Sporting Goods Providers Scoring Big as Consumers Take it Outside
With spring only a few weeks away and the pandemic forcing many sporting events into hiatus last year, children and adults are chomping at the bit to gear up for this season. Whether soccer, softball, lacrosse, track, golf, swimming, baseball or one of the many other outdoor activities, market research provider Statista estimates the sporting goods industry racks up some $40 billion annually in the U.S. alone.
While COVID-19 had a detrimental impact on sporting goods sales overall last year, some of the companies in the industry benefited from consumers gravitating to outdoor activities when gyms and indoor facilities were shuttered. Let’s take a look at a few of them.
DICK’S Sporting Goods, Inc. (Tii:DKS)
The sporting goods retailer has weathered the downturn better than most, with sales up some 5% for the nine months ended October 31, 2020. The company plans to report fourth-quarter results on March 9. Looking to get ahead of demand, DICK’s is expanding its nationwide footprint with the opening of three DICK’S Sporting Goods locations (Lewisville, TX, Las Vegas, Rockford, IL) and one Warehouse Sale location in Pittsburgh this month. These new stores will bring approximately 190 collective jobs to communities by hiring full-time, part-time, and temporary associates. The company also opened five new locations in February.
Vista Outdoor Inc. (Tii:VSTO)
With dozens of brands under its umbrella, Vista is a major provider of sporting goods that includes sporting ammunition, outdoor products, personal hydration solutions, sports optics, golf rangefinders, action sports helmets and goggles, footwear, a variety of cycling accessories and stand-up paddle boards. The company has benefited from the growing demand for outdoor activities at a time when indoor recreational options were severely limited. This trend contributed to a 35% increase in sales for Vista’s fiscal third quarter ended December 27, 2020. Named to the Forbes list of America’s Best Employers for 2021, shares of the company have experienced substantial growth over the last 12 months, gaining some 420%.
Wolverine World Wide, Inc. (Tii:WWW)
With brands that include Bates, Cat Footwear, Chaco, Harley-Davidson Footwear, Hush Puppies, HYTEST, Keds, Merrell, Saucony, Sperry, Stride Rite and Wolverine, the Rockford, Michigan-based footwear manufacturer is a popular supplier for outdoors and sports enthusiasts. That popularity and consumer demand contributed to a 31% increase in fourth-quarter eCommerce revenue, helping Wolverine exceed revenue and EPS expectations for the period. As an added bonus, the company offers a stock perk for its shareholders.
Johnson Outdoors Inc. (Tii:JOUT)
Some 13% of Americans take part in some form of water sports, a niche that Johnson Outdoors looks to fill. The global provider of outdoor recreation equipment that includes watercraft, fishing, and camping gear, has benefited from increased consumer interest in water-based activities that can be enjoyed while social distancing. These dynamics contributed to a 29% in net sales for the company’s fiscal first-quarter ended January 1, 2021 as strong demand in the company’s fishing, camping and watercraft recreation businesses offset lower demand for its diving products. Shares of Johnson Outdoors have doubled over the last 12 months.
Big 5 Sporting Goods Corporation (Tii:BGFV)
A leading sporting goods retailer with 431 stores in 11 states, Big 5 Sporting Goods offers athletic shoes, apparel and accessories, as well as a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, snowboarding and roller sports. For its fiscal 2020 full year, Big 5 reported net sales of $1.04 billion, compared to net sales of $996.5 million for fiscal 2019 on a 3% increase in same store sales. This is despite periods of significant store closures during the year associated with the COVID-19 pandemic. Steven G. Miller, the company’s Chairman, President and Chief Executive Officer, attributed the performance to merchandise margin expansion, an improved cost structure and capitalizing on key product trends.
Deckers Outdoor Corporation (Tii:DECK)
Proper footwear is a must for any physical activity. Doing business as Decker Brands, the footwear and apparel designer and distributor oversees a portfolio of brands that include UGG, KOOLABURRA, HOKA ONE ONE, Teva, and Sanuk. Decker, too, has managed to thrive despite the economic environment of the last 12 months, reaching record net sales. For its fiscal third quarter ended December 31, 2020, net sales increased 14.8% to a record $1.078 billion. The company attributed the strong results to its e-commerce platform and management’s ability to navigate the operational challenges that came with COVID-19.
Whether indoor sports make a full recovery in 2021 or later remains to be seen. However, despite the uncertainty, global management consulting firm McKinsey & Co. predicts the coming 12 months will likely be characterized by a more positive outlook for the sporting goods industry. And that’s no doubt good news for the retailers and manufacturers in the space.