Dick's Sporting Goods, Inc. fourth quarter net income increased 25% to $54.0 million and earnings per share increased 23% to $1.00, as compared to prior year net income of $43.3 million and earnings per share of 81 cents, excluding merger integration and store closing costs and gain on sale of investment. On a GAAP basis, net income increased 28% and earnings per share increased 27%, as compared to the prior year net income of $42.3 million and earnings per share of 79 cents.
Net sales for the quarter increased 8%, to $849.5 million. Comparable store sales increased 4.1%. The former Galyan's stores will be included in the comparable store base beginning in the second quarter of fiscal 2006.
No new stores were opened during the fourth quarter. During the year, the Company opened 26 stores, relocated four stores and closed five stores in connection with the Galyan's acquisition. As of January 28, 2006, the Company operated 255 stores, with approximately 14.7 million square feet, in 34 states.
For the full-year, net income, excluding merger integration and store closing costs and gain on sale of investment, increased 52% to $94.5 million, and earnings per share increased 50% to $1.75, as compared to prior year proforma, combined company net income of $62.1 million, and earnings per share of $1.17, excluding merger integration and store closing costs and gain on sale of investment.
Net income, including merger integration and store closing costs and gain on sale of investment, increased 29% to $73.0 million, and earnings per share increased 26% to $1.35 as compared to prior year proforma, combined company net income of $56.5 million, and earnings per share of $1.07, including merger integration and store closing costs and gain on sale of investment. On a GAAP basis, net income increased 6% to $73.0 million, and earnings per share increased 4% to $1.35, as compared to the prior year net income of $68.9 million and earnings per share of $1.30. The current year included higher merger integration and store closing costs and lower gains on sale of investment than the prior year.
Net sales for the year ended January 28, 2006 increased 24% to $2,625 million as compared to prior year GAAP net sales of $2,109 million. Comparable store sales increased 2.6%.
“2005 completes the most active 18 month period in our history. I could not be more proud of the effort extended by thousands of associates in completing the conversion of 44 former Galyan's stores while opening up 45 new stores in 18 months and, more importantly, executing within our existing store base. Meaningful comp store sales gains and earnings improvement signify that the Galyan's conversion is completed. We are well positioned to enter 2006, executing a plan of strong organic growth,” said Edward W. Stack, Chairman and CEO.
The Company's current outlook for 2006 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 2006 – (53-Week Year) Comparisons to Fiscal 2005 – (52-Week Year)
- Based on an estimated 55 million shares outstanding, the Company
anticipates reporting earnings per share of approximately $1.77 – 1.81
(which includes $0.27 of stock option expense per share). This
represents an approximate 20% increase over earnings per share for the
full year 2005 of $1.50 (which includes $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). - The earnings per share outlook includes the effect of the Company's
adoption of SFAS 123R as of January 29, 2006. During 2006, the Company
expects to incur approximately $25 million of stock option expense on a
pre-tax basis, or $0.27 per share after tax. - Comparable store sales are expected to increase approximately 3% on a
52-week to 52-week comparative basis. The converted Galyan's stores
will be included in the comparable store base beginning in the second
quarter of fiscal 2006. - The Company expects to open 40 new stores and relocate two stores in
2006.First Quarter 2006
- Based on an estimated 55 million shares outstanding, the Company
anticipates reporting earnings per share of $0.15 – 0.17 (which
includes $0.07 of stock option expense per share and $0.04 of store
relocation expense per share) as compared to first quarter 2005
earnings per share of $0.16 (which includes $0.06 of stock option
expense per share as if the Company expensed stock options, and
excludes merger integration and store closing costs). - Comparable store sales are expected to increase approximately 3-5%.
- The Company expects to open seven new stores and relocate two stores in
the first quarter.
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(Amounts in thousands, except per share data)
13 Weeks Ended Year Ended
---------------------- ----------------------
January 28, January 29, January 28, January 29,
2006 2005 2006 2005
----------- ---------- ----------- ----------
Net sales $849,506 $788,048 $2,624,987 $2,109,399
Cost of goods sold, including
occupancy and distribution
costs 591,708 561,695 1,887,347 1,522,873
-------- -------- ---------- ----------
GROSS PROFIT 257,798 226,353 737,640 586,526
Selling, general and
administrative expenses 164,040 150,912 556,320 443,776
Merger integration and store
closing costs - 12,543 37,790 20,336
Pre-opening expenses 521 350 10,781 11,545
-------- -------- ---------- ----------
INCOME FROM OPERATIONS 93,237 62,548 132,749 110,869
Gain on sale of investment - (10,981) (1,844) (10,981)
Interest expense, net 3,187 2,953 12,959 8,009
Other income - - - (1,000)
-------- -------- ---------- ----------
INCOME BEFORE INCOME TAXES 90,050 70,576 121,634 114,841
Provision for income taxes 36,020 28,231 48,654 45,936
-------- -------- ---------- ----------
NET INCOME $54,030 $42,345 $72,980 $68,905
======== ======== ========== ==========
EARNINGS PER COMMON SHARE:
Basic $1.08 $0.87 $1.47 $1.44
Diluted $1.00 $0.79 $1.35 $1.30
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic 50,213 48,645 49,792 47,978
Diluted 54,163 53,489 53,979 52,921
