Press Release:
Dick’s Sporting Goods Reports Second Quarter Results; Exceeds Earnings Expectations
– Consolidated non-GAAP earnings per diluted share increased 21% to $0.52 per diluted share in the second quarter of 2011 from $0.43 per diluted share in the second quarter of 2010
– Consolidated same store sales increased 2.5% in the second quarter of 2011
– Company raises full year estimated non-GAAP earnings range from $1.91 to 1.93 per diluted share to a range of $1.94 to 1.96 per diluted share
– Company ended the second quarter of 2011 with $626 million in cash, without any outstanding borrowings under its credit facility
PITTSBURGH, Aug. 16, 2011 /PRNewswire/ — Dick’s Sporting Goods, Inc. (NYSE:DKS – News) today reported sales and earnings results for the second quarter ended July 30, 2011.
Second Quarter Results
The Company reported consolidated non-GAAP net income for the second quarter ended July 30, 2011 of $65.1 million, or $0.52 per diluted share, excluding a $0.07 per diluted share impact from a gain on sale of investment. The second quarter consolidated non-GAAP earnings per diluted share exceeded estimated earnings expectations provided on May 17, 2011 of $0.47 – 0.49 per diluted share.
On a GAAP basis, the Company reported consolidated net income for the second quarter ended July 30, 2011 of $73.8 million, or $0.59 per diluted share. The GAAP to non-GAAP reconciliations are included in a table later in the release under the heading “Non-GAAP Net Income and Earnings Per Share Reconciliation.” For the second quarter ended July 31, 2010, the Company reported consolidated net income of $51.5 million, or $0.43 per diluted share.
Net sales for the second quarter of 2011 increased by 6.6% to $1.3 billion due primarily to a 2.5% increase in consolidated same store sales and the opening of new stores. The 2.5% consolidated same store sales increase consisted of a 1.7% increase at Dick’s Sporting Goods stores, a 4.0% increase at Golf Galaxy stores and a 31.9% increase in its e-commerce business.
“In the second quarter, we delivered profitable growth that exceeded our earnings projections while continuing to strengthen our balance sheet. While top line sales started slow in the quarter, June and July comps accelerated at a pace above our quarterly target of approximately 3%,” said Edward W. Stack, Chairman and CEO. “We also made marked progress in developing all of our growth drivers by adding productive, profitable stores; building our e-commerce business; and expanding our overall margin rates. As a result, we are well positioned to continue to meaningfully grow our business.”
New Stores
In the second quarter, the Company opened eight Dick’s Sporting Goods stores. These stores are listed in a table later in the release under the heading “Store Count and Square Footage.”
As of July 30, 2011, the Company operated 455 Dick’s Sporting Goods stores in 42 states, with approximately 25.1 million square feet and 81 Golf Galaxy stores in 30 states, with approximately 1.3 million square feet.
Balance Sheet
The Company ended the second quarter of 2011 with $626 million in cash and cash equivalents and did not have any outstanding borrowings under its $440 million credit facility. At the end of the second quarter of 2010, the Company had $278 million in cash and cash equivalents and did not have any outstanding borrowings under its credit facility.
The inventory per square foot was 0.9% lower at the end of the second quarter 2011 as compared to the end of the second quarter of 2010.
Year-to-Date Results
The Company reported consolidated non-GAAP net income for the 26 weeks ended July 30, 2011 of $102.6 million, or $0.82 per diluted share. On a GAAP basis, the Company reported consolidated net income for the 26 weeks ended July 30, 2011 of $111.3 million, or $0.89 per diluted share. For the 26 weeks ended July 31, 2010, the Company reported consolidated net income of $77.7 million, or $0.64 per diluted share.
Net sales for the first half of 2011 increased 6.5% from the first half of 2010 to $2.4 billion primarily due to a consolidated same store sales increase of 2.3% and the opening of new stores.
See Page 2 for updated 2011 guidance
Current 2011 Outlook
The Company’s current outlook for 2011 is based on current expectations and includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as described later in this release. Although the Company believes that the expectations and other comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations or comments will prove to be correct.
Full Year 2011
Based on an estimated 126 million diluted shares outstanding, the Company currently anticipates reporting consolidated non-GAAP earnings per diluted share of approximately $1.94 – 1.96, excluding a gain on sale of investments. For the full year 2010, the Company reported consolidated non-GAAP earnings per diluted share of $1.63, excluding Golf Galaxy store closing costs and litigation settlement costs. On a GAAP basis, the Company reported consolidated earnings per diluted share of $1.50 in 2010.
Consolidated same store sales are currently expected to increase approximately 1 – 2% compared to a 7.2% increase last year.
The Company currently expects to open approximately 36 new Dick’s Sporting Goods stores, remodel 14 Dick’s Sporting Goods stores, and relocate one Golf Galaxy store in 2011.
Third Quarter 2011
Based on an estimated 126 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share of approximately $0.24 – 0.26 in the third quarter of 2011. In the third quarter of 2010, the Company reported consolidated non-GAAP earnings per diluted share of $0.22.
Consolidated same store sales are currently expected to increase approximately 1 – 2% compared to a 5.1% increase in the third quarter last year.
The Company expects to open approximately 18 new Dick’s Sporting Goods stores in the third quarter of 2011.
Capital Expenditures
In 2011, the Company anticipates capital expenditures to be approximately $252 million on a gross basis and approximately $197 million on a net basis.
“While some may view our top line guidance as being conservative, we believe that the current instability in many global markets and the uncertainty in the domestic macro economic environment, warrant a cautious outlook,” stated Mr. Stack. “With our proven ability to execute on our margin expansion opportunities and to manage inventory and expenses, we’ve maintained our earnings expectations for the second half of the year.”
About Dick’s Sporting Goods, Inc.
Dick’s Sporting Goods, Inc. is an authentic full-line sporting goods retailer offering a broad assortment of brand name sporting goods equipment, apparel and footwear in a specialty store environment. The Company also owns and operates Golf Galaxy, LLC, a golf specialty retailer. As of July 30, 2011, the Company operated 455 Dick’s Sporting Goods stores in 42 states, 81 Golf Galaxy stores in 30 states and e-commerce web sites and catalog operations for both Dick’s Sporting Goods and Golf Galaxy. Dick’s Sporting Goods, Inc. news releases are available at https://www.dickssportinggoods.com/investors. The Company’s web site is not part of this release.
