Turning Real Estate Into Logistics and Experiences: How Dick's is Staying Relevant

Today's company is Dick's Sporting Goods.

I recently visited a Dick's House of Sport in Minnetonka, MN and I was blown away with the store. A fair amount of that is due to me remembering how dumpy I thought their stores were 10 or so years ago. This one is new and has a great selection and awesome overall vibe.

But I'm spoiled. The godfather of sporting goods retailers, Scheels, has its HQ in my backyard. I used to think Scheels was a 10x better store than Dick's but their new concept is catching up. The homer in me thinks they’ve simply copied a lot from Scheels. But to their credit, its working.

Here are a few interesting things about them:

• They started with $300 in 1948. Now worth $17.3 billion.

• Their gun stance cost them $250M in revenue. Stock went up but I'm not a fan. I prefer Scheels approach of selling what their customers want, including guns.

• 70% of their online orders ship from stores (turning real estate into a logistics network)

The money shot:

• Revenue: $13.6B (trailing twelve months)

• Net Income: $1.15B

• Gross Margin: 36%

• Still growing comp sales at 5.2%

My primary takeaway:

• Experience enables margins - Their House of Sport stores are packed while pure e-commerce players struggle with price wars. Circling back to Scheels...I rarely feel like I make bargain purchases there but I'm completely fine with it. That's the definition of using a good customer experience to drive margins.

A few not so positive things to keep your eye on:

• There aren't many opportunities for private label products in sporting goods

• Nike is 20% of sales and expanding direct-to-consumer

• Youth sports participation declining nationally

• Amazon leads U.S. sporting goods e-commerce with roughly 35 to 40% online market share and they aren't slowing down

Most retailers are getting crushed by Amazon. Dick's is thriving. The difference? They figured out what physical stores are actually good for in 2025.

With that, I'll see you tomorrow.

Nick

TL;DR

• Dick's transformed from a $300 bait shop (1948) into America's largest sporting goods retailer with 850+ stores and $13.6B in revenue

• Key insight: Experiential retail + deep vendor relationships = sustainable moat against Amazon

• Principled gun stance cost $250M short-term but strengthened brand long-term

• Omnichannel excellence: 70% of online orders fulfilled from stores

• Main takeaway: Community investment and authentic values create competitive advantages that convenience alone can't beat

The 30,000-Foot View

Dick's operates as an omnichannel sporting goods powerhouse selling equipment, apparel, and footwear through physical and digital channels. The company generates 85% of sales from stores and 15% from e-commerce, with ost customers shopping at both physical stores and online channels.

Revenue Mix:

• Hardlines: 36.45%

• Apparel: 32.92%

• Footwear: 28.48%

• Services/Other: 2.15%

Key Stats:

• Market Cap: $17.37 billion

• TTM Revenue: $13.59 billion

• Gross Margin: 36.0%

• Net Income: $1.154 billion

• Employees: ~53,000

• Industry: NAICS 451110 - Sporting Goods Stores

Company History

• 1948 - Dick Stack opens bait shop in Binghamton, NY with $300

• 1984 - Edward Stack becomes CEO at 29, begins superstore vision

• 2002 - IPO at $12.25/share with 134 stores

• 2018 - Stops selling assault weapons post-Parkland

• 2021 - Lauren Hobart becomes first female CEO

• 2025 - Announces $2.4B Foot Locker acquisition

Show Me the Money

Stand-out Features:

• Consistent comp store growth (5.2% in FY2025)

• $3B share buyback authorization

• CapEx tripled to support experiential stores (it would be fun to look at store-level IRR)

• Maintained net cash position despite expansion

Financial Data

The N.O.O.B. Nine — Competitive Powers

The Nerd Out on Business Nine is made up of Hamliton Helmer's famous "7 Powers" of competitive advantage (Scale Economies, Network Economies, Counter-Positioning, Switching Costs, Branding, Cornered Resource, and Process Power) combined with two of my own (Data Flywheel and Distribution Advantage).

Average Score: 3.2/5 - With a 3.2/5, Dick's has built a solid competitive moat through experiential retail and omnichannel execution.

Memorable Marketing

Dick's centers marketing on authentic community connection through sports participation.

Key Campaigns:

• "Sports Change Lives" (2023) - 75th anniversary anthem celebrating sports' transformative power. Worked through authentic brand mission connection.

• "There She Is" (2021-2024) - Subversive Miss America theme over female athletes. Created cultural commentary that resonated widely.

• "Speed Shopping" (2025) - Viral creator IShowSpeed with Brady/Durant. Blended social content with athletic credibility.

Tactical Takeaways:

• Invest in community programs beyond transactions

• Take bold cultural stances aligned with values

• Create experiences online competitors can't replicate

• Blend traditional advertising with social-first content

AI Uses & Opportunities

Current Uses:

• Oracle Retail Labs for dynamic pricing (11M weekly SKU changes)

• Inspectorio for supplier quality control

• Metrical for cart abandonment prediction

• Microsoft Azure for edge computing

Future Ideas:

• Virtual fitting rooms to reduce returns

• AI coaching integrated with GameChanger

• Predictive analytics for local inventory optimization

• Computer vision for checkout-free stores

Bumps in the Road

• Gun Policy Fallout - Lost $250M revenue after assault weapon ban; faced boycotts but ultimately strengthened brand

• Nike Dependency - 20% of sales at risk as Nike expands direct-to-consumer

• Amazon Competition - Faces 35.8% online market share leader

• Supply Chain Pressures - COVID-era freight and input cost spikes (that normalized through 2023–2024)

• Youth Sports Decline - Core customer acquisition driver facing nationwide participation drops

Your Swipe File

• Experience beats convenience - House of Sport proves customers will drive for rock climbing walls over clicking "buy now"

• Stores are fulfillment centers - 70% of online orders ship from stores, turning real estate into logistics

• Community investment compounds - $100M+ Sports Matter program created emotional moat that's hard for Amazon replicate

• Vendor relationships are key - Deep Nike partnership survived when others got cut