“As expected, sales were impacted by the strategic decisions we made regarding the slow growth, low margin hunt and electronics businesses, which accounted for nearly half of our comp decline,” Dick’s Sporting Goods CEO Ed Stack said in the company’s earnings release. “In addition, we experienced continued significant declines in Under Armour sales as a result of their decision to expand distribution.”
On a call with analysts and investors, Stack went on to say the challenges with Under Armour should subside in 2019, as Dick’s finds new inventory — including new items from Under Armour — to fill its shelves.
“Our Under Armour business has been difficult,” the CEO said. “We are … looking at how we can grow moving forward. … Between us, we think we are going to get this figured out.”
Stack said he’s excited about Under Armour displaying more “premium” merchandise at Dick’s stores, like the HOVR sneaker, and sneakers and clothing from Under Armour’s new line with Dwayne Johnson.
“There will be a significant change [at Dick’s] in the direction of Under Armour,” he told analysts and investors Wednesday morning.
Under Armour shares have still climbed almost 40 percent so far this year, bringing its market cap to about $8.6 billion. Shares of Dick’s Sporting Goods, which were also falling by more than 7 percent Wednesday morning, are up about 16 percent over the same time period.