The resumption of sports tournaments and other outdoor activities has helped the sporting goods industry witness strong sales this year. Consequently, we think sporting goods retailers Dick’s Sporting Goods (DKS) and Sportsman’s Warehouse (SPWH) are well-positioned to profit handsomely in the coming months. But which of these stocks is a better buy now? Read more to find out.Dick’s Sporting Goods, Inc. (DKS) and Sportsman’s Warehouse Holdings, Inc. (SPWH) are two prominent retailers in the sporting goods industry. DKS in Coraopolis, Pa., provides sporting goods equipment, hunting and fishing gear products, apparel, and footwear and accessories. The company also owns and operates Golf Galaxy, Field & Stream, and other specialty concept stores, e-commerce websites, and GameChanger, a youth sports mobile app. As of May 1, 2021, it operated 730 company-owned stores. In comparison, SPWH in Midvale, Utah, offers a broad range of products, including clothing, camping, fishing, footwear, hunting and shooting, boating, optics, electronics, and other accessories. In addition, the company’s stores provide archery technician services, fishing-reel line winding, gun bore sighting and scope mounting, cleaning services, and issuing hunting and fishing licenses. As of March 31, 2021, the company operated through 112 stores in 27 states.
Despite a travel ban and social distancing restrictions, the sporting goods industry was resilient during the pandemic because people focused on playing individual sports and home workouts. However, increasing vaccination rates and the lifting of travel restrictions have resulted in the rescheduling of big sports tournaments and other outdoor activities this year. As a result, brick-and-mortar store sales and e-commerce sales witnessed huge growth in the first half of this year. The global sporting goods market is expected to grow at a 3.2% CAGR and reach $62.84 billion by 2027. So, both DKS and SPWH should benefit.
But while SPWH’s stock has lost 28.5% in price over the past six months, DKS has surged 11.8%. DKS is a clear winner with 93.6% gains versus SPWH’s negative returns in terms of their year-to-date performance. But which of these stocks is a better pick now? Let us find out.