When its chief brick-and-mortar rival, Sports Authority, declared bankruptcy, it seemed like Dick's Sporting Goods (NYSE:DKS) had a clear path to success. In reality, the reasons Sports Authority failed plague Dick's too.
The chain, however, has steadily worked to fix its issues and has had some success. It posted a 6% gain in same-store sales in the third quarter and raised its full-year guidance.
Those are the chain's best quarterly comparable-store sales since 2013. That success -- and the long-term plans the company has put into place -- have shown that physical locations remain important for growth.
Dick's is adding stores
While Dick's has been closing some locations, it has also added stores. In Q3 it opened six new signature locations and one new Galaxy Golf. It has followed that with selective openings each month, with four new stores coming online in March, including two Dick's locations and two Galaxy Golf stores.
The numbers are small but the fact that the chain is adding locations is important. Opening new stores allows Dick's to take advantage of underserved markets or to move into highly trafficked retail real estate.
Staying in the game
Dick's has changed some of its merchandise and invested heavily in making its brand omnichannel. New locations can take advantage of everything the company has learned while adding to its ability to ship orders quickly.
The chain does not need to add a ton of stores. Instead, it should keep picking its spots and grow in the markets that make the most sense.