A recent report from eBay sheds some new light on its payments arm, set to go solo later this year.
Online sales represented 12.2% of fourth quarter revenue, boosted by TV advertising dedicated to Dicks.com and an expanding program of shipping web orders from stores.
Dick’s Sporting Goods Inc. reported yesterday a 65% increase in online sales in its 2013 fiscal year to over $480 million and outlined further steps to more closely link its e-commerce sites with its bricks-and-mortar stores.
While Dick’s, like a growing number of retail chains, no longer discloses its online sales in dollar terms each quarter, the company said e-commerce represented 12.2% of total sales in its fiscal fourth quarter, which ended Feb. 1, 2014. With net sales of $1.9 billion for the quarter, that would make online sales roughly $232 billion, an increase of 68% from the $138 billion Internet Retailer calculated for Dick’s web sales in the prior-year quarter. That suggests two-thirds of the retailer’s Q4 sales growth came from e-commerce.
Company executives attributed the Q4 growth to its first-ever TV ads devoted to Dicks.com and an expanded program of shipping online orders from its physical stores. That included increasing by 120% in the fourth quarter the items consumers could order online that would be fulfilled by stores.
“We are very pleased with how well we did from an e-commerce standpoint this fourth quarter,” president and chief operating officer Joe Schmidt told analysts yesterday, according to a transcript from SeekingAlpha. “Our team did a great job, we got very aggressive from marketing our e-commerce business not only in the traditional inserts that we put in the newspaper, but also we did our first-ever dedicated TV ad to just e-commerce and we had great results.”
Besides expanding its ship-from-store program, Dick’s also began testing in January a buy online, pick up in store option at about 100 of its 558 Dick’s Sporting Goods locations. However, Dicks.com still doesn’t offer the in-store pickup option in all product categories, chairman and CEO Ed Stack told analysts. “This is really in its infant stage right now and will accelerate through the balance of the year,” he said.
Stack also told analysts Dicks.com, No. 94 in the 2013 Top 500, increased its conversion rate by over 30% over the course of the last fiscal year, though he did not say what the current conversion rate is.
Dick’s officials also described how the retailer is beginning to take control of its e-commerce operation, which it has outsourced for years to GSI Commerce, now part of eBay Inc. Dick’s will bring its e-commerce operation in house by the end of its 2016 fiscal year, which ends in early 2017. That transition will improve the company’s gross profit margin, Stack said. He said the gross margin of online sales is currently lower than for store sales because of the fees Dick’s pays GSI for purchases made on Dicks.com.
Meanwhile, Schmidt said the company will continue “our journey towards e-commerce independence” by relaunching its GolfGalaxy.com e-commerce site on its own platform later this year. Dick’s operates 79 physical Golf Galaxy stores.
For its 2013 fiscal year, ended Feb. 1, 2014, Dick’s reported:
- E-commerce sales grew 65% to over $480 million and represented 7.9% of sales. For fiscal 2012, Internet Retailer calculates online sales for the retailer totaled $276.7 million.
- Net sales of $6.21 billion, up 6.3% from $5.84 billion year over year. The company said net sales increased 6.5%. Based on company figures, Internet Retailer calculates more than half of its sales growth came from the web.
- Same-store sales, which include e-commerce, increased 2.4% for Dick’s Sporting Goods and decreased 7.1% for Golf Galaxy for the 52-week fiscal 2013 compared to the 53-week fiscal 2012. On a comparable 52-week basis, consolidated same-store sales increased 1.9%.
- Net income of $337.6 million, an increase of 16.1% from $290.7 million in the prior year.
For the fiscal fourth quarter ended Feb. 1, 2014, Dick’s reported:
- E-commerce accounted for 12.2% of sales. Based on that percentage, Internet Retailer estimates the retailer’s web sales grew 68% to $232 million from $138 million in the same quarter a year ago.
- Total net sales of $1.947 billion, up 7.9% from $1.805 billion.
- Same-store sales for Dick’s increased 7.9% and fell 11.7% for golf Galaxy in the 13-week fourth quarter of fiscal 2013 versus the 14-week quarter of the prior year. On a comparable 13-week basis, consolidated same-store sales, including e-commerce, increased 7.3%.
- Net income of $138.6 million, an increase of 6.9% from $129.7 million a year earlier.