Dick's Golf Business - Turning The Corner?

[GolfSpy Barbajo]

Dick's golf business stops bleeding, but hunting sales to keep hurting

 

 

Sporting goods retailer said golf sales, margins have improved; hunting to remain under pressure in current quarter

 

Bloomberg News

‘Big Bertha' has helped stop the bleeding in Dick's Sporting Goods' golf business

By

TOMIKILGORE

REPORTER

 

Dick's Sporting Goods appears to have stopped the bleeding in its golf business, but unseasonably warm weather has now opened new wounds in cold-weather product sales—notably in its hunting business.
 

The sporting goods retailer's stock DKS, -9.43%  plunged 12% in active afternoon trade Tuesday, putting it on track to close at the lowest level since January 2012, after the company's disappointing results and outlook. The stock has tumbled nearly 40% since the April 4, 2015 record close of $58.98.

Same-store sales at its Golf Galaxy stores declined for an 11th-straight quarter, but the company said that overall, sales of golf equipment and apparel increased and golf margins improved.

 

Chief Executive Ed Stack explained on a Tuesday conference call with analysts that while Golf Galaxy “ran a little behind” the results seen in Dick's branded stores, Golf Galaxy represented only about 3% of the company's total business, according to a transcript provided by FactSet. Stack said he saw reason to be optimistic on golf, given strong sales of new products, such as the M1 driver from TaylorMade and Callaway Golf Co.'s Big Bertha.
 

Stack said the golf business still won't be a big growth area, “it's just we think we've stopped the bleeding, so to speak, but it will be much more profitable.”
 

When asked by Deutsche Bank analyst Mike Baker whether the warmer-than-usual weather has helped drive golf's improvement, Stack said: “Yes, the weather has definitely helped the golf business, yes.”
 

At the same time, Stack said he believed the warm weather played a big role in hurting the hunting business, as it kept hunters from buying jackets, boots, socks and layering pieces.
 

The hunting business is expected to remain under pressure in the current quarter, the company said, as the weather isn't expected to get meaningfully colder through November.
 

Ironically, Chief Operating Officer Andre Hawaux said on the call that record-warm weather was helping boost same-store sales, to the higher end of expectations, until Labor Day. Then, “it's like somebody turned off the switch,” and cold-weather related apparel products started having a “really difficult time,” Hawaux said, according to FactSet transcripts.
 

Besides hunting gear, other products that have been hurt included compression products worn by football and soccer players, cold weather running apparel and accessories, ski pants and anything fleece, the company said.

[GolfSpy Barbajo]

Pretty sure the photo editor isn't an avid golfer...

[mcavoy]

Pretty sure the photo editor isn't an avid golfer...

haha!

[fozcycle]

How old is that Big Bertha?

[BIG STU]

How old is that Big Bertha?

HA HA probably close to being as old as you and I are    Just had to say it seriously I think 8 to 10 years old

[NiftyNiblick]

Whenever I go to Dick's, all I see is clubs that other people hit.

 

Don't ever look for anything special.

 

The drivers are almost all 10.5º  Forget finding a thirteen.  Forget finding a 4-wood or a full-size 7-wood either.

Very low bounce wedge options? Not at Dick's. 

 

They don't want to stock anything that may sit around for a while, which is why I lack respect for the entire off-course pro shop industry.  Golf clubs are meant to be ordered with specific requests, not bought in retail stores.

 

But Dick's sells Top Flite Gamer Tours, so I go there when I'm out of ammo.  I'd normally rather order them on line. That way, I can get "Nifty Niblick" printed on them and not have to screw around marking my golf balls with a Sharpie.

 

By the way, if you do find a ball marked "Nifty Niblick," it's mine.

[fozcycle]

HA HA probably close to being as old as you and I are    Just had to say it seriously I think 8 to 10 years old

 

 

You can still get a used one from Callaway for $50.

[NiftyNiblick]

HA HA probably close to being as old as you and I are    Just had to say it seriously I think 8 to 10 years old

 

 

You can still get a used one from Callaway for $50.

 

The last ERC model that I see listed is the 2004 ERC Fusion so our man Stu is pretty close.

 

[BIG STU]

You can still get a used one from Callaway for $50.

Depends on what shaft is in it if it is worth $50. I may be wrong but I think some versions of that driver were deemed non-conforming. If it had a decent shaft depending on what it is I might would buy one and pull the shaft and scrap the head

[BIG STU]

Whenever I go to Dick's, all I see is clubs that other people hit.

 

Don't ever look for anything special.

 

The drivers are almost all 10.5º  Forget finding a thirteen.  Forget finding a 4-wood or a full-size 7-wood either.

Very low bounce wedge options? Not at Dick's. 

 

They don't want to stock anything that may sit around for a while, which is why I lack respect for the entire off-course pro shop industry.  Golf clubs are meant to be ordered with specific requests, not bought in retail stores.

 

But Dick's sells Top Flite Gamer Tours, so I go there when I'm out of ammo.  I'd normally rather order them on line. That way, I can get "Nifty Niblick" printed on them and not have to screw around marking my golf balls with a Sharpie.

 

By the way, if you do find a ball marked "Nifty Niblick," it's mine.

Agree with you 100% and will take your word for it since I have not been in a Dick's store for over 5 years now. But if that is the case who ever is in charge is going strictly by sales figures. But as I have said before most golfers are not in tune with the game as us guys on MGS are and are not as good of a player and absolutely have no idea about specfic tuning with equipment to optimize their game. The go with what ever the ads say and then top that off with sales people that do not know a lot about the game in depth (IMHO) and I can see what you are saying. The pics at the beginning of the article will testify to this

[Jmikecpa]

Depends on what shaft is in it if it is worth $50. I may be wrong but I think some versions of that driver were deemed non-conforming. If it had a decent shaft depending on what it is I might would buy one and pull the shaft and scrap the head

I think that most of them have the proprietary Callaway shaft which was just absolute junk.

[fozcycle]

I think that most of them have the proprietary Callaway shaft which was just absolute junk.

I agree. I always pulled the stock shaft and replaced it with a Project X.

[rickkimbrell]

Not a fan of Dick's.  Dick's/Golf Galaxy...forget using a gift card from one at the other.  They do not allow.  Bought something at Dick's in Ohio.  Wanted to return it to Golf Galaxy (no Dick's anywhere close at the time in Houston)..."sorry sir, we cannot do that.  You bought that at Dick's."  

[mcavoy]

I agree. I always pulled the stock shaft and replaced it with a Project X.

But they didn't make it easy w/that thing with the bore thru design