On Tuesday reported Dick’s Sporting Goods reported fourth-quarter earnings in its Q4 2017 DICK’S Sporting Goods, Inc. Earnings Conference Call. Earnings slightly topped analysts’ estimates, but revenue and same-store sales fell short. Net income totaled $116 million, for the quarter ended February 3, compared with $90.2 million, a year ago.
Net sales for the 14-week fourth quarter of 2017 increased 7.3% to approximately $2.66 billion. Consolidated same-store sales decreased 2.0% on a 13-week to 13-week comparative basis compared to the Company’s guidance of a low single-digit decrease. Fourth quarter 2016 consolidated same-store sales increased 5.0%.
More interestingly for our readers Private Brand was the star of the call with no less then 22 mentions from the Dicks executive team. Private Brand is very clearly a key strategic initiative for the retailer.
“Amidst a competitive environment, we are very pleased to deliver fourth quarter results in line with our expectations, driving growth across key businesses. As expected, margins remained under pressure, however the decline was less than we anticipated,” said Edward W. Stack, Chairman and Chief Executive Officer. “During 2017, we made significant progress on key priorities as we grew both our online and private brand businesses to over one billion dollars in sales.”
Mr. Stack continued, “In 2018, we expect stronger product innovation from select key partners and the continued expansion of our private brands to result in less margin pressure than previously expected. We see meaningful opportunity to drive improvements across our business and will make significant investments that will continue to position DICK’S Sporting Goods as the leader in our industry.”
“Looking ahead, we see considerable opportunity to deliver a stronger performance as we make improvements to our business,” added Lauren R. Hobart, President of DICK’S Sporting Goods. “Across the organization, we are focused on executional excellence and enhancing our omni-channel capabilities as we continue to transform to meet our customer’s ever-changing needs. Our priorities include elevating the customer experience across our stores and our website, and leveraging the strength of our brand to deepen customer engagement and drive omni-channel traffic.”
During the call Stack repeatedly addressed the importance of Private Brand.
“We also drove strong comp growth in our private brands, which significantly outpaced the Company average, posting strong double-digit comp sales gains and improved margin rates.”
“Additionally, we remain focused on driving differentiation and exclusivity within our assortment, particularly in our private brands. This year, our private brand significantly outpaced the Company average as we grew this business to more than a billion dollars and expanded gross margins. We expect our own brand growth again to outpace the Company average in 2018.”
“During ’18, we will accelerate in our private brand area, investments in talent, as well as marketing, design and technology capabilities to drive growth in our key brands, such as CALIA, Field & Stream, Top-Flite, Walter Hagen, and Fitness Gear. We’ll also launch a couple of new brands this year.”
During the Q&A Ed Stack gave some color on private brand
“Our private brands will have more space this year than they did last year, primarily driven by I think we said Field & Stream CALIA. We have a licensing agreement with Reebok. Probably 90% of the product apparel product you see on our floor is Reebok. The Gulf brands we have from an apparel standpoint, Walter Hagen, Slazenger have done extremely well combined. So we’re going to see more space there and less space in some of the brands that are not performing as well. The innovation pipeline, the Nike has we’re really very enthusiastic about that. We’re enthusiastic about what’s going on with Adidas also.”