Sports Retail At Fever Pitch


Whether you’re a major league star or a weekend warrior, autumn is prime time for sports enthusiasts. And that's likely why Dick’s Sporting Goods (DKS), the nation's largest publicly traded sports store blew out earnings Tuesday. So what’s the trade?

Dick's Sporting Goods Chief Executive Ed Stack joins the guys for this conversation. Here are excerpts from what was said.

How important is this time of year?

“Between Back-To-School and fall sports, it’s important,” replies Stack. “(But) it’s not as important as The Holidays. Certainly the month of December is very important to us.”

Have any of the recent sports scandals had an impact on business?

“No,” says Stack. “It’s unfortunate to see what’s happening today at the professional level, but at the grass roots level, sports are alive and well.”

Why are you so successful when sporting goods are available at mass merchants?

“A glove at a mass merchant is very different from the gloves that we’re carrying, or the athletic shoes, or cleats or bats,” says Stack. “You can’t get the products we sell everywhere. And we have a number of products that are exclusive to us."

He adds “And we have products that we design and source ourselves under a number of brand names and you can’t get them at the mass merchants...”

Why did you buy Golf Galaxy when golf is flat?

“We had the opportunity to gain market share in this environment," answer Stack. “(It’s) the premiere specialty golf retailer in the country…. we think there’s a great opportunity to take market share from the smaller specialty retailers and also the mass merchants as we improve our golf selection."

Which brands are working best?

“We’ve got a pretty broad base of people we do business with,” replies Stack. “Nike (NKE),Under Armour (UA),Adidas, Callaway (ELY), the Titleist Group (FO)... they’re all important to us, but there is not one (brand) that’s a matter of life and death.”

Which sport is working best?

“Again, we’ve built a balanced portfolio,” says Stack.

How big is Under Armour for Dick’s?

“It’s very good,” says Stack. “It’s one of our largest vendors that we do business with.... (and) the guys at UA have been great… They listen to what we have to say.. and they’re in tune with the market and I think the brand has a lot of legs.”

Do you think Nike is worried about Under Armour?

“Under Armour continues to do well, but Nike continues to do well also,” says Stack. “And these are just two giants in the industry that are going to dominate."

He adds “And our business with Nike is growing at a rapid rate, along with Under Armour so we feel very close to both of these brands.”

Dylan Ratigan asks the panel what they think of this stock?

Constance Hunter doesn’t like it. She feels they overpaid for Galaxy Golf.

Guy Adami, Pete Najarian and Jeff Macke love this stock.


Click below to see video of Fast Money's interview with Ed Stack from April 2, 2007

> Pop Trade: Sporting Goods


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Trader disclosure: On Aug 21 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money; Macke Owns (INTC), (ATVI), (EMC); Najarian Owns S&P Puts; Constance Hunter Is The Founder And Owner Of Coronat Capital Management; Coronat Capital Management Owns (INFY),(H&M), (USO); Coronat Capital Management Owns Yen; Coronat Capital Management Owns VIX Options; Coronat Capital Management Is Short (FXI); Coronat Capital Management Is Short (EWH) But Owns Local-Listed Hong Kong Shares