Dick’s Isn’t Getting Dicked by Amazon: Here’s Why

An analyst at Deutsche Bank recently pointed out several reasons that Dick’s Sporting Goods (DKS) stores are relatively safe from Amazon.com (AMZN), the online behemoth whose profit-blind expansion has crippled many a brick-and-mortar competitor like Dick’s. In the spirit of celebrating the achievement of an old fashioned retailer, we’ll point out a couple of ways Dick’s financial metrics bite Amazon’s too.

DKS Operating Margin TTM Chart

DKS Operating Margin TTM data by YCharts

Dick’s is turning its sales into profits, widening its operating margin, while Amazon is making less and less as its sales grow.

DKS Free Cash Flow TTM Chart

DKS Free Cash Flow TTM data by YCharts

Amazon’s free cash flow has declined so much during this growth spurt that tiny Dick’s has almost as much of it. For the record, Dick’s has a market cap of $6.46 billion and trailing 12-month revenues of $5.89 billion. Amazon is a $126.6 billion market cap company, with last 12-month revenues of $63.98 billion.

Amazon consistently kills companies like Dick’s on revenue growth, even though its rate of growth has been declining. But Dick’s is making more real money.

DKS Revenue Quarterly YoY Growth Chart

DKS Revenue Quarterly YoY Growth data by YCharts

DKS Net Income TTM Chart

DKS Net Income TTM data by YCharts

Clearly, we are looking at two very different growth strategies in these charts. Dick’s is building economies of scale as it expands. Amazon is betting that the profit- and cash-flow-draining strategies of today will result in outsized profit growth later. Those strategies include pricing products and adding perks (free shipping) to attract customers that would otherwise go to bricks and mortar stores like Dick’s.

Retailers as big as Best Buy (BBY) to Target (TGT), and as small as the local pet supply store, have seen sales fall off to Amazon.

Which is why Dick’s shareholders can take some comfort from that Deutsche Bank analysis. Looking at 190 of Dick’s best-selling products, the report found that only 12 were sold and shipped by Amazon itself. Of those 190 products, 55 didn’t appear on Amazon.com at all, even for sale by outside vendors.

We can point out one more way Dick’s is avoiding the A-bomb of retailing: guns and ammo. Dick’s new chain of Field & Stream stores, which will be aimed at hunters and fishers, will sell both. (Dick’s Sporting Goods stores don’t.) Go try to buy that on Amazon.

YCharts, proclaiming Amazon the Suicide Bomber of Retail (it trashes other companies’ profits, as well as its own), has extensively covered the competitive retail landscape and how Amazon has altered it. TJX (TJX) sidesteps amazon by stocking goods the online giant doesn’t have. We’ve written recently about Amazon’s threat to Staples (SPLS) ; how some Amazon-resistant stocks are crushing the market; eBay’s (EBAY) competition with Amazon ; and Ulta’s (ULTA) vulnerability to Amazon.

Dee Gill, a senior contributing editor at YCharts, is a former foreign correspondent for AP-Dow Jones News in London, where she covered the U.K. equities market and economic indicators. She has written for The New York Times, The Wall Street Journal, The Economist and Time magazine. She can be reached at editor@ycharts.com. You can also request a demonstration of YCharts Platinum.

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