So much for those pesky retail headwinds.
A string of upside earnings surprises from sporting goods retailers last week show the liquidation of more than 500 stores by bankrupt Sports Authority and Sport Chalet had much less impact than feared — at least for now.
On August 15, Dick’s Sporting Goods Inc. reported that as Sports Authority stores sold through their inventory, customers turned to nearby Dick’s locations to fulfill their needs, particularly for camping, water sports and paddle sports gear. As a result, traffic to its flagship Dick’s chain rose 1.7 percent while average ticket size climbed 1.3 percent. That enabled the Dick’s banner to grow same-store sales 3 percent and grow consolidated same-store sales (including Dick’s and Golf Galaxy) 2.8 percent, compared with the 1-4 percent decline the company had forecast in May.
Hibbett Sports Inc., which operates more than 1,000 stores at strip centers in mid-sized markets across 33 states, lifted the low end of its earnings forecast for fiscal 2017 by 3 cents per share on better than expected results that were driven by its growing assortment of footwear.
The solid sport footwear gains during that second quarter for many retailers affirm the strong point-of-sale figures that SportsOneSource’s SSI Data reported through the quarter’s end in June.
Over in the hook-and-bullet and outdoor sector, same-store sales at Sportsman’s Warehouse Holdings Inc. grew nearly 3 times more than expected thanks to a surge in firearms and camping sales and despite continued weakness in apparel. The company announced plans to open its first stores in North Carolina and West Virginia in 2017.
“Our camping continues to show strong demand,” Sportsman’s Warehouse Holding Co. Inc. President and CEO John Schaefer said during the company’s earnings call. “We actually had a couple of categories where we ran out of product a little early, which I mentioned, and we’ve had very good discussions with our vendors to make sure that we have adequate supply for the hunting season in the fourth quarter.”
The report comes as Americans swarm national parks, which are on pace to set an attendance record for the third year in a row. Visits to national parks was up 3.5 percent in the first seven months of 2016 from a year ago, according to data from the National Park Service, which is celebrating its centennial this year.
The week ended with news that Foot Locker Inc.’s same-store sales grew 4.7 percent in the quarter ended July 30 compared with a year earlier. The company reported same-store sales at its flagship Foot Locker stores in the United States were up in the mid single digits despite the closing of its flagship Manhattan store. Dollar and unit sales of footwear increased, as did average sales price.
“Our core consumers want to be in our stores,” quipped Foot Locker’s CEO Dick Johnson. “The malls are far from dead, regardless of what’s going on with the anchors.”
Whether the upside surprises continue, noted Dick’s Sporting Goods Chairman and CEO Ed Stack, hinges on how much the liquidation sales by Sports Authority and Sport Chalet cannibalized back-to-school sales of footwear and apparel.
Stack said there is still uncertainty about how much business Sports Authority liquidation sales pulled forward, particularly in some of the important back-to-school categories such as footwear and apparel, which make up a big chunk of Dick’s fiscal third quarter sales.
“We believe we are poised to pick up long-term market share,” said Stack, “but remain a bit conservative until we get more distance from the liquidation event, which removed approximately $400 million of inventory from the market in a very short period of time.”
