On Tuesday, Dick’s Sporting Goods announced it is planning to eliminate certain brands that have become less popular with its shoppers, as the sporting goods retailer continues pushing to capitalize on the problems of its major rivals.
The country’s largest chain of sporting goods stores is planning to refocus its lineup of products by eliminating as many as 20% of its overall vendors.
Chief Executive Officer Edward Stack announced the changes were coming as a way to deliver a more refined offering to customers and to enable the chain to remain ahead of today’s consumer trends.
The decision by the company to eliminate a number of its vendors came following a review of the business, which was initiated by Dick’s because of the headwinds retail is suffering that helped take down its biggest rival Sports Authority.
The fiscal fourth quarter for the company, which ended during late January, saw an improvement in demand for its golf equipment and its sales of championship gear of the Chicago Cubs, along with broader growth linked to the bankruptcy by Sports Authority.
This helped Dick’s to reach a better than expected holiday shopping period. However, the first quarter outlook for the company fell short of expectations on Wall Street.
Sales for existing Dick’s as well as Golf Galaxy locations were up 5% during the fiscal fourth quarter. In all, revenue was $2.48 billion that represented a gain of 11% year over year.
The retailer earned a profit of $90.2 million, which was down from the same period one year again of $129 million. Eliminating one-off charges, Dick’s per share profit was $1.32.
E-Commerce sales at Dick’s were nearly $1 billion during 2016, and the retailer has been investing large sums in digital properties like GameChanger, a scoring app for youth teams.
Dick’s is expecting to earn 50 cents to 55 cents per share during its first quarter, while Wall Street projected per share earnings of 61 cents. Same-store sales have a pace to increase by 3% to 4%. During the full year, Dick’s has forecast adjusted earnings per share of between $3.65 and $3.75.
During its conference call Tuesday, CEO Stack said that none of the 10 largest vendors of Dick’s would be eliminated, but did not say the venders that were being cut.
He declined to specify the categories that are being cut, although he did say that Dick’s was reevaluating products throughout the store.