Dick's Sporting Goods (DKS) New Field & Stream (F&S) Store Concept No Threat to Cabelas (CAB)
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Rating Summary:
7 Buy, 13 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 19 | Down: 10 | New: 15
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At a analyst day yesterday, Dick's Sporting Goods (NYSE: DKS) laid out its plans for its new Field & Stream (F&S) store concept. The company is calling for ~55 stores and ~$750 million in sales by FY17. While some views this as a threat to Cabelas (NYSE: CAB), Northland Capital Markets analyst Reed Anderson is not overly worried.
While he thinks Dick's concept will be a success, he doesn't see any meaningful threat to Cabelas for several reasons. Chief among these is brand: "The Cabela's brand has been associated with authentic outdoors merchandise for over 50 years and is widely recognized for performance, quality and value," Reed notes. "Today Cabela's branded products account for nearly one-third of the company's +$3 billion of annual merchandise sales." While Field & Stream is no doubt a recognizable name associated with the outdoors, Reed supspects its more often remembered as a magazine. " F&S' positioning as a product brand has been extremely limited, largely concentrated on opening price points, which does little to convey the authenticity desired by core outdoors consumers," he notes.
Reed sees smaller chains as well as regionals and independents as the ones hurt by Dick's expansion of the F&S concept, not Cabelas.
While he thinks Dick's concept will be a success, he doesn't see any meaningful threat to Cabelas for several reasons. Chief among these is brand: "The Cabela's brand has been associated with authentic outdoors merchandise for over 50 years and is widely recognized for performance, quality and value," Reed notes. "Today Cabela's branded products account for nearly one-third of the company's +$3 billion of annual merchandise sales." While Field & Stream is no doubt a recognizable name associated with the outdoors, Reed supspects its more often remembered as a magazine. " F&S' positioning as a product brand has been extremely limited, largely concentrated on opening price points, which does little to convey the authenticity desired by core outdoors consumers," he notes.
Reed sees smaller chains as well as regionals and independents as the ones hurt by Dick's expansion of the F&S concept, not Cabelas.
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