In this segment from the Motley Fool Money radio show, host Chris Hill, Million Dollar Portfolio's Jason Moser and Matt Argersinger, and Motley Fool Total Income's Ron Gross discuss the issues facing a couple of niche retail players. Dick's Sporting Goods (NYSE:DKS) can't escape its need for large stores that require commensurately large foot traffic, and Foot Locker (NYSE:FL) (though it's doing better than Dick's) is facing serious headwinds. After Sports Authority went belly up, you'd expect its rivals would be benefiting. Doesn't seem like that happened.

A full transcript follows the video.

This video was recorded on May 19, 2017.

Chris Hill: From general retail to athletic retail, tough week for a couple of teams. After their latest quarterly reports, shares of Foot Locker down 15%, shares of Dick's Sporting Goods down 20%. And Jason, I think back to when Sports Authority went out of business, and one of my thoughts at the time was, "Oh, this will probably help the Foot Lockers and Dick's Sporting Goods of the world." Apparently not.

Jason Moser: One would think. It does seem like that probably hasn't played out as well as the management teams of those two companies were hoping. I think with Dick's Sporting Goods, comps were positive, but they were lower than expected. They are going to be slowing down the pace of opening new stores. I think that's one of the real marks against this company. Those stores are just such big footprints. It costs a lot of money to get that real estate and to keep it open. That means you have to gin up a lot of traffic, and plainly that traffic isn't going there.

Furthermore, what's really keeping them down here is, e-commerce sales grew 11% for the quarter, but they made up 9.3% of total sales for the quarter. That compares to 9.2% a year ago, so they're basically not gaining any share on the e-commerce front, either. A lot of problems there. Consequently, you have shares now trading around 11 times full-year estimates, which is significant. Back in November of 2016, we were talking about this, and shares were trading around 20 times. So, obviously, expectations are very low for Dick's Sporting Goods. It's funny, because when you look at Dick's Sporting Goods compared to Foot Locker, I think most people would probably think Dick's Sporting Goods is a better company. Foot Locker is by far and away the more successful business. Bigger footprint, bigger company, better revenue, better margins. For Foot Locker, I think it's a lot of the same, but they're far more well established. I think that's why the stock is still trading somewhere in the neighborhood of 20 times earnings today. 3,300 stores versus a much smaller footprint for Dick's Sporting Goods.

Ron Gross: What about that Foot Locker is really a mall-based retailer, while Dick's is sometimes next to the mall or in a strip mall, but not being affected by the tough times that malls are going through?

Moser: Possibly, but then you also have to remember, that mall footprint or strip mall footprint is far less expensive, particularly today, given the traffic challenges, and you are still catching incremental traffic that's there for whatever reason. There are more reasons to go to a mall than there would be to go to one store, for example. I think that's where they're probably at least able to get some straight traffic no matter what.

Matt Argersinger: What's also fascinating, the derivative of all this, of course, is that you see Nike hitting a three- or four-year low, Under Armour, of course, has struggled. I wonder, this particular channel for those big athletic brands is really hurting right now. If it doesn't bounce back, a company like Under Armour, which really depends on that channel, is going to be struggling for a while.

Moser: Yeah, and when you look at Foot Locker, Dick's Sporting Goods, companies like that, a lot of their inventory is made up of Nike and Under Armour. So, that's why we're seeing Nike and Under Armour getting pulled back along with these drops. The nice thing is, with Nike and Under Armour, those are companies that had the wherewithal to build out very robust direct-to-consumer operations, and that is ultimately going to keep them moving forward, whereas Dick's and Foot Locker and companies like that, they have some serious challenges ahead of them.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.