Dick’s Sporting Items expands Home of Sport shops

As many retailers search for methods to shrink retailer counts and sq. footage, Dick’s Sporting Items goes larger.

The retailer is constructing extra sprawling “Home of Sport” shops, which usually are available in at 120,000 to 150,000 sq. toes, greater than double the 50,000 for its conventional places. The sporting items firm believes it is working.

“We wanted to construct the idea that can kill Dick’s Sporting Items,” Edward Stack, govt chairman and son of founder Dick Stack, informed CNBC in an unique interview at Dick’s Home of Sport retailer in Pittsburgh. “We have to construct the idea that if any individual else constructed this retailer throughout the road from us, we’re out of enterprise, and that is precisely what we did.”

As consumers prioritize experiences and selection, the places permit Dick’s to satisfy them the place they’re. Most Home of Sport shops have two-story climbing partitions; sports activities cages for testing bats; subject hockey and lacrosse sticks with statistical suggestions; out of doors fields that double as ice rinks within the winter; and golf simulators.

Past the experiences, Home of Sport has thrice as a lot sq. footage dedicated to footwear than a legacy retailer, plus 400 kinds of cleats within the Home of Cleats part and different manufacturers and merchandise unique to the idea.

“[House of Sport] has been wildly profitable” Stack stated. A typical Home of Sport retailer on an does round $35 million in annual gross sales throughout channels with an earnings earlier than curiosity, tax, depreciation and amortization fee of roughly 20%, “so these are extraordinarily, extraordinarily productive.” Dick’s Sporting Items does not escape EBITDA for the complete enterprise, although it did report earnings earlier than taxes in its most up-to-date quarter of 14%.

Earlier than the primary Home of Sport location opened, Stack stated Wall Road thought the retailer must be closing shops and decreasing its footprint.

“Their idea was, ‘I do not actually know what number of shops you’ve, however you’ve too many’ or ‘I do not actually know the way huge your retailer is, but it surely’s too huge, that you must make it smaller'” Stack stated. “Once I informed them, ‘Hey, our philosophy is that in 10 years, we’ll have most likely the identical quantity of shops, we may have much more sq. footage, that did not go over very effectively, you realize, and our inventory type of stalled out for that.'”

However Stack wasn’t dissuaded.  

The retailer’s first “Home of Sport” retailer opened in 2021, and the latest location in Jersey Metropolis, N.J. simply outdoors of New York Metropolis debuted this month. Dick’s plans to have 35 by the tip of the yr and as much as 100 by the tip of its fiscal 2027, along with its greater than 850 shops throughout all of its banners, together with Dick’s, Golf Galaxy and Public Lands.

There may be threat to the idea. Dick’s Sporting Items has stated it takes round $20 million of web capital expenditures to open a Home of Sport retailer, a major price outlay for a bodily retailer at a time when extra gross sales are shifting on-line.

Additional, most Home of Sport places are in malls, that are going through difficulties with shopper site visitors. Current examples present that even compelling experiential retail does not all the time translate into monetary success and may be tough to scale. These embrace a re-imagined Toys R Us post-bankruptcy, Saks Fifth Avenue and Barneys. Nike has had combined success with its massive flagship experiential ideas.

The additional shelf house at Home of Sport shops permits Dick’s to showcase extra of its model companions, each outdated and new. Nike, amongst different corporations, has been impressed by the idea, Stack stated.

“Nike administration staff got here in and noticed [House of Sport], they usually regarded round and stated, ‘that is completely one of the best expression of sport wherever on the planet,'” he stated.

Whereas Nike is engaged on rebuilding different wholesale partnerships below new CEO Elliott Hill, Stack stated “our relationship with Nike is nice.” Actually, Home of Sport presents Nike-produced Air Jordan and Kobe merchandise not out there elsewhere.

Stack stated the interconnection between expertise and in-store product testing results in merchandise gross sales. “That go to is just not in simply that go to, however then that they proceed to return again,” although he declined to share additional metrics.

A key merchandise technique for Home of Sport can be showcasing newer, smaller, extra premium manufacturers like Varley, Johnnie-O, Faherty, Marine Layer and others. There’s additionally a co-lab house, the place manufacturers are modified each 6 weeks or so. At present, U.Ok.-based GymShark is utilizing the rotating to check promoting in U.S. retail.

Whereas it is not essentially Dick’s objective to promote even the manufacturers that show profitable in Home of Sport within the legacy shops as effectively,  it may open the chance — or vice versa.

He pointed to working model On, which began within the Dick’s Public Lands retailer format, when “to be trustworthy with you, they have been testing us to only see what it is love to do enterprise with us,” Stack stated. He added that 4 years later, On is now in roughly 450 Dick’s shops and is without doubt one of the “premier manufacturers” at Home of Sport.

It isn’t simply manufacturers which are desirous about Home of Sport. The idea additionally helps mall house owners fill huge empty areas that after housed shops.

“Mall builders love having us do that now that they perceive what we’re doing, as a result of often within the Sears wing, or a wing that has a vacant division retailer for some time, that wing of the mall is just not often leased very effectively for the builders,” Stack stated. Most Home of Sport shops are positioned the place Sears, Lord & Taylor or Nordstrom was in A- or B-graded malls.

The megastores aren’t the one threat Dick’s has taken that rankled Wall Road. Traders aren’t but bought on the retailer’s $2.4 billion-Foot Locker acquisition.

“Lots of individuals, after we first made this acquisition, they did not prefer it,” Stack stated. “Our inventory obtained hammered, and we knew they weren’t going to love it.”

The deal was introduced in Might and closed Sept. 8, taking Dick’s Sporting Items complete retailer rely throughout all banners to round 3,200 in 20 nations.

Whereas Stack is main the Foot Locker integration, Ann Freeman, previously of Nike, is Foot Locker’s new North America president. And as Dick’s expands its bigger shops section, footwear will probably be a important element.

“Footwear is the engine that pulls the practice, and between [House of Sport footwear selection] and Foot Locker … it will finish as much as be a very good lifetime funding,” Stack stated.

Stack is invested in the way forward for the corporate. He stays the most important particular person shareholder, proudly owning 13.3% of excellent shares and 47% of voting energy, in keeping with the newest proxy from April 2025.

However even with investor disappointment over the Foot Locker deal, Dick’s shares have outperformed the athletic manufacturers it sells or competes with. Whereas the common analyst ranking is obese, the common goal worth is $241, simply 6% increased than its present worth.

Lululemon has shed greater than half its market cap this yr, Below Armour is down 42% yr thus far, On has misplaced 22% and Nike is down 9% in 2025.

A big a part of Dick’s Sporting Items’ enterprise facilities on youth sports activities. It is a $40 billion greenback annual market in keeping with the Aspen Institute, with spending per youngster for a main sport averaging $1,016 in 2024, up 46% in 2024 from 2019. 

Stack typically says his enterprise is extra insulated from macroeconomic pressures due to its youth athlete shopper, as mother and father aren’t typically shoving a rising kid’s toes into final yr’s cleats. The substitute cycle has doubtless contributed to 12 straight quarters of comparable gross sales development for the retailer and the very best gross sales in firm historical past. 

However product and sport innovation has additionally pushed gross sales throughout Dick’s Sporting Items enterprise. Self-expression in baseball for instance, has just lately elevated demand for colourful baseball mitts, baseball bats and $105 batting gloves which are amongst Home of Sport’s best-selling merchandise.

Stack stated “innovation is dearer” and “mother and father are outfitting their children, they need to give their children one of the best alternative to succeed and to carry out effectively.”

Stack, who oversaw huge growth for Dick’s, additionally credit “one of the best administration staff we have ever had” and stated “we by no means fall in love with ourself … we’re proud of one thing that we have succeeded at for about quarter-hour, after which we’re speaking about, how can we make that higher?” 

Going huge has been Stack’s modus operandi since he took over the two-location retailer his father began in 1948 and grew it into the $20 billion market cap firm it’s right this moment. Danger-taking, from new ideas to acquisitions, can be core to the DNA of the retailer Stack has constructed. 

“Every part in a gathering begins with ‘Sure, if…’ and might by no means begin with ‘No, as a result of…’ and that is been an enormous distinction in our enterprise,” he stated.

Correction: This text has been up to date to right Dick’s Sporting Items present banners and that it requires about $20 million of web capital expenditures to open a Home of Sport retailer. A earlier model misstated these particulars.