Dick's Sporting Goods, Inc. reported net income more than doubled in the first quarter ended May 1, to $26.2 million, or 22 a share, from $10.2 million, or 9 cents, a year ago. Earnings were well above previous guidance of 12 cents to 13 cents a share.
For the first quarter ended May 2, 2009, the company reported consolidated non-GAAP net income of $12.8 million, or $0.11 per diluted share. Non-GAAP earnings exclude merger and integration costs.
Net sales for the first quarter of 2010 increased by 9.2% to $1.0 billion due primarily to an 8.2% increase in consolidated comparable store sales and the opening of new stores. The 8.2% consolidated same store sales increase consisted of a 7.6% increase in Dick's Sporting Goods stores, a 12.4% increase in Golf Galaxy stores and a 15.2% increase in e-commerce.
The company raised its FY10 guidance to from $1.32 to 1.35 per diluted share to $1.41 to 1.44.
“In the first quarter, we grew earnings through higher sales and improved margins, increased our cash position by $161 million, and effectively managed our inventory levels,” said Edward W. Stack, chairman and CEO. “At the same time, we continued to invest in the future growth of our business through the opening of new Dick's Sporting Goods stores, investing in technology and ramping up marketing initiatives geared towards driving market share gains.”
New Stores
In the first quarter, the company opened five 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 May 1, 2010, the company operated 424 Dick's Sporting Goods stores in 41 states, with approximately 23.6 million square feet and 91 Golf Galaxy stores in 31 states, with approximately 1.5 million square feet.
Balance Sheet
The company ended the first quarter of 2010 with $207 million in cash and cash equivalents and did not have any outstanding borrowings under its $440 million Credit Agreement. At the end of the first quarter of 2009, the company had $46 million in cash and cash equivalents and $116 million of outstanding borrowings under its Credit Agreement.
The inventory per square foot was 0.8% less at the end of the first quarter 2010 as compared to the end of the first quarter 2009.
Current 2010 Outlook
Full Year 2010
- Based on an estimated 121 million diluted shares outstanding, the company currently anticipates reporting consolidated earnings per diluted share of approximately $1.41 – 1.44. For the full year 2009, the company reported consolidated non-GAAP earnings per diluted share of $1.20, excluding merger and integration costs. On a GAAP basis, the Company reported consolidated earnings per diluted share of $1.15 in 2009.
- Comparable store sales are expected to increase approximately 3 to 4% compared to a 1.4% decrease in 2009. The comparable store sales calculation for the full year 2010 includes Dick's Sporting Goods stores, Golf Galaxy and the e-commerce business.
- The company currently expects to open at least 24 new Dick's Sporting Goods stores, relocate two Dick's Sporting Goods stores, open approximately five new Golf Galaxy stores and remodel approximately 11 Dick's Sporting Goods stores.
Second Quarter 2010
- Based on an estimated 121 million diluted shares outstanding, the company anticipates reporting consolidated earnings per diluted share of approximately $0.37 – 0.39 in the second quarter of 2010. In the second quarter of 2009, the company reported non-GAAP earnings per diluted share of $0.36, excluding merger and integration costs. On a GAAP basis, the company reported consolidated earnings per diluted share of $0.33 in the second quarter of 2009.
- Comparable store sales are expected to increase approximately 4 to 5% compared to a 4.1% decrease in the second quarter last year. The comparable store sales calculation for the second quarter of 2009 included Dick's Sporting Goods stores and Golf Galaxy stores. The comparable store sales calculation for the second quarter of 2010 includes Dick's Sporting Goods stores, Golf Galaxy and the company's e-commerce business.
- The company expects to open approximately one new Dick's Sporting Goods store and remodel three Dick's Sporting Goods stores in the second quarter.
Capital Expenditures
- In 2010, the company anticipates capital expenditures to be $175 million on a gross basis and approximately $145 million on a net basis.
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DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED |
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(In thousands, except per share data) |
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13 Weeks Ended |
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May 1, |
% of |
May 2, |
% of |
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Net sales |
$ 1,047,531 |
100.00% |
$ 959,662 |
100.00% |
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Cost of goods sold, including occupancy |
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and distribution costs |
745,311 |
71.15 |
709,239 |
73.91 |
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GROSS PROFIT |
302,220 |
28.85 |
250,423 |
26.09 |
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Selling, general and administrative expenses |
253,149 |
24.17 |
226,123 |
23.56 |
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Merger and integration costs |
– |
– |
4,354 |
0.45 |
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Pre-opening expenses |
2,079 |
0.20 |
3,029 |
0.32 |
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INCOME FROM OPERATIONS |
46,992 |
4.49 |
16,917 |
1.76 |
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Interest expense |
3,508 |
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