The world’s largest retailer will end free shipping for online orders under $50 Canadian starting April 2.
Online sales rose 54% for Dick’s Sporting Goods in the chain’s fiscal Q4.
Online sales grew 54.2% in the fiscal fourth quarter of 2012 for Dick’s Sporting Goods Inc., and the retail chain plans more e-commerce investments in the coming year, including letting shoppers buy online and pick up in store.
The web was a bright spot in a quarter in which same-store sales fell 2.2% at the company’s 518 Dick’s Sporting Goods stores and increased 1.3% at its 81 Golf Galaxy stores.
“We have demonstrated we can meaningfully grow our e-commerce business at an aggressive pace in a way that’s both profitable and increasing in profitability,” chairman and CEO Edward W. Stack told analysts on a conference call Monday. He also noted improvements to the retailer’s mobile commerce site and an enhanced mobile app that lets customers look up and redeem their loyalty points.
During the course of the past fiscal year, Stack said, the company has enabled all the Dick’s Sporting Goods stores to fulfill online orders, and now plans to add the buy online/pickup in store option. The company opened some 40 stores in the past fiscal year, and found the new stores led to more online sales in those areas. “As we open up stores in new markets our e-commerce penetration goes up pretty dramatically,” Stack said.
Company executives also told analysts that the retailer will from now on report e-commerce sales as part of comparable-store sales. If it had done that in the fourth quarter, they said, comparable-store sales would have been ahead 1.2%, reflecting the sharp increase in online orders, which accounted for 8.6% of the company’s sales in Q4.
For the 53-week fiscal year ended Feb. 2, 2013, Dick’s Sporting Goods reported:
- Dick’s did not provide full-year e-commerce sales. But, based on previous reports and this earnings release, Internet Retailer estimates that online sales for Dick’s increased 46.1% in fiscal 2012 to $276.7 million from $189.4 million in the prior 52-week fiscal year.
- Net sales totaled $5.84 billion, up 12.0% from $5.21 billion in the prior fiscal year.
- Net income increased 10.2% to $290.7 million from $263.9 million.
- Consolidated same-store sales, comparing 52 weeks to 52 weeks, increased 4.3%.
- E-commerce accounted for 4.7% of total company sales, versus 3.6% in the prior year.
For the 14-week fiscal fourth quarter ended Feb. 2, 2013, Dick’s Sporting Goods reported:
- Online sales grew 54.2% to $137.6 million from $89.2 million.
- Net sales of $1.805 billion, up 12.0% from $1.612 billion in the prior year’s 13-week fourth quarter.
- Net income increased 16.8% to $129.7 million from $111.1 million.
- The web accounted for 8.6% of sales, compared with 5.5% a year earlier. Stack predicted e-commerce will account for an even larger share of the company’s business in the fourth quarter of the coming fiscal year.
The company also indicated that about a third of its growth investments in fiscal 2013, apart from the 40 or so new stores it plans to open, will go to building up its e-commerce infrastructure and team. Internet Retailer estimates that spending will total about $5 million for the coming fiscal year.
Dick’s Sporting Goods uses GSI Commerce, now part of eBay Inc., to host and operate its e-commerce site, though the retailer in December said it had pulled back the expiration date of that contract to 2017 from 2024. In speaking of the investments in e-commerce infrastructure, Stack told analysts, “We now do a lot of this through GSI, but we’re building this infrastructure ahead of where the sales are.”
Stack did not elaborate on what that meant for Dick’s ongoing relationship with GSI, and the company did not immediately return a call seeking comment.
The company projected consolidated same-store sales growing 2-3% in the coming fiscal year, compared with 4.3% last year.
The retailer is No. 101 in the Internet Retailer Top 500 Guide.