Dick's Sporting Goods Inc. reported fourth-quarter earnings rose 6.9 percent to $138.6 million, or $1.11 a share, exceeding a forecast given in November calling for earnings in the range of $1.04 to 1.07 per share. Consolidated same store sales for the fourth quarter increased 7.3 percent, adjusted for the shifted calendar. Shifted same store sales in the fourth quarter of 2013 for Dick's
Sporting Goods increased 7.9 percent while Golf Galaxy decreased 11.7
percent.

Highlights of the report include:

  • Consolidated earnings per diluted share increased 8 percent to $1.11 during the 13 weeks ended February 1, 2014 compared to consolidated earnings per diluted share of $1.03 during the 14 weeks ended February 2, 2013
  • Consolidated same store sales for the fourth quarter increased 7.3 percent, adjusted for the shifted calendar
  • Full year consolidated earnings per diluted share increased 6 percent to $2.69 during the 52 weeks ended February 1, 2014 compared to non-GAAP consolidated earnings per diluted share of $2.53 during the 53 weeks ended February 2, 2013

Fourth Quarter Results (13 weeks compared to 14 weeks last year)
The company reported consolidated net income of $138.6 million, or $1.11 per diluted share, for the 13 weeks ended February 1, 2014 compared to the company's expectations provided on November 19, 2013 of $1.04 to 1.07 per diluted share. For the 14 weeks ended February 2, 2013, the company reported consolidated net income of $129.7 million, or $1.03 per diluted share, including approximately 3 cents per diluted share for the 14th week.

Net sales for the 13 weeks ended February 1, 2014 increased 7.9 percent to $1.9 billion compared to the 14 weeks ended February 2, 2013, or 12.5 percent on a 13-week to 13-week basis. Adjusted for the shifted calendar, due to the 53rd week in 2012, consolidated same store sales increased 7.3 percent, compared to the company's guidance provided on November 19, 2013 of an approximate 3 to 4 percent increase. Fourth quarter 2012 consolidated same store sales increased 1.2 percent. Shifted same store sales in the fourth quarter of 2013 for Dick's Sporting Goods increased 7.9 percent while Golf Galaxy decreased 11.7 percent.

Unshifted consolidated same store sales for the fourth quarter increased 6.3 percent, compared to the company's guidance of an approximate 2 to 3 percent increase. Unshifted same store sales in the fourth quarter of 2013 for Dick's Sporting Goods increased 6.8 percent while Golf Galaxy decreased 9.4 percent. eCommerce penetration for the quarter was 12.2 percent of total sales.

“We generated strong results in our fourth quarter, with record earnings per share of $1.11, above the upper end of the guidance range we provided in our third quarter press release, as our sales and merchandise margin exceeded our expectations,” said Edward W. Stack, Chairman and Chief Executive Officer. “As we look to 2014, we believe our robust and growing omni-channel network and exciting merchandising opportunities will support double-digit growth in earnings.”

Store Development
In the fourth quarter, the company opened six new Dick's Sporting Goods stores, one new True Runner store and closed three underperforming Golf Galaxy stores. The company also remodeled one Dick's Sporting Goods store during the fourth quarter. As of February 1, 2014, the company operated 558 Dick's Sporting Goods stores in 46 states, with approximately 30.1 million square feet and 79 Golf Galaxy stores in 29 states, with approximately 1.4 million square feet.

Balance Sheet
The company ended fiscal 2013 with approximately $182 million in cash and cash equivalents as compared to $345 million at the end of fiscal 2012, and did not have any outstanding borrowings under its $500 million revolving credit facility. Over the course of the past twelve months, the company utilized capital to invest in omni-channel growth, remodel stores, repurchase shares and pay quarterly dividends.

Total inventory was 12.4 percent higher at the end of the fourth quarter of 2013 as compared to the end of the fourth quarter of 2012, and in-line with sales growth of 12.5 percent on a 13-week to 13-week basis.

Full Year Results (52 weeks compared to 53 weeks last year)
The company reported consolidated net income for the 52 weeks ended February 1, 2014 of $337.6 million, or $2.69 per diluted share. For the 53 weeks ended February 2, 2013, the company reported consolidated non-GAAP net income of $318.3 million, or $2.53 per diluted share, including approximately $0.03 per diluted share for the 53rd week. On a GAAP basis, the company reported consolidated net income of $290.7 million, or $2.31 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 Reconciliations.”

Net sales for the 52 weeks ended February 1, 2014 increased 6.5 percent from last year's 53 week period to $6.2 billion primarily due to the opening of new stores and a 1.9 percent increase in consolidated same store sales on a 52-week to 52-week comparable basis. On a 52-week to 52-week basis, net sales increased 7.8 percent. Same store sales for Dick's Sporting Goods increased 2.4 percent and for Golf Galaxy decreased 7.1 percent.  eCommerce penetration for the year was 7.9 percent of total sales.

Dividend
On February 14, 2014, 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 March 28, 2014 to stockholders of record at the close of business on March 7, 2014.

Share Repurchase Program
In the fourth quarter of 2013, the company repurchased approximately 2.6 million shares of its common stock at an average cost of $56.71 per share, for a total cost of $150.0 million.  In total for fiscal 2013, the company repurchased approximately 4.8 million shares of its common stock at an average price of $52.97 per share, for a total cost of $255.6 million.

Current 2014 Outlook
The company's current outlook for 2014 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 2014
Based on an estimated 124 million diluted shares outstanding, the company anticipates reporting consolidated earnings per diluted share of approximately $3.03 to 3.08. For the 52 weeks ended February 1, 2014, the company reported consolidated earnings per diluted share of $2.69.
Consolidated same store sales are currently expected to increase approximately 3 to 4 percent, compared to a 1.9 percent increase in fiscal 2013.
The company expects to open approximately 50 Dick's Sporting Goods stores, relocate six Dick's Sporting Goods stores, and remodel five Dick's Sporting Goods stores in 2014. The company also expects to open approximately eight Field & Stream stores, relocate two Golf Galaxy stores, and open one Golf Galaxy store in 2014.

First Quarter 2014  
Based on an estimated 124 million diluted shares outstanding, the company currently anticipates reporting consolidated earnings per diluted share of approximately $0.51 to 0.53 in the first quarter of 2014, compared to non-GAAP consolidated earnings per diluted share of $0.48 in the first quarter of 2013 excluding the partial recovery of a previously impaired asset. On a GAAP basis, the company reported consolidated earnings per diluted share of $0.52 in the first quarter of 2013.

Consolidated same store sales are currently expected to increase 3 to 4 percent in the first quarter of 2014, compared to a 3.8 percent decrease in the first quarter of 2013, adjusted for the shifted retail calendar due to the 53rd week in 2012.

The company expects to open approximately eight Dick's Sporting Goods stores, relocate one Dick's Sporting Goods store, and relocate one Golf Galaxy store in the first quarter of 2014.

Capital Expenditures
In 2014, the company anticipates capital expenditures to be approximately $360 million on a gross basis and approximately $265 million on a net basis.