Dick’s Sporting Goods posted strong results in fiscal 2023, which ended Feb. 3, 2024, with $13 billion in net sales, 5% higher than the previous year, and a 2.4% increase in comp store sales. For the coming fiscal year, the retailer is planning $800 million in CapEx expenditures to fund a major brick-and-mortar expansion that will enlarge its total store square footage by 2% — its largest physical expansion since 2017.
The retailer also is debuting its new 50K DICK’S format, which “completely revolutionizes our most typical 50,000-square-foot store,” said Lauren Hobart, President and CEO of Dick’s on a conference call discussing the results. Dick’s plans to open a total of 16 50K stores in 2024, consisting of 12 relocations or remodels and four new stores. Dick’s also will open eight new House of Sport locations in 2024, consisting of seven relocations/conversions and one new store at Boston’s Prudential Center. The retailer also expects to begin construction on approximately 15 House of Sport locations scheduled to open throughout 2025.
Dick’s also is expanding its Golf Galaxy banner stores, with plans to remodel five stores into Golf Galaxy Performance Centers along with five new Performance Centers. The retailer also will begin construction on a new regional distribution center scheduled to open in 2026.
During the conference call, CFO Navdeep Gupta explained why Dick’s is so bullish on the House of Sport and 50K formats: “For a new House of Sport, in year one, we expect approximately $35 million in omnichannel sales and a very strong profitability with a target of approximately 20% EBITDA margins,” he said. “In terms of capital, it will take about $11.5 million of net CapEx to open a House of Sport location, resulting in an expected year-one cash-on-cash return of approximately 35%.
“We also expect attractive returns from our next-generation 50K DICK’S store investments, where we are targeting approximately $14 million in year-one omnichannel sales and a comparable EBITDA margin of approximately 20%,” Gupta added.
Dick’s also is expanding its footwear footprint, with plans to add approximately 50 full-service footwear decks, “taking this elevated athlete experience to nearly 90% of our Dick’s locations,” said Gupta.
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