Cutthroat is how one analyst describes the sporting goods retail industry with the major players Dick?s Sporting Goods and Sports Authority expanding with new stores even as Wall Street investors worry about sales at existing stores.
Last month, Sports Authority re-opened its remodeled Baltimore-area store at 8200 Perry Hall Blvd. giving the Englewood, Colo.-based company 10 stores in Maryland.
Sports Authority, which was publicly traded until this year, is the largest of the chains with 402 stores in 45 states. It was bought this year for $1.3 billion by Leonard Green & Partners, a Los Angeles private equity firm, which took the company private.
Ryan Fuhrmann, a certified financial analyst who writes about sporting goods retailers for the Motley Fool, an investment advice newsletter, called the industry cutthroat and said: “The sporting-related retail industry is crowded and investors tend to punish the stocks at the first sign of any weakness in comparable store sales.”
Greg Waters, chief operating officer of Sports Authority, said, “The reopening of our remodeled White Marsh store gives us the continued opportunity to bring top-of-the-line products and services to local sports enthusiasts.”
Dick?s Sporting Goods, based in Pittsburgh and one of the few publicly traded retailers, has nine stores in Maryland, including on at 5220 Campbell Blvd. in Baltimore.
Last week, Dick?s reported record second-quarter earnings of $25.7 million or 47 cents per share, up from $22.1 million or 41 cents per share for the same period a year ago.
Dick?s bought Gaylan?s sports goods stores in 2004, which helped boost the bottom line.
“We are clearly gaining market share as legacy stores, former Gaylan?s stores and new stores all performed well during the quarter,” Dick?s Chief Operating Officer Edward Stack said in the SEC filing.
Dick?s operates 268 stores in 34 states, and has announced plans to open 40 new stores by the end of 2006.
Edward Weller, a financial analyst with Think Equity Partners in San Francisco, said Sports Authority, Dick?s and the smaller Modell?s, which has 125 stores in 10 states and the District of Columbia, will likely expand their markets.
“They are putting all the small, mom-and-pop stores out of business,” Weller said. “There is room for all of them to grow.”
