Dick’s Sporting Goods expands House of Sport stores

As many retailers look for ways to shrink store counts and square footage, Dick’s Sporting Goods is going bigger.

The retailer is building more sprawling “House of Sport” stores, which typically come in at 120,000 to 150,000 square feet, more than double the 50,000 for its traditional locations. The sporting goods company believes it’s working.

“We needed to build the concept that will kill Dick’s Sporting Goods,” Edward Stack, executive chairman and son of founder Dick Stack, told CNBC in an exclusive interview at Dick’s House of Sport store in Pittsburgh. “We need to build the concept that if somebody else built this store across the street from us, we’re out of business, and that’s exactly what we did.”

As shoppers prioritize experiences and choice, the locations allow Dick’s to meet them where they are. Most House of Sport stores have two-story climbing walls; sports cages for testing bats; field hockey and lacrosse sticks with statistical feedback; outdoor fields that double as ice rinks in the winter; and golf simulators.

Beyond the experiences, House of Sport has three times as much square footage devoted to footwear than a legacy store, plus 400 types of cleats in the House of Cleats section and other brands and merchandise exclusive to the concept.

“[House of Sport] has been wildly successful” Stack said. A typical House of Sport store on an does around $35 million in annual sales across channels with an earnings before interest, tax, depreciation and amortization rate of roughly 20%, “so these are extremely, extremely productive.” Dick’s Sporting Goods doesn’t break out EBITDA for the full business, though it did report earnings before taxes in its most recent quarter of 14%.

Before the first House of Sport location opened, Stack said Wall Street thought the retailer should be closing stores and reducing its footprint.

“Their concept was, ‘I don’t really know how many stores you have, but you have too many’ or ‘I don’t really know how big your store is, but it’s too big, you need to make it smaller'” Stack said. “When I told them, ‘Hey, our philosophy is that in 10 years, we’ll have probably the same amount of stores, we will have a lot more square footage, that didn’t go over very well, you know, and our stock kind of stalled out for that.'”

But Stack wasn’t dissuaded.  

The retailer’s first “House of Sport” store opened in 2021, and the newest location in Jersey City, N.J. just outside of New York City debuted this month. Dick’s plans to have 35 by the end of the year and up to 100 by the end of its fiscal 2027, in addition to its more than 850 stores across Dick’s, Golf Galaxy, Field & Stream, Public Lands, and Warehouse Sale banners.

There is risk to the concept. Dick’s Sporting Goods CFO Navdeep Gupta has said on earnings calls it takes around $11.5 million of net capital expenditures to open a House of Sport store, a significant cost outlay for a physical retailer at a time when more sales are shifting online.

Further, most House of Sport locations are in malls, which are facing difficulties with shopper traffic. Recent examples show that even compelling experiential retail doesn’t always translate into financial success and can be difficult to scale. Those include a re-imagined Toys R Us post-bankruptcy, Saks Fifth Avenue and Barneys. Nike has had mixed success with its large flagship experiential concepts.

The extra shelf space at House of Sport stores allows Dick’s to showcase more of its brand partners, both old and new. Nike, among other companies, has been impressed by the concept, Stack said.

“Nike management team came in and saw [House of Sport], and they looked around and said, ‘this is absolutely the best expression of sport anywhere in the world,'” he said.

While Nike is working on rebuilding other wholesale partnerships under new CEO Elliott Hill, Stack said “our relationship with Nike is great.” In fact, House of Sport offers Nike-produced Air Jordan and Kobe merchandise not available elsewhere.

Stack said the interconnection between experience and in-store product testing leads to merchandise sales. “That visit is not in just that visit, but then that they continue to come back,” though he declined to share further metrics.

A key merchandise strategy for House of Sport is also showcasing newer, smaller, more premium brands like Varley, Johnnie-O, Faherty, Marine Layer and others. There’s also a co-lab space, where brands are changed every 6 weeks or so. Currently, U.K.-based GymShark is using the rotating to test selling in U.S. retail.

While it’s not necessarily Dick’s goal to sell even the brands that prove successful in House of Sport in the legacy stores as well,  it could open the opportunity — or vice versa.

He pointed to running brand On, which started in the Dick’s Public Lands store format, when “to be honest with you, they were testing us to just see what it’s like to do business with us,” Stack said. He added that four years later, On is now in roughly 450 Dick’s stores and is one of the “premier brands” at House of Sport.

It’s not just brands that are interested in House of Sport. The concept also helps mall owners fill massive empty spaces that once housed department stores.

“Mall developers love having us do this now that they understand what we’re doing, because usually in the Sears wing, or a wing that has a vacant department store for a while, that wing of the mall is not usually leased very well for the developers,” Stack said. Most House of Sport stores are located where Sears, Lord & Taylor or Nordstrom used to be in A- or B-graded malls.

The megastores aren’t the only risk Dick’s has taken that rankled Wall Street. Investors aren’t yet sold on the retailer’s $2.4 billion-Foot Locker acquisition.

“A lot of people, when we first made this acquisition, they didn’t like it,” Stack said. “Our stock got hammered, and we knew they weren’t going to like it.”

The deal was announced in May and closed Sept. 8, taking Dick’s Sporting Goods total store count across all banners to around 3,200 in 20 countries.

While Stack is leading the Foot Locker integration, Ann Freeman, formerly of Nike, is Foot Locker’s new North America president. And as Dick’s expands its larger stores segment, footwear will be a critical component.

“Footwear is the engine that pulls the train, and between [House of Sport footwear selection] and Foot Locker … it’s going to end up to be a really good lifetime investment,” Stack said.

Stack is invested in the future of the company. He remains the largest individual shareholder, owning 13.3% of outstanding shares and 47% of voting power, according to the latest proxy from April 2025.

But even with investor disappointment over the Foot Locker deal, Dick’s shares have outperformed the athletic brands it sells or competes with. While the average analyst rating is overweight, the average target price is $241, just 6% higher than its current price.

Lululemon has shed more than half its market cap this year, Under Armour is down 42% year to date, On has lost 22% and Nike is down 9% in 2025.

A large part of Dick’s Sporting Goods’ business centers on youth sports. It’s a $40 billion dollar annual market according to the Aspen Institute, with spending per child for a primary sport averaging $1,016 in 2024, up 46% in 2024 from 2019. 

Stack often says his business is more insulated from macroeconomic pressures because of its youth athlete consumer, as parents aren’t often shoving a growing child’s feet into last year’s cleats. The replacement cycle has likely contributed to 12 straight quarters of comparable sales growth for the retailer and the highest sales in company history. 

But product and sport innovation has also driven sales across Dick’s Sporting Goods business. Self-expression in baseball for example, has recently increased demand for colorful baseball mitts, baseball bats and $105 batting gloves that are among House of Sport’s best-selling products.

Stack said “innovation is more expensive” and “parents are outfitting their kids, they want to give their kids the best opportunity to succeed and to perform well.”

Stack, who oversaw massive expansion for Dick’s, also credits “the best management team we’ve ever had” and said “we never fall in love with ourself … we’re happy with something that we’ve succeeded at for about 15 minutes, and then we’re talking about, how can we make that better?” 

Going big has been Stack’s modus operandi since he took over the two-location retailer his father started in 1948 and grew it into the $20 billion market cap company it is today. Risk-taking, from new concepts to acquisitions, is also core to the DNA of the retailer Stack has built. 

“Everything in a meeting starts with ‘Yes, if…’ and can never start with ‘No, because…’ and that’s been a huge difference in our business,” he said.