Shares of Dick’s Sporting Goods shares sank more than 10% on a decline in same-store-sales in Q4 2018 and disappointing guidance for 2019.
Dick’s is losing two major categories in 2019: hunting and Reebok.
Removing hunting items from 125 stores
Last year, Dick’s removed hunting items from 10 stores where it underperformed. After the removal, those stores generated positive comp sales in Q4. “Following this success,” Dick’s CEO Ed Stack said on the Q4 earnings call, “we will remove Hunt from approximately 125 additional Dick’s stores in 2019 where the category underperforms.”
Dick’s defines the hunting category as rifles and ammunition, plus “accessories associated with firearms, hunting apparel, anything associated with hunting,” Dick’s president Lauren Hobart clarified later on the call. “It would not include kayaks and other outdoor activities like that.”
On Tuesday’s call, Dick’s signaled that the Field & Stream brand may soon go away. “We’re not sure exactly what we’re going to do with it,” said Stack. “We’re not opening any new Field & Stream stores. And right now, on a formal basis they’re cash flow positive and they’re not a drain on the company.”
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Removing Reebok from all stores
Dick’s also shared plans for its private labels that spell bad news for Adidas and Under Armour.
Stack said Dick’s private apparel brands, such as CALIA by Carrie Underwood, will “continue to be an integral part” of its strategy, and “play an important role in our space allocation and assortment strategies.” It will expand the footprint of CALIA in 80 stores, and launch a new private brand that will replace Reebok in time for the back-to-school season.
“We think that we’ll do more business there than we did with Reebok,” said Stack.
That ends a licensing agreement Dick’s had with Reebok, and it sent shares of Adidas Group, which owns the Reebok brand, tumbling.
Dick’s didn’t have great news to share about Under Armour sales, either. Dick’s CFO Lee Belitsky said that Under Armour “continues to be difficult” for Dick’s and, “We’ve been able to replace the loss Under Armour apparel business with other brands in the stores at this point.”
Full, original story: yahoo.com