Dick's Sporting Goods, Inc. first quarter net income increased 30% to $11.4 million and earnings per share increased 31% to 21 cents, as compared to prior year proforma net income of $8.8 million, or 16 cents per share (which has been adjusted for $0.06 of stock option expense per share as if the Company expensed stock options, and excludes merger integration and store closing costs). Earnings guidance provided on March 7, 2006 was for earnings per share of 15 cents – 17 cents.
On a GAAP basis, net income increased to $11.4 million and earnings per share increased to $0.21, as compared to the prior year net loss of $(7.3) million, or $(0.15) per share which included $32.5 million pre-tax of merger integration costs.
Net sales for the quarter increased 13% to $645.5 million. Comparable store sales increased 6.5%. The increase in comparable store sales is due to increases in a majority of the Company's merchandise categories including licensed merchandise which is mainly related to the Pittsburgh Steelers Super Bowl win, and accounted for approximately 2% of the comp sales gain. The former Galyan's stores will be included in the comparable store base beginning in the second quarter of 2006.
“We are pleased to report such strong results for the quarter. Business was robust across most categories including our lodge business, which continues to benefit from an initiative started almost two years ago. This category continues to produce positive comp sales in a difficult environment. Additionally, the former Galyan's stores performed well against the anniversary of their re-grand opening last year,” said Edward W. Stack, Chairman and CEO.
In the first quarter, the Company opened eight stores, one each in Cleveland, OH; Long Island, NY; Augusta, ME; Chicago, IL; Minneapolis, MN; Virginia Beach, VA; Boston, MA and Rockaway, NJ.
The Company also relocated two stores, one each in Milford, CT which was a relocation of the Orange, CT store and Dulles, VA which was a relocation of the Sterling, VA store.
As of April 29, 2006, the Company operated 263 stores, with approximately 15.2 million square feet, in 34 states.
2006 Outlook
-
Full Year 2006 Comparisons to Fiscal 2005
- The Company is increasing earnings guidance for the full year as a
result of our first quarter performance. Based on an estimated
55 million shares outstanding, the Company is increasing
earnings guidance from the previous guidance of $1.77 – 1.81 to
the new guidance of approximately $1.81 – 1.85 per share (which
includes $0.27 of stock option expense per share). This
represents an approximate 22% increase over fiscal 2005
proforma earnings per share of $1.50 (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). - 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 Company expects to open 40 new stores in 2006. Two stores
were relocated in the first quarter of 2006.Second Quarter 2006
- Based on an estimated 55 million shares outstanding, the
Company is providing earnings guidance of $0.43 – 0.44 per
share (which includes $0.07 of stock option expense per share).
This represents an approximate 14% increase over second quarter
2005 proforma earnings per share of $0.38 (which has been
adjusted for $0.07 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). - Comparable store sales are expected to increase approximately
3-4%. - The Company expects to open five new stores in the second
quarter.
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
13 Weeks Ended
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April 29, April 30,
2006 2005
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Net sales $645,498 $570,843
Cost of goods sold, including
occupancy and distribution costs 467,833 418,871
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GROSS PROFIT 177,665 151,972
Selling, general and administrative
expenses 152,235 126,269
Pre-opening expenses 4,151 2,645
Merger integration and store closing
costs - 32,481
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INCOME (LOSS) FROM OPERATIONS 21,279 (9,423)
Interest expense, net 2,249 2,795
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INCOME (LOSS) BEFORE INCOME TAXES 19,030 (12,218)
Provision (benefit) for income taxes 7,612 (4,887)
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NET INCOME (LOSS) $11,418 $(7,331)
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EARNINGS (LOSS) PER COMMON SHARE:
Basic $0.23 $(0.15)
Diluted $0.21 $(0.15)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic 50,419 49,054
Diluted 54,596 49,054
