DICK'S Sporting Goods, Inc. (DKS): history, ownership, mission, how it works & makes money

A Brief History of DICK'S Sporting Goods, Inc.

DICK'S Sporting Goods, Inc. has established itself as a leading retailer in the sporting goods industry, with a significant presence across the United States. The company operates over 860 stores as of August 3, 2024, showcasing a steady growth trajectory in both store count and revenue.

Company Overview

Founded in 1948 by Dick Stack, the company began as a small bait and tackle shop in Binghamton, New York. Over the decades, it expanded its offerings and transformed into a full-line sporting goods retailer. DICK'S went public in 2002 and has since become a prominent player in the industry, known for its extensive product range, which includes apparel, footwear, and equipment for various sports.

Financial Performance

For the 26 weeks ended August 3, 2024, DICK'S reported net sales of $6.49 billion, an increase from $6.07 billion in the same period the previous year. This represents a 7.0% year-over-year growth. The company's gross profit for the same period was $2.37 billion, reflecting a gross margin of 36.52%, an increase from 35.25% in the prior year.

Operational Highlights

During the second quarter of 2024, DICK'S achieved net income of $362.2 million, or $4.37 per diluted share, compared to $244.3 million, or $2.82 per diluted share, in the same quarter of 2023. The company also reported an operating income of $470.1 million, up from $311.8 million year-over-year.

Store Expansion and Strategy

DICK'S continues to expand its footprint, opening new stores and enhancing existing locations. As of August 3, 2024, the company operated 861 stores, including 725 DICK'S Sporting Goods stores and 136 specialty concept stores. The store count has increased from 860 stores in the previous year.

Shareholder Returns and Dividends

In 2024, DICK'S has maintained a strong commitment to returning value to shareholders. The company declared a quarterly cash dividend of $1.10 per share, with total dividends paid amounting to $183.1 million during the first half of the year.

Liquidity Position

As of August 3, 2024, DICK'S had cash and cash equivalents totaling $1.69 billion, providing a solid liquidity position to support ongoing operations and future growth initiatives. The company also has a $1.6 billion credit facility, with no borrowings outstanding at this time.

Market Position and Future Outlook

DICK'S Sporting Goods remains well-positioned in the competitive sporting goods market, leveraging its extensive retail network and strong brand equity. The company anticipates continued growth driven by strategic store openings and enhancements to its omni-channel capabilities.

As of August 3, 2024, DICK'S has a strong credit rating of Baa3 from Moody's and BBB from Standard & Poor's, upgraded to Baa2 in August 2024, reflecting the company's solid financial health and operational resilience.

A Who Owns DICK'S Sporting Goods, Inc. (DKS)

Shareholder Composition

As of 2024, DICK'S Sporting Goods, Inc. (DKS) has a diverse shareholder composition consisting of institutional investors, individual shareholders, and insiders.

Major Institutional Shareholders

Institutional investors hold a significant portion of DICK'S shares. The following table details the largest institutional shareholders as of 2024:

Insider Ownership

Insiders, primarily executives and board members, maintain a modest ownership stake in DICK'S Sporting Goods, which aligns their interests with those of shareholders.

Stock Performance and Market Capitalization

As of August 3, 2024, DICK'S Sporting Goods reported a market capitalization of approximately $7.5 billion. The stock has shown a year-to-date performance of +15%, reflecting investor confidence amid strong sales growth.

Recent Financial Highlights

In the second quarter of 2024, DICK'S Sporting Goods reported net sales of $3.47 billion, an increase of 7.8% year-over-year. The company also recorded a net income of $362.2 million, or $4.37 per diluted share.

Dividend Policy

DICK'S Sporting Goods has consistently returned capital to shareholders through dividends. As of September 2024, the company declared a quarterly cash dividend of $1.10 per share, payable on October 4, 2024.

Conclusion

DICK'S Sporting Goods, Inc. is primarily owned by institutional investors, with significant insider ownership that fosters alignment with shareholder interests. The company's robust financial performance and strategic initiatives contribute to its strong market position and shareholder value.

DICK'S Sporting Goods, Inc. (DKS) Mission Statement

Overview of the Mission Statement

DICK'S Sporting Goods, Inc. aims to provide athletes and outdoor enthusiasts with the best possible products, services, and experiences to help them achieve their personal best. The company is committed to inspiring and enabling all athletes to embrace their passion for sports and outdoor activities.

Core Values

• Customer Commitment: DICK'S is dedicated to delivering excellent customer service and providing products that enhance the customer experience.
• Integrity: The company operates with honesty and transparency in all its dealings.
• Teamwork: DICK'S emphasizes collaboration among employees to foster a supportive work environment.
• Community Engagement: The organization supports local communities through various initiatives and partnerships.

Financial Performance Overview

As of August 3, 2024, DICK'S Sporting Goods reported significant financial growth. The following table summarizes key financial metrics:

Store Expansion and Strategy

DICK'S Sporting Goods continues to focus on expanding its store footprint. The company operated 861 stores as of August 3, 2024, with plans to open additional locations, including DICK’S House of Sport and Golf Galaxy Performance Centers. New store openings and relocations are a part of their strategic growth plan to enhance customer access and improve the shopping experience.

Shareholder Returns

The company has been proactive in returning value to shareholders through dividends and share repurchase programs. In the first half of 2024, DICK'S repurchased 0.8 million shares at a cost of $163.6 million. The quarterly cash dividend was declared at $1.10 per share, indicating a strong commitment to shareholder returns.

Community and Sustainability Initiatives

DICK'S Sporting Goods is committed to social responsibility, engaging in initiatives that support community health and wellness. The company actively participates in environmental sustainability efforts, promoting responsible sourcing and reducing its carbon footprint.

Future Outlook and Goals

Looking ahead, DICK'S Sporting Goods anticipates continued growth with a focus on eCommerce expansion and enhanced omni-channel capabilities. The company projects comparable sales growth in the range of 2.5% to 3.5% for the fiscal year, alongside earnings per diluted share expected between $13.55 and $13.90.

How DICK'S Sporting Goods, Inc. (DKS) Works

Financial Performance

DICK'S Sporting Goods reported robust financial performance for the second quarter of 2024. Net sales increased by 7.8% to $3.47 billion compared to $3.22 billion in the same quarter of 2023. Adjusting for a calendar shift, comparable sales rose by 4.5%.

The company recorded a net income of $362.2 million or $4.37 per diluted share, up from $244.3 million or $2.82 per diluted share year-over-year.

Store Operations

As of August 3, 2024, DICK'S Sporting Goods operated 861 stores, a net increase from 860 stores the previous year. The company opened 7 new stores during the second quarter of 2024, while closing 5 stores.

The total square footage of DICK'S stores at the end of the period was 43.2 million square feet, up from 42.4 million square feet a year earlier.

Cost Structure and Profitability

DICK'S Sporting Goods achieved a gross profit of $1.28 billion in Q2 2024, a significant increase from $1.11 billion in Q2 2023. The gross profit margin improved to 36.52% compared to 35.25% the previous year.

Operating income for Q2 2024 rose to $470.1 million, compared to $311.8 million in Q2 2023. Selling, general, and administrative expenses increased by 4.2% to $796.7 million.

Liquidity and Capital Resources

As of August 3, 2024, DICK'S Sporting Goods had $1.69 billion in cash and cash equivalents. The company also maintains a $1.6 billion unsecured credit facility, with no borrowings outstanding at the time.

Capital expenditures for the 26 weeks ended August 3, 2024, totaled $372.1 million, primarily focused on the development of their omni-channel platform and new store openings.

Shareholder Returns

DICK'S Sporting Goods declared a quarterly cash dividend of $1.10 per share, which was paid to stockholders on October 4, 2024. The company repurchased 0.8 million shares for $163.6 million during the 26 weeks ended August 3, 2024.

How DICK'S Sporting Goods, Inc. (DKS) Makes Money

Revenue Streams

DICK'S Sporting Goods generates revenue primarily through retail sales, which includes both in-store and online transactions. For the 26 weeks ended August 3, 2024, net sales increased by 7.0% to $6,492.0 million compared to $6,065.8 million for the prior year period. This reflects a comparable sales increase of 4.9%, adjusted for a calendar shift due to the 53rd week in fiscal 2023, which contributed approximately $140 million to net sales.

Sales Performance

In the second quarter of 2024, DICK'S reported net sales of $3,473.6 million, a 7.8% increase from $3,223.6 million in the second quarter of 2023. The increase was influenced by a favorable calendar shift and growth in specific categories such as footwear and athletic apparel.

Cost of Goods Sold (COGS)

For the 26 weeks ended August 3, 2024, DICK'S reported a COGS of $4,121.0 million, which reflects a gross profit of $2,371.0 million, resulting in a gross margin of 36.52%. The reduction in inventory shrinkage and improved merchandise margins contributed to this performance.

Operating Income

Operating income for the 26 weeks ended August 3, 2024, was reported at $800.9 million compared to $637.4 million for the same period in the previous year. This indicates a strong operational performance, aided by effective cost management strategies.

Expenses

Selling, general and administrative (SG&A) expenses amounted to $1,540.1 million for the 26 weeks ended August 3, 2024, reflecting an increase of 5.6% from the prior year. This increase was primarily due to higher incentive compensation and marketing expenses.

Capital Expenditures

DICK'S capital expenditures for the 26 weeks ended August 3, 2024, totaled $372.1 million, focusing on the development of its omni-channel platform and store investments. The company anticipates total capital expenditures of approximately $800 million for fiscal 2024, which will include new store development and technology enhancements.

Shareholder Returns

During the 26 weeks ended August 3, 2024, DICK'S paid out $183.1 million in dividends to shareholders and repurchased 0.8 million shares at a cost of $163.6 million. The quarterly cash dividend declared was $1.10 per share.

Liquidity and Financial Position

As of August 3, 2024, DICK'S had cash on hand of $1.69 billion and no outstanding borrowings under its $1.6 billion credit facility. This strong liquidity position supports ongoing operational needs and potential future investments.

Store Growth and Expansion

As of August 3, 2024, DICK'S operated 861 stores, up from 860 stores at the end of the previous year. The company plans to continue expanding its footprint with new store openings, including DICK’S House of Sport locations.