Dick’s SG Raises FY Guidance on Robust Q1

For the first quarter ended April 30, 2011, the company reported consolidated net income of $37.5 million, or $0.30 per diluted share.

Net sales for the first quarter of 2012 increased by 15.1 percent to
$1.3 billion as compared to the first quarter of 2011 due primarily to
an 8.4 percent increase in consolidated same store sales and the growth
of the company's store network. The consolidated same store sales
increase consisted of a 7.3 percent increase at Dick's Sporting Goods
stores, a 12.6 percent increase at Golf Galaxy and a 33.4 percent
increase in the company's eCommerce business.

“We had an exceptionally strong first quarter as we generated record earnings with a 50 percent increase in earnings per share on 15 percent sales growth. We also maintained a healthy balance sheet while returning capital to stockholders through our dividend and share repurchase programs,” said Edward W. Stack, chairman and CEO. “For 2012, we are raising our full year guidance as we continue to invest in new stores and our eCommerce business as well as our margin accelerators including inventory management, private brands, and product mix shift.”

New Stores

In the first quarter, the company opened six Dick's Sporting Goods stores.

As of April 28, 2012, the company operated 486 Dick's Sporting Goods stores in 44 states, with approximately 26.5 million square feet and 81 Golf Galaxy stores in 30 states, with approximately 1.3 million square feet.

Balance Sheet

The company ended the first quarter of 2012 with $521 million in cash and cash equivalents and did not have any outstanding borrowings under its $500 million revolving credit facility.  At the end of the first quarter of 2011, the company had $533 million in cash and cash equivalents and did not have any outstanding borrowings under its credit facility.

Inventory per square foot was 6.6 percent higher at the end of the first quarter of 2012 as compared to the end of the first quarter of 2011.  

Share Repurchase Program

On January 11, 2012, the company's Board of Directors authorized a 12-month share repurchase program of up to $200 million of the company's common stock. The company initiated the program to offset the dilutive effect of the issuance of shares expected in connection with the expiration in 2013 of a substantial number of stock options issued following the company's 2002 initial public offering, which are anticipated to be exercised in 2012.

In the first quarter, the company repurchased 2.1 million shares of its common stock at an average cost of $49.39 per share, for a total cost of approximately $104 million.

The company completed the share repurchase program on May 14, 2012. In total, the company repurchased approximately 4.1 million shares of its common stock at an average cost of $49.33 per share, for a total cost of approximately $200 million. The company financed the repurchase program from cash on hand.

Dividend

On May 14, 2012, the company's Board of Directors authorized and declared a quarterly dividend in the amount of $0.125 per share on the company's common stock and Class B common stock. The dividend is payable in cash on June 29, 2012 to stockholders of record at the close of business on June 1, 2012.

Investment in JJB Sports

On April 27, 2012, the company closed on its previously announced 20 million pounds Sterling strategic investment in JJB Sports plc, a leading U.K. sports retailer.  Under the terms of the agreement, the company purchased 18.75 million pounds in junior secured convertible notes and 1.25 million pounds in ordinary shares of JJB Sports, for a total investment of approximately $32.0 million.

Current 2012 Outlook

The company's current outlook for 2012 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 2012 – (53-Week Year) Comparisons to Fiscal 2011 – (52-Week Year)

        Based on an estimated 126 million diluted shares outstanding, the company currently anticipates reporting consolidated earnings per diluted share of approximately $2.45 to 2.48, which includes approximately $0.03 per diluted share for the 53rd week. For the 52 weeks ended January 28, 2012, the company reported consolidated non-GAAP earnings per diluted share of $2.02, excluding a gain on sale of investment and the favorable impact of lower litigation settlement costs. On a GAAP basis, the company reported consolidated earnings per diluted share of $2.10 in 2011.

        Consolidated same store sales are currently expected to increase approximately 3 to 4 percent on a 52-week to 52-week comparative basis, compared to a 2.0 percent increase in fiscal 2011.

        The company currently expects to open approximately 40 new Dick's Sporting Goods stores and relocate five Dick's Sporting Goods stores in 2012. The company also expects to reposition two Golf Galaxy stores.

    Second Quarter 2012

        Based on an estimated 126 million diluted shares outstanding,the company currently anticipates reporting consolidated earnings per diluted share of approximately $0.62 to 0.63 in the second quarter of 2012.  In the second quarter of 2011, the company reported consolidated non-GAAP earnings per diluted share of $0.52, excluding a $0.07 per diluted share impact from a gain on sale of investment.   

        Consolidated same store sales are currently expected to increase approximately 2 to 3 percent in the second quarter of 2012 compared to a 2.5 percent increase in the second quarter of 2011.

        The company currently expects to open four Dick's Sporting Goods stores in the second quarter of 2012.

    Capital Expenditures

        In 2012, the company currently anticipates capital expenditures to be approximately $241 million on a gross basis and approximately $190 million on a net basis.

Purchase of the Store Support Center

On May 7, 2012 the company purchased its Store Support Center for approximately $133 million, including settlement costs.  This is a second-quarter event.