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Three Major Takeaways From This Week’s Earnings — From Sporting Goods Strength to Brick-and-Mortar Recovery

It was another busy week for retail earnings, with some companies posting record-high results.

As the retail industry enters a general stage of recovery from the pandemic, major players this week posted sales increases and earnings beats across the board. Sporting goods chains Dick’s Sporting Goods Inc. and Hibbett Inc. reported strong results for the quarter, highlighting strength in the sporting goods sector. Department store Nordstrom Inc. and footwear retailer Shoe Carnival Inc. also revealed positive results that pointed to a general return to pre-pandemic trends.

Off-pricer Burlington Stores Inc. posted soaring numbers this quarter, with total sales increasing 34% compared with Q2 of 2019.

Overall, earnings this week pointed to recovery in the retail industry as well as continued momentum for the sporting goods and athletic categories.

Here are three trends to take away from this week’s financial reports.

Sporting Goods remains strong

Dick’s Sporting Goods reported its strongest quarter in the company’s history on Wednesday, with record sales and earnings. The retailer benefited from a surge in outdoor and athletic categories, driven by a consumer interest in hiking and the outdoors.

Dick’s also saw success with its House of Sport experiential retail concept. The store concept, which includes a 17,000-square-foot turf field, a running track, a rock-climbing wall, a batting cage, golf hitting bays and a putting green, is meant to attract consumers to physical stores.

Coming off the heels of Dick’s strong performance, Hibbett also reported strong earnings on Friday. Net sales decreased 5.1% to $419.3 million year-over-year, but grew 66.1% compared with 2019.

Athletic footwear is strong, but other categories are catching up

Athletic footwear usually makes up about 70% of Shoe Carnival’s sales for August. This year, that percentage was slightly less.

Shoe Carnival senior EVP and chief merchandising officer Carl Scibetta said in a Wednesday call with investors that this small dip in athletic does not reflect a slowing down in the category. Rather, it was a sign of acceleration in other footwear categories.

“We increased our inventory position for dress shoes to be in line with pre-COVID levels in anticipation of the surge of events like weddings and graduation parties, which typically occur in the second quarter,” Scibetta said. “This was another great example of Shoe Carnival being on trend early. Our stores were stocked with the styles and quantities of dress shoes that customers wanted, giving us an edge over our competition and driving a significant increase in new customers in the quarter.”

Nordstrom is also seeing a return to some pre-pandemic style trends. President and chief brand officer Pete Nordstrom said in a call with investors that the company is seeing a return to “legacy business around the core categories” within shoes and apparel.

“The categories we saw with the biggest improvement towards the end of the quarter were things related to cadence of events because people are out there more often than they were before,” he said.

Brick-and-mortar is coming back

The pandemic may have accelerated e-commerce for most retailers, but recent trends point to a recovery in brick-and-mortar traffic and sales. Shoe Carnival, Nordstrom and Dick’s all highlighted Q2 success in their brick-and-mortar stores.

According to foot traffic data from Placer.ai, Burlington’s foot traffic was up 25.4% in July compared with July 2019. Nordstrom is getting closer to pre-pandemic traffic levels, with visits down 4.6% at Nordstrom and 3.2% at Nordstrom Rack compared with 2019. At Dick’s Sporting Goods, foot traffic data showed that customer visits to its debut House of Sport store in Victor, N.Y., “significantly outpaced” visits to other Dick’s Sporting Goods doors in the area, with 93.5% more visits.

Meanwhile, Shoe Carnival’s brick-and-mortar comparable store sales were up 25.8% in Q2 compared with Q2 2020. “We are incredibly excited by how fast customers have returned to our brick-and-mortar stores,” said Scibetta. “They’ve returned even faster.”

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