SportChek’s same-store sales climbed 3.7 percent in the second quarter, marking its fourth consecutive quarter of growth and boosted by the Toronto Raptors being crowned NBA champions.
In the year-ago second quarter, same-store sales were down 0.3 percent. Net sales at SportChek in the latest quarter increased 2.6 percent to Canadian $452.5 million.
SportChek represents the former FGL Sports Ltd.’s businesses and includes SportChek, Sports Experts, Atmosphere, National Sports, Sports Rousseau, and Hockey Experts.
SportChek benefited from significant growth in e-commerce sales. The gains were also helped by an increase in inventories, most significantly athletic footwear and licensed clothing, to support anticipated demand, and came despite cold weather at the start of summer selling.
Among categories, accessories, hydration, cycling and clothing accessories were the top performing categories. The Raptors’ success helped boost licensed apparel sales in June. This was partially offset by lower sales on other team sports merchandise.
On a conference call, TJ Flood, president of FGL Sports, said the Raptors’ win created “some tailwind” to results in the quarter and was “a great brand builder for us.”
He added, “We did a lot of things in the City of Toronto, both SportChek and Canadian Tire, in terms of refurbishing basketball courts and we had a lot of excitement at our Maple Leaf Square store.”
But strength in other categories also supported SportChek’s performance. Said Flood, “We’re actually excited about other categories we were able to grow, like footwear and apparel, accessories. So we had a pretty strong quarter and we’re excited about the growth prospects as we head into the back half of the year.”
Allan Angus MacDonald, Canadian Tire’s EVP of retail, said the company’s owned brands’ performance was a highlight at SportChek, collectively increasing 47 percent versus last year and now representing nearly 11 percent of sales.
Canadian-Tire owned brand selling at SportChek includes Woods, WindRiver, Outbound, Sher-Wood and Helly Hansen.
Helly Hansen, which was acquired on July 3, 2018, has become the second largest of SportChek’s owned brands “and is playing an increasingly larger role in making SportChek a destination for categories like rainwear,” said MacDonald. A full range of Helly Hansen’s assortments will be in stores for the first time in the fourth quarter.
Overall, Helly Hansen’s sales reached $98.6 million in the quarter, of which $15.3 million came from Canada. MacDonald noted that Helly Hansen’s sales in Canada were up 63 percent in the second quarter.
Stephen Wetmore, Canadian Tire’s CEO and president, said, “Helly Hansen is meeting our aggressive growth plans both here in Canada and throughout their international markets.”
The significant online gains at SportChek led by some higher freight costs that impacted overall margins.
In the Q&A session, MacDonald said Canadian Tire “is going to be competitive and vigorously defend our share” against e-commerce competitors while also talking up SportChek’s strong performance and positioning online.
He said SportChek’s online penetration is between 13 to 15 percent of sales, estimating that’s similar to the major sellers of sporting goods, apparel and footwear in the U.S. He suspected “that would surprise most people because it’s not something that we spend a lot of time talking about. But that category has had aggressive online sort of migration and SportChek has been right there defending it. But at the same time, all the work we’ve been doing at SportChek has been paying off because our bricks and mortar is equally performing really well.”
The SportChek segment had a total of 402 locations open at the close of the quarter, down from 408 a year ago. Of those, SportChek had 192 stores; Sports Experts 101; Atmosphere, 66; and other (National Sports, Sports Rousseau, Hockey Experts), 43.
Photo courtesy SportChek