Dick’s Sporting Goods (NYSE: DKS) reaps rewards of going big

Small ball is the prevailing theme in retail now, with big chains shrinking their stores as they adapt to the explosive growth of online sales.

But for Dick’s Sporting Goods (NYSE: DKS), the modus operandi is go big or go home. Dick’s, the nation’s largest sporting goods chain, has chosen the former. It has opened 21 super stores, called the House of Sport, in the last four years and plans to create dozens more over the next decade, The Wall Street Journal reports. Dick’s has more than 850 locations overall, including some specialty stores.

The House of Sport stores encompass 120,000-140,000 square feet, more than twice the size of a traditional Dick’s. They include climbing walls, outdoor turf fields with running tracks, golf simulators, hockey rinks and a caged turf area for baseball, lacrosse, field hockey and soccer.

That gives customers a chance to try equipment before they buy it. The idea seems to make a lot of sense. 

And it’s apparently paying off for Dick’s. House of Sport stores rack up sales, including the online variety, of about $35 million in their first year of operation, according to the Journal. That’s 2 ½ times what new smaller Dick’s stores garner. With the super stores, Dick’s is trying to avoid stagnation and stay ahead of its competition.

Dick’s stock outperforms

The last few years have been tough ones for brick-and-mortar retailers amid the onslaught of Internet shopping. But Dick’s stock has bucked the trend, generating a total annualized return of 21% over the past three years amid rising profit margins. That compares to 8% for the S&P 500, negative 16.5% for Foot Locker and negative 17% for Nike.

Dick’s is obviously doing something right. “Consumers are drawn to Dick’s vast, on-trend product assortment and differentiated in-store experience and service model, which foster brand loyalty,” writes Morningstar analyst David Swartz. Those same factors attract sporting goods makers too.

Dick’s stock slipped for a few days earlier this month after offering a weaker-than-expected earnings outlook for 2025. But the long term looks good, analysts say. Swartz forecasts same-store sales growth will average around 2.5% annually going forward. And he sees the company maintaining its competitive advantages for at least 10 years.

“Dick’s remains a key destination for consumers and big-name vendors, standing resilient while many peers have shuttered,” he says.