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DICK'S Sporting Prepares for the Holiday Fest, Plans Hiring

Zacks Equity Research

Retailers rely on the common strategy of hiring seasonal staff ahead of the holiday season to deal with the festive period rush at stores. With the holiday season around the corner, DICK’S Sporting Goods Inc. DKS recently took its turn to announce hiring plans, not much later than retailers like Target Corporation TGT, The Michaels Companies, Inc. MIK and The Gap, Inc. GPS, who have organized hiring events in the past few weeks.

DICK’S Sporting expects to hire up to 8,000 associates during its second-annual "National Signing Day" to be held nationwide on Oct 16. The seasonal hires will not only receive an attractive pay but also gain other pre-requisites like up to 25% discount on store merchandise. Additionally, the hires will get the opportunity to gain experience by working with the best sports and outdoor brands.

DICK’S Sporting’s hiring plans for this fiscal year indicate that it is enthusiastic about a huge holiday rush. This has led it to hire more seasonal employees than its plan of hiring up to 5,000 workers last year.

The holiday season is a crucial time for retailers as it accounts for a sizeable chunk of yearly revenues and profits. Retailers try to attract customers with early-hour store openings, huge discounts and promotional strategies. However, concerns related to trade war, rising crude prices, sluggish business spending and other geopolitical issues are fueling worries of an economic slowdown. In fact, the imposition of tariffs has left some retailers with no other choice than opting for selective price increases while trying not to hurt sales during the holiday season.

Nonetheless, keeping the concerns aside for a while and going by Deloitte’s recent holiday sales projection, retailers are all set to revel again in the euphoria of the upcoming festive season.

Holiday sales are projected to increase 4.5-5% and exceed $1.1 trillion between November 2019 and January 2020. Meanwhile, e-commerce sales are estimated to improve 14-18% to reach $144-149 billion. Numbers look robust compared with the last year when sales in December were affected by the U.S. government shut down, battered stock market and increase in consumer savings.

Coming back to DICK’S Sporting, it is on track with the efforts to remove the hunting category from its stores, which has been a troubled category for a while. In the fiscal second quarter, the company eliminated the hunting category from nearly 125 more stores (where the category was underperforming). This category was replaced with a more compelling assortment.

Backed by these efforts, the company generated positive consolidated comparable store sales (comps) growth in the fiscal second quarter. Comps were aided by the rise in average ticket and transactions. This has marked its strongest quarterly comps since fiscal 2016. The company now anticipates same-store sales to be up in a low-single digit in fiscal 2019, whereas it reported a decline of 3.1% in fiscal 2018.

Driven by these efforts, this Zacks Rank #2 (Buy) company has gained 23% year to date against the industry’s decline of 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Furthermore, the company has been gaining from the plans to make significant investments in e-commerce, technology, store payroll, Team Sports HQ and private brands. It also remains on track to build the best omni-channel experience for athletes by strengthening store network and expanding e-commerce presence.

Investments throughout fiscal 2019 will be focused on enhancing in-store experiences for athletes, improving e-commerce fulfillment capabilities, and developing technology solutions to boost athlete experience and employee productivity. Keeping in these lines, the company opened two dedicated e-commerce fulfillment centers in New York and California.

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