In a regulatory filing, the country’s biggest sporting-goods chain said it would furlough staff at its stores, distribution centers and headquarters effective April 12, 2020, "due to the uncertainty surrounding the length of its store closures.”
The closures stem from the coronavirus pandemic. Dick’s in recent years has faced intense competition from discount brick-and-mortar retailers, such as Walmart (WMT) - Get Report, and online retailers, such as Amazon.com (AMZN) - Get Report.
The Pittsburgh company, like so many others, already has slashed capital spending and cut executive salaries in light of the pandemic. It also said last month that it’s considering a dividend cut.
In addition, Dick’s notified the landlords of its stores that it doesn’t expect to pay rent in light of the coronavirus scourge, labeling the situation a force majeure, the Pittsburgh Business Times reported. That allows it to halt rent payments, the company argued.
Dick's has more than 700 stores in 47 states and 97 Golf Galaxy locations.
Analysts told the Business Times that plenty of other retailers will likely try to forgo their rent as well.
On March 10, before the coronavirus had intensified in the U.S., Morningstar analyst David Swartz labeled Dick’s shares undervalued.
“Although we view Dick’s as a no-moat firm, we think it benefits from the popularity of major athletic brands and is in better shape than many of its smaller sporting goods rivals,” he wrote in a report.
Dick’s stock recently traded at $24.44, up 2.5%.