Dick's Sporting Goods, Inc. net income for the fourth quarter ended February 3, 2007 increased 33% to $67.7 million and earnings per share increased 28% to $1.20, as compared to prior year 13 week proforma net income of $50.7 million, or 94 cents per share. Earnings guidance provided on November 13, 2006 was for earnings per share of approximately $1.13 – 1.16.
On a GAAP basis, net income increased to $67.7 million and earnings per share increased to $1.20, as compared to prior year net income (excluding stock option expense) of $54.0 million, or $1.00 per share.
Net sales for the quarter increased 21% to $1.026 billion while comparable store sales increased 2.0% on a 13-week to 13-week comparable basis. The former Galyan's stores are included in the fourth quarter comparable store sales calculation. Comparable store sales guidance provided on November 13, 2006 was for an increase of approximately 2 – 3% on a 13-week to 13-week comparable basis.
“The fourth quarter was our first billion dollar sales quarter, a special milestone. More importantly, we executed well through our most important quarter, delivering earnings in excess of our guidance. I'd like to commend all of the Dick's Sporting Goods associates for their consistent efforts which are the backbone of our strong earnings results,” said Edward W. Stack, Chairman and CEO.
Net income for the 53 weeks ended February 3, 2007 increased 39% to $112.6 million and earnings per share increased 35% to $2.03, as compared to prior year 52 week proforma net income of $81.1 million, or $1.50 per share (which has been adjusted for $0.25 of stock option expense per share as if the Company expensed stock options, and excludes merger integration and store closing costs and gain on sale of investment). Earnings guidance provided on November 13, 2006 was for earnings per share of approximately $1.95 – 1.98.
On a GAAP basis, net income increased to $112.6 million and earnings per share increased to $2.03, as compared to prior year net income of $73.0 million, or $1.35 per share which included $37.8 million pre-tax of merger integration costs and a $1.8 million pre-tax gain on sale of investment.
Net sales for the 53 weeks increased 19% to $3,114.2 million while comparable store sales increased 6.0% on a 52-week to 52-week comparable basis. The former Galyan's stores are not included in the year-to-date comparable store sales calculation as they were not in the comp store base at the beginning of 2006.
On February 13, 2007, Dick's completed its acquisition of Golf Galaxy, Inc. Under the terms of the agreement, each outstanding share of Golf Galaxy common stock has been converted into the right to receive $18.82 per share in cash, without interest, valuing the transaction at approximately $226 million. “We are happy to have joined forces with another best in class retailer. The golf enthusiast will benefit from this new union,” said Edward W. Stack, Chairman and CEO.
The Company's current outlook for 2007 is based on current expectations and includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act as described later in this release. Although the Company believes that comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
-- Full Year 2007 - (52 - Week Year) Comparisons to Fiscal 2006 - (53 -
Week Year)
-- Based on an estimated 58 million shares outstanding, the Company
anticipates reporting earnings per share of approximately $2.37 -
2.40. This represents an approximate 18% increase over earnings per
share for the full year 2006 of $2.03 and includes the expected
results of Golf Galaxy.
-- Comparable store sales are expected to increase approximately 2% at
Dick's Sporting Goods stores.
-- The Company expects to open 45 new Dick's stores, 17 new Golf Galaxy
stores and relocate one Dick's store in 2007.
-- First Quarter 2007
-- Based on an estimated 57 million shares outstanding, the Company
anticipates reporting earnings per share of $0.35 - 0.38 as compared
to first quarter 2006 earnings per share of $0.21.
-- Comparable store sales at Dick's Sporting Goods stores are expected
to increase approximately 4 - 6%, or approximately 3%, adjusting for
the shifted calendar due to the 53rd week in 2006.
-- The Company expects to open 11 new Dick's stores and 10 new Golf
Galaxy stores in the first quarter.
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
14 Weeks 13 Weeks 53 Weeks 52 Weeks
Ended Ended Ended Ended
----------- ----------- ----------- -----------
February 3, January 28, February 3, January 28,
2007 2006 2007 2006
----------- ----------- ----------- -----------
Net sales $1,026,275 $849,506 $3,114,162 $2,624,987
Cost of goods sold,
including occupancy
and distribution costs 705,973 591,708 2,217,463 1,887,347
----------- ----------- ----------- -----------
GROSS PROFIT 320,302 257,798 896,699 737,640
Selling, general and
administrative expenses 203,759 164,040 682,625 556,320
Pre-opening expenses 1,427 521 16,364 10,781
Merger integration and
store closing costs - - - 37,790
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 115,116 93,237 197,710 132,749
Gain on sale of investment - - - (1,844)
Interest expense, net 2,253 3,187 10,025 12,959
----------- ----------- ----------- -----------
INCOME BEFORE INCOME
TAXES 112,863 90,050 187,685 121,634
Provision for income taxes 45,145 36,020 75,074 48,654
----------- ----------- ----------- -----------
NET INCOME $67,718 $54,030 $112,611 $72,980
=========== =========== =========== ===========
EARNINGS PER COMMON SHARE:
Basic $1.29 $1.08 $2.20 $1.47
Diluted $1.20 $1.00 $2.03 $1.35
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 52,491 50,213 51,256 49,792
Diluted 56,565 54,163 55,395 53,979
