The Weakness And The Rising Tide
Dick's Sporting Goods (DKS) is one of the main retailers of sports goods in the United States and like almost every retailer, it has been operating in an increasingly challenging situation characterized by several headwinds such as the increasing competition from eCommerce players, declining foot traffic, and margin pressures, to name a few. The company derives a much larger portion of revenue from sports equipment in comparison to peers such as Foot Locker (FL), Hibbett Sports (HIBB), Big 5 Sporting Goods (BGFV) and Finish Line (FINL), which rely more on athletic footwear. I shared my skepticism about the prospects of an investment in DKS in a few previous articles because I didn’t see an attractive risk/reward, mainly because the headwinds the company was facing were still strong.
