Dick’s Sporting Goods, Inc. net income for the second quarter increased 25% to $25.7 million and earnings per share increased 24% to 47 cents, as compared to prior year proforma net income of $20.6 million, or 38 cents per share. Earnings guidance provided on May 16, 2006 was for earnings per share of 43 cents to 44 cents.
On a GAAP basis, net income increased to $25.7 million and earnings per share increased to $0.47, as compared to prior year net income of $22.1 million, or $0.41 per share which included $5.3 million pre-tax of merger integration costs and a $1.8 million pre-tax gain on sale of investment.
Net sales for the quarter increased 18% to $734.0 million while comparable store sales increased 6.5%. The former Galyan’s stores are included in the second quarter comparable store sales calculation.
“I am pleased with the strong results for the second quarter and I am excited about our position as we enter the second half of the year. We are clearly gaining market share as legacy stores, former Galyan’s stores and new stores all performed well during the quarter,” said Edward W. Stack, Chairman and CEO.
In the second quarter, the Company opened five stores, one each in Atlanta, GA; Melbourne, FL; Winston-Salem, NC; Cedar Rapids, IA and Nashville, TN.
As of July 29, 2006, the Company operated 268 stores, with approximately 15.5 million square feet, in 34 states.
Year-to-Date Results
Net income for the 26 weeks ended July 29, 2006 increased 26% to $37.1 million and earnings per share increased 24% to $0.68, as compared to prior year proforma net income of $29.4 million, or $0.55 per share (which has been adjusted for $0.13 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).
On a GAAP basis, net income increased to $37.1 million and earnings per share increased to $0.68, as compared to prior year net income of $14.8 million, or $0.27 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 increased 16% to $1,380 million while comparable store sales increased 6.9%. 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.
2006 Outlook
- Full Year 2006 Comparisons to Fiscal 2005
- We are increasing earnings guidance for the full year as a result of
our second quarter performance. Based on an estimated 55 million
shares outstanding, the Company is increasing earnings guidance from
the previous guidance of approximately $1.81 - 1.85 to the new
guidance of approximately $1.84 - 1.88 per share (which includes $0.27
of stock option expense per share). This represents an approximate
24% 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).
- Comparable store sales are expected to increase approximately 4% on a
52-week to 52-week comparative basis.
- The Company expects to open approximately 40 new stores in 2006. Two
stores were relocated in the first quarter of 2006.
- Third Quarter 2006
- Based on an estimated 55 million shares outstanding, the Company is
providing earnings guidance of approximately $0.03 - 0.04 per share
(which includes $0.07 of stock option expense per share). This
represents an increase over third quarter 2005 proforma earnings per
share of $0.02 (which has been adjusted for $0.06 of stock option
expense per share as if the Company expensed stock options).
- Comparable store sales are expected to increase approximately 3 - 4%.
- The Company expects to open approximately 27 new stores in the third
quarter.
DICK's SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
13 Weeks Ended 26 Weeks Ended
--------------------------------------------
July 29, July 30, July 29, July 30,
2006 2005 2006 2005
---------- --------- ----------- -----------
Net sales $734,047 $621,972 $1,379,545 $1,192,815
Cost of goods sold, including
occupancy and distribution
costs 526,650 447,556 994,482 866,427
---------- --------- ----------- -----------
GROSS PROFIT 207,397 174,416 385,063 326,388
Selling, general and
administrative expenses 159,239 129,449 311,474 255,718
Pre-opening expenses 2,451 1,592 6,604 4,237
Merger integration and store
closing costs - 5,309 - 37,790
---------- --------- ----------- -----------
INCOME FROM OPERATIONS 45,707 38,066 66,985 28,643
Gain on sale of investment - (1,844) - (1,844)
Interest expense, net 2,906 3,079 5,155 5,875
---------- --------- ----------- -----------
INCOME BEFORE INCOME TAXES 42,801 36,831 61,830 24,612
Provision for income taxes 17,120 14,733 24,732 9,845
---------- --------- ----------- -----------
NET INCOME $25,681 $22,098 $37,098 $14,767
========== ========= =========== ===========
EARNINGS PER COMMON SHARE:
Basic $0.51 $0.44 $0.73 $0.30
Diluted $0.47 $0.41 $0.68 $0.27
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic 50,746 49,750 50,583 49,418
Diluted 54,887 54,115 54,742 53,902
