Sporting Goods and DICK’S Sporting Goods Warehouse. This move is in sync with its plans to expand outlet and clearance stores in a bid to offer popular athletic brands at discounted prices. Also, all its stores have resumed operations from June-end which is likely to contribute to the top line in the near term.
Other retail companies that have been benefiting from strong online show in the past few months are Hibbett Sports HIBB, Gap GPS and American Eagle AEO. Notably, Hibbett’s online sales advanced 212.2% year over year in the fiscal second quarter on the back of a rise in new customers. Also, Gap’s e-commerce channel recorded 95% growth during the fiscal second quarter. Moreover, American Eagle witnessed consolidated digital sales growth of 74%in second-quarter fiscal 2020 driven by a rise in new customers, solid traffic and higher conversions.
Coming back to DICK’S Sporting, the company continues to reel under elevated costs related to unprecedented COVID-19 impacts, which are likely to persist. In fact, DICK’S Sporting expects to incur $50 million of COVID-19-related costs in each quarter of fiscal 2020.
Nonetheless, we believe that a solid top line, driven by strength in core categories, along with a robust e-commerce business will help the company keep its stellar show on.
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