Dick’s Sporting Goods just raised its outlook after posting strong results in Q3, bucking weaker trends across retail this quarter.
Sales across all income demographic levels grew in Q3, CEO Lauren Hobart said on Tuesday call with analysts. Across Q3, more shoppers purchased items more frequently and spent more each trip.
“It’s clear we are providing something for everyone,” Hobart said. “We are not seeing people trade down.”
Overall, net sales in Q3 were $3 billion, up 7.7% from last year. Comparable store sales were up 6.5%. Non-GAAP earnings per diluted share were $2.60 and earnings per diluted share were $2.45. Given the results, Dick’s raised its full year 2022 guidance and expects full year 2022 non-GAAP earnings per diluted share of between $11.50 and $12.10. Comparable store sales are expected to fall between 3% and 1.5%. Dick’s did not break out e-commerce sales.
Williams Trading analyst Sam Poser said in a Tuesday note that “improved merchandise assortments” and “evolving omni-channel efforts” were responsible for the lack of consumer trade down at Dick’s.
“Dick’s continues to take more control of its own future, rather than allowing macro events to control its destiny,” Poser wrote.
Like other retailers, Dick’s took measures to clear through excess apparel inventory in Q3, which it managed to do through different markdown concepts online and in stores. Hobart said the company continues to be “aggressive” in cleaning up its inventory with a goal to start 2023 on a clean slate. Hobart also said Dick’s is taking a flexible approach when it comes to laying out product across stores, which will be determined in part by inventory availability and demand.
Private label brands performed well in Q3, as well, as more consumers turn to these value-driven brands to ease the impact of inflation this holiday season. Hobart specifically called out the DSG, Calia and VRST brands as being able to fill “white space” in the performance and lifestyle categories. In 2021, vertical brands passed $1.7 billion in sales.
When it comes to the upcoming holiday season, Hobart said the company will be “surgical” in implementing markdowns across select items as opposed to opting for a “sledgehammer approach” of offering sales across the entire store.
After a strong quarter bolstered by back-to-school sales and persisting demand, Dick’s expects demand to continue into next year, driven by its assortment in high demand categories such as footwear and team sports.
“[There is] nothing unique about this quarter that shouldn’t persist,” Hobart said.