Dick's Sporting Goods, Inc. reported net income for the first quarter ended May 1, 2004 increased 64% to $10.9 million and earnings per share increased 50% to 21 cents per diluted share as compared to net income of $6.7 million and earnings per share of 14 cents per diluted share for the quarter ended May 3, 2003. Total sales for the quarter increased 20% to $364.2 million. Comparable store sales increased 4.6%.
“We are pleased to begin the fiscal year with such a strong first quarter,” said Edward W. Stack, Chairman and CEO. “We again executed on the inventory management front with comp sales of 4.6%, gross profit margin increasing 100 basis points and a decline in inventory per square foot of 2.6%.”
“In addition, this quarter, we opened six new stores with a plan to open an additional 19 by the end of the year. We also continued building our infrastructure for the future as we broke ground on the 200,000 square foot expansion of our distribution center planned to be in operation early next year.”
Four of the new Q1 stores were in new markets: Three in the Indianapolis, IN metropolitan area (Greenwood, Castleton and Avon), and Myrtle Beach, SC. Two of the stores opened were in existing markets: Niles, OH (the second store in the Youngstown market) and Plainville, CT (the third store in the Hartford market). As of May 1, 2004, the Company operated 169 stores in 27 states.
For second quarter 2004, net income is expected to be $16.8 million to $17.2 million, compared to last year's net income of $15.5 million in the second quarter, an increase of 8% – 11%. Based on an estimated 52.5 million fully-diluted shares outstanding, EPS for the second quarter is expected to be 32 cents to 33 cents per diluted share, a 3% to cents per share. Last year's second quarter included $0.02 per fully-diluted share of gain from the sale of stock of our third-party internet commerce service provider, while this year's second quarter estimate includes $0.01 per fully-diluted share of expenses for the relocation of a store.
Comparable store sales are expected to increase 2% to 3%. There are no stores planned to open in the second quarter. The Company expects to relocate three stores during the quarter. Expenses associated with the relocations are expected to be approximately $0.7 million after-tax. These expenses are included in the guidance for net income and EPS above and in the full year guidance below.
For full year 2004, net income is expected to be $67.6 million to $68.1 million, compared to last year's net income of $52.8 million, an increase of 28 – 29%. Prior guidance for net income was $65.7 million to $66.5 million.
Based on an estimated 53.2 million fully-diluted shares outstanding, the Company now anticipates reporting EPS for the full year of $1.27 to $1.28 per diluted share, an increase from the prior guidance of $1.24 to $1.25. Compared to last year's earnings per fully-diluted share of $1.05, this represents an increase of 21% to 22%.
Comparable store sales are expected to increase approximately 3%.
DICK'S SPORTING GOODS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
13 Weeks Ended
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May 1, May 3,
2004 2003
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Net sales $364,207 $304,728
Cost of goods sold, including
occupancy and distribution costs 261,528 221,880
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GROSS PROFIT 102,679 82,848
Selling, general and administrative
expenses 82,167 68,802
Pre-opening expenses 2,742 2,456
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INCOME FROM OPERATIONS 17,770 11,590
Interest expense, net 642 506
Other income (1,000) -
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INCOME BEFORE INCOME TAXES 18,128 11,084
Provision for income taxes 7,251 4,434
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NET INCOME $10,877 $6,650
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EARNINGS PER COMMON SHARE:
Basic $0.23 $0.16
Diluted $0.21 $0.14
