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Hibbett Sports Whisper

Hibbett Sports Whisper
 

Research Question: Can Hibbett Sports successfully continue its store expansion as Dick’s Sporting Goods also expands aggressively?

Companies Covered: Hibbett Sports (HIBB), Dick’s Sporting Goods (DKS)

Report Available: August 2, 2013

 

Blueshift’s initial research shows HIBB initiating a new market strategy and rapidly opening new stores, while also facing competition from an equally aggressive and innovative DKS.

 

Observations

  1. HIBB reported a 3% overall year-to-year sales increase in its recent Q1 earnings call driven by activewear, footwear, and accessories. It also received positive results from its pilot markdown optimization program, intended to help price products appropriately given regional differences in store locations. Sales in various product subclasses within the pilot improved 25%, inventory turns increased by 20.5%, and gross margin ROI improved by 12%.
  2. HIBB has been rapidly expanding its store base in the U.S. focusing on smaller regional markets, where it plans to add 70 to 75 stores and expand/remodel 18 high-preforming stores in fiscal 2014. Three of these new locations will be in KentuckyAlabama, and Georgia.
  3. DKS’ aggressive expansion plans include opening 40 new stores and remodeling 75 by year end, as well as using a store-within-a-store market strategy which mimics consumers’ buying behavior. Other retailers have found this strategy to be more profitable by targeting a specific audience. DKS is also heavily investing in ecommerce, which now represents 5.8% of its business up from 3.7% year-to-year in Q1, due to the positive response from consumers.

 

Blueshift will gather data and issue a market research report from independent sources in the following areas: supply chain, store personnel, customers, and industry specialists.

 

To see other ideas Blueshift Research is currently working on, please click here.