Dick's Sporting reports 10.2% growth in sales in Q3
Dick's Sporting Goods Inc., reported sales and earnings results for the third quarter ended November 1, 2008. The results include the operating results of Golf Galaxy and Chick's Sporting Goods from their respective acquisition dates of February 13, 2007 and November 30, 2007.
Third Quarter Results
The Company reported net income for the third quarter ended November 1, 2008 of $9.2 million, or $0.08 per diluted share, excluding the impact of costs related to the Golf Galaxy integration. These results include a benefit to the Company's earnings of approximately $0.01 per diluted share from a tax settlement. The third quarter earnings per diluted share are in line with earnings guidance provided on August 21, 2008 of $0.04 - 0.08 per diluted share. For the third quarter ended November 3, 2007, net income and earnings per diluted share were $12.2 million and $0.10, respectively.
Including the pre-tax impact of costs related to the Golf Galaxy integration of $3.1 million, or $0.02 per diluted share, the Company reported net income for the third quarter ended November 1, 2008 of $7.4 million, or $0.06 per diluted share.
Net sales for the quarter increased 10.2% to $924.2 million due to the opening of new stores, the inclusion of Chick's Sporting Goods in this year's quarterly results and a 2.8% decrease in comparable store sales. The 2.8% consolidated same store sales decline consisted of a 2.5% decrease in Dick's Sporting Goods stores and a 7.4% decline in the Golf Galaxy stores. Chick's Sporting Goods was acquired on November 30, 2007 and is excluded from the comparable store sales calculation.
"We are pleased to generate results in line with our expectations, particularly in light of the current environment," said Edward W. Stack, Chairman, CEO and President. "In these difficult times, we are carefully growing the business, successfully managing inventory and enforcing strict expense controls."
Golf Galaxy Integration
By the end of this fiscal year, the Company expects to integrate Golf Galaxy's operations. Costs related to the integration were $3.1 million in the third quarter. The Company estimates $4.0 million will be incurred in the fourth quarter of 2008. Merger and integration costs include the expense of severance, retention, office closure and related taxes.
The Pro-forma to GAAP reconciliation is included in a table later in the release under the heading "Pro-forma Net Income and Pro-forma Earnings Per Share Reconciliation."
In the third quarter, the Company opened 26 Dick's Sporting Goods stores and one Golf Galaxy store. The stores that opened in the third quarter are listed in a table later in the release under the heading "Store Count and Square Footage." The Company also converted one Chick's Sporting Goods store.
The Company reported net income for the 39 weeks ended November 1, 2008 of $75.5 million, or $0.64 per diluted share, excluding the costs associated with the integration of Golf Galaxy. For the 39 weeks ended November 3, 2007, net income and earnings per diluted share were $81.9 million and $0.71, respectively. The Pro-forma to GAAP reconciliation is included in a table later in the release under the heading "Pro-forma Net Income and Pro-forma Earnings Per Share Reconciliation."