Dick's Sporting Goods, Inc. net income increased 57% to $12.2 million and earnings per diluted share increased 43% to 10 cents, compared to prior year net income of $7.8 million, or seven cents per diluted share.
Earnings guidance provided on August 21, 2007 was for earnings per diluted share of $0.05 – 0.06. The operating results of Golf Galaxy are included in the current period results.
Net sales for the quarter increased 18% to $838.8 million due to the opening of new stores and the inclusion of Golf Galaxy in this years' quarterly results, partially offset by a comparable store sales decrease of 2.5% (or a decrease of 1.0% adjusting for the shifted retail calendar). Comparable store sales at Dick's stores were in- line with our guidance and compared to an 8.9% increase in Q3 last year. Comparable store sales for Golf Galaxy on a proforma basis decreased 2.7%, or increased 4.7% after adjusting for the shifted retail calendar.
“Our performance this quarter demonstrates once again how our emphasis on execution, combined with the strength of our business model delivers consistent financial performance. Improved margins, greater efficiencies, the strength of our golf business and strong cash flow continue to drive our earnings increases. As we head into our seasonally largest quarter, our inventory is on plan and our stores are well positioned to deliver solid results,” said Edward W. Stack, Chairman and CEO.
In the third quarter, Dick's Sporting Goods opened 25 Dick's Sporting Goods stores.
Net income for the 39 weeks ended November 3, 2007 increased 82% to $81.9 million and earnings per diluted share increased 73% to $0.71, as compared to prior year net income of $44.9 million, or $0.41 per diluted share. The operating results of Golf Galaxy have been included in the results beginning with the February 13, 2007 date of acquisition.
Net sales increased 28% to $2,675.8 million due to a comparable store sales increase of 2.3% (or 1.7% adjusting for the shifted retail calendar, compared to a 7.7% increase year-to-date last year), the opening of new stores, and the inclusion of Golf Galaxy in this year's results. Comparable store sales for Golf Galaxy on a proforma basis increased 2.2%, or 2.8% after adjusting for the shifted retail calendar.
Current 2007 Outlook
Dick's Sporting Goods current outlook for 2007 includes:
-- Full Year 2007 - (52-Week Year) Comparisons to Fiscal 2006 -
-- We are currently increasing earnings guidance for the full year.
Based on an estimated 117 million diluted shares outstanding, the
Company is increasing its consolidated earnings per diluted share
guidance from the previous estimate of approximately $1.24 - 1.25 to
the new estimate of approximately $1.29. This new guidance
represents an approximate 26% increase over earnings per diluted
share for the full year 2006 of $1.02 and includes the expected
results of Golf Galaxy, which we continue to expect to be accretive
for the year.
-- Comparable store sales for Dick's Sporting Goods stores are expected
to increase approximately 2.0% compared to a 6.0% increase last
-- The Company has opened 46 new Dick's Sporting Goods stores and
relocated one Dick's Sporting Goods store, completing the new store
program for Dick's stores in 2007. The Company expects to open 16
new Golf Galaxy stores in 2007.
-- Fourth Quarter 2007 - (13 weeks compared to 14 weeks last year)
-- Based on an estimated 119 million diluted shares outstanding, the
Company anticipates consolidated earnings per diluted share of
approximately $0.59, as compared to $0.60 in 2006. The year-over-
year comparison is impacted by several factors, including the shift
in the 2007 retail calendar, which positively impacted Q1 and Q2
this year and is offset in Q3 and Q4. Additionally, the year-over-
year comparison is impacted by the 53rd week in fiscal 2006, which
provided an extra week of operations and included the favorable
impact of sales of licensed merchandise relating to the Super Bowl,
which combined contributed approximately $0.05 to our 2006 earnings.
Further, the inclusion of Golf Galaxy is approximately $0.04 per
share dilutive in the fourth quarter of 2007.
-- Comparable store sales for Dick's stores are expected to increase
approximately 2.0%, or approximately 2.5%, adjusting for the shifted
retail calendar which compares to a 2.0% increase in Q4 last year.
Golf Galaxy will be included in the quarterly comparable store base
beginning in Q2 2008, which will be the first full quarter following
the anniversary of the date of acquisition.
-- The Company expects to open four new Golf Galaxy stores.