Speaking at Goldman Sachs’ 32nd Annual Global Retailing Conference, Ed Stack, Dick’s Sporting Goods’ executive chairman, said he was most excited about the abundance of “newness” coming from the chain’s vendor partners, which he expects will continue to drive sales growth in the back half.
Stack’s comments come as Dick’s last week raised its guidance for the year as comps rose 5 percent in the second quarter on top of a 4.5 percent same-store gain in the year-ago quarter.
“What we’re excited about out there is anything that’s new,” said Stack. “Anything that’s new from a design standpoint and technology standpoint is doing extremely well. Things that have been around for a while are a little bit slower, but anything new, we’re really excited about. Our team has done a great job of having those new products in the store, and they helped drive the 5 percent comp.”
Stack added, ‘Some brands have come out with some really terrific products that have caught the consumers’ interest.”
As examples, he noted Nike’s three-pronged running construct consisting of the Pegasus, Vomero and Structure “has been just fantastic.”
In hard lines, some launches from diamond sports brands “have done really well from a launch standpoint,” including some bats as high as $500 each. Said Stack, “These are not inexpensive products, and they’re just flying off the shelves. These kids want this particular product.”
Stack also believes that sports retailing is benefiting overall because sports in general have become a bigger part of culture. He added, “We’re at this intersection between sport and culture, which is going to last for a while here.”
He also said interest in sports will be further elevated in the years ahead by “some terrific” events taking place in the U.S., including the 2026 World Cup and the 2028 Summer Olympics.
“The way that the World Cup has been structured, I think, is just genius,” said Stack. “It’s all of North America. The matches will be played in cities all across the country. So, from the first match in LA to the final in New York, and many markets in between, including Dallas, Atlanta, and Boston. All through these weeks of the World Cup, these markets are going to be all jazzed and focused on what’s going on with the World Cup … It’s going to be great for our business. I think it will be great for soccer in this country in the long term. So there’s a lot to be excited about.”
Lauren Hobart, president and CEO, said the 5 percent comp in the second quarter marked the sixth consecutive quarter that Dick’s has seen comps rise by 4 percent. She also credited “newness” as driving gains across hard and soft lines categories.
“We’re seeing growth across every income demographic, which is terrific. We’re not seeing trade down,” said Hobart. “People are absolutely voting that these categories that we serve are important, but the differentiated products that we have are really appealing to them. And then we are building a better mousetrap in terms of both our in-store and online experiences. Our House of Sport concepts are doing incredibly well. Our Field House concepts are performing incredibly well … So, I think we’re able to continue gaining significant market share. The consumer is doing great, and the momentum in the business is quite strong.”
Asked about market share potential, Hobart said that although Dick’s is the largest sporting goods retailer in the U.S. and “soon to be on the globe,” referencing its pending Foot Locker merger, its existing market share is only 9 percent in the U.S. Said Hobart, “If you look at it, there’s significant market share to continue to get. And we’ve been focused this year on specifically driving our footwear business pre-Foot Locker, driving our e-commerce business and repositioning our entire portfolio, but there are pockets of market share everywhere to go after.”
The elevated in-store experience is most evident at its experiential House of Sports locations. Said Navdeep Gupta, Dick’s CFO, “One of the things that we are clearly focused on within the company is to make sure that we don’t have a tired old chain. We want to make sure that we are investing retail square footage in driving the innovation and kind of retail theater and the experience with our athletes.”
Dick’s will open 16 House of Sports locations this year, including its first in the New York metropolitan area, in Jersey City, which is set to open next week. Another 15 to 16 House of Sport locations will open in 2026 in line with a long-term goal to reach between 75 to 100 doors in 2027.
Unit growth for the standard Dick’s Sporting Goods locations will be “relatively flattish,” said Gupta. However, all new store openings in the conventional format, as well as relocations or conversions, will embrace the new Field House concept, which incorporates some learnings from House of Sport and is outperforming traditional locations. Among the differences, the footwear area is about 50 percent larger than a traditional Dick’s location, including a House of Cleats in-store shop. Some also include House of Sports’ interactive elements, such as adding a climbing wall.
Gupta said of Field House, “The stores are doing fantastic as well. We have taken some of the core learnings from the House of Sport platform and cascaded and brought them to life in our 50K format.”
Vertical Brands Advantage
Stack said Dick’s vertical brands, or private label brands, “have been great” with growth continuing to outpace the company. Margin rates on vertical brands continue to range between 700 to 900 points higher than those of national brands.
“Verst, Calia, DSG, Walter Hagen have continued to grow, and they’ve now got a real following out there in the marketplace,” said Stack. “So, it’s not just that I come up and pick something up that’s inexpensive from a vertical brand standpoint. Some of these vertical brands are premium and priced at what the national brands would be, and they’ve now got a real following.”
Another notable success has been its in-house Maxfli golf balls, which are used by pro golfers such as Lexi Thompson, Ben Griffin and Fred Funk. Dick’s acquired the Maxfli brand in 2008 from TaylorMade-Adidas Golf. Stack said, “The Maxfli play is a brand that has a great history. It’s won 13 majors, over 100 tournaments.”
Despite expected continued growth, Stack does not expect Dick’s private-label penetration to be “super high” because footwear remains a key category for the retailer and “we’re not going to be in the vertical brand footwear business.”
He also noted that in categories such as baseball bats, consumers are looking for models used by the pros and college players. Stack said of the vertical opportunity, “It’s got its niche, and it’s very helpful and will continue to grow. It will help our margins.”
Margin Drivers
Dick’s management was also asked about the drivers of strong gross margin improvement over the last several years amid some investor concerns they may drop back to pre-pandemic levels. Dick’s gross margins were 34.96 percent last year, up from 29.2 percent in the pre-pandemic year ended January 31, 2020.
Gupta cited “three big drivers” of the margin improvement, starting with Dick’s success in gaining differentiated products with investments in full-service footwear decks and other steps. Gupta said, “Access to the differentiated product allows you to get the full-price selling, gets you access to some of the product that do not go on any kind of promotion, and you are a little bit immune to the promotional intensity that may be within the marketplace.
A second factor driving margins is the growth with vertical brands and their higher margins. Gupta noted that the margin rate on vertical brands has been helped by the exit of Field & Stream, which was Dick’s largest vertical brand product and carried lower margins than the apparel private labels that have recently launched.
Finally, Gupta cited Dick’s “mix” changes, including its move to exit the hunt category, which carried “significantly lower margins” versus other categories. He also noted that Dick’s has invested in “clearance management,” both in finetuning pricing and promotion strategies and opening the Going, Going, Gone! clearance concept that now has 50 locations.
Going forward, margins are expected to be supported by continued growth of the Game Changer platform. Gupta said, “The Game Changer platform is probably the best platform that is out there in the youth sports ecosystem. And that platform did $100 million dollars of sales last year and is very profitable. We expect that business to grow to $150 million.”
He also noted that Dick’s is just starting to expand Dick’s Media Network, its retail media business that’s expected to support margins. Gupta said, “There’s nobody that has an asset that we have from the athlete database and access to a customer who walks into our store who on average has more than one brand in their basket. To be able to really understand the basket and the interactivity of that customer with us, we are uniquely positioned to be able to leverage that data to grow Dick’s Media Network.”
Foot Locker Opportunity
Stack spoke briefly on the pending Foot Locker acquisition, which he said will close this coming Monday, September 15.
“We’re really excited about it,” said Stack. “We see the huge opportunity here, not only from what we can do from a global standpoint, but what we can do here in the United States. For so long, it’s been a terrific brand.”
He added, “We think that they’ve got a great culture in their stores. The striper culture in the stores is one of the main reasons why we bought them. These young men and women work in the stores. They love Foot Locker. They love sneakers. They understand sneakers. They love to talk about sneakers. And we think there’s a big opportunity, and we’re very excited about that.”
Stack said Dick’s plans to focus on the next few quarters to “clean things up, get the real assessment of what’s going on,” while promising “more information” regarding Dick’s plans to revive top-line growth at Foot Locker on Dick’s fourth quarter analyst call in early 2026. However, he expressed confidence that Dick’s would be able to turn the business around. Stack said, “They struggled a little bit over the last couple of years, but we see what needs to be done and basically, it’s ‘retail 101,’ to have the right product at the right place at the right time.”
Image courtesy Dick’s House of Sport
