Dick's Sporting exceeds earnings guidance
Dick's Sporting Goods Inc reported sales and earnings results for the second quarter ended August 2, 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.
Second Quarter Results:
The Company reported net income for the second quarter ended August 2, 2008 of $45.5 million, or $0.39 per diluted share, excluding the impact of costs related to the Golf Galaxy integration. These results exceeded earnings guidance provided on May 22, 2008 of $0.34 - 0.38 per diluted share. For the second quarter ended August 4, 2007, net income and earnings per diluted share were $47.9 million and $0.41, respectively.
Including the after-tax impact of costs related to the Golf Galaxy integration of $4.4 million, or $0.04 per diluted share, the Company reported net income for the second quarter ended August 2, 2008 of $41.1 million, or $0.35 per diluted share.
Net sales for the quarter increased 7% to $1,086.3 million due to the opening of new stores, the inclusion of Chick's Sporting Goods in this year's quarterly results and a 3.7% decrease in comparable store sales. The 3.7% consolidated same store sales decline consisted of a 3.7% decrease in Dick's Sporting Goods stores and a 4.5% 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 deliver results that exceeded our guidance. We have demonstrated that our culture of financial discipline and emphasis on execution is evident even in these difficult times," said Edward W. Stack, Chairman, CEO and President. "We remain focused on all aspects of our business as we continue to grow our store base, effectively manage inventory and control expenses."
Golf Galaxy Integration:
By the end of this fiscal year, the Company expects to integrate Golf Galaxy's operations. Costs related to the integration are expected to be approximately $11.3 million, which includes $8.7 million of pre-tax costs and $2.6 million for income taxes reflecting the impact of non deductible executive separation costs.
Of the approximately $11.3 million, $5.5 million was incurred in the second quarter and the Company estimates $2.5 million and $3.3 million will be incurred in the third and fourth quarters of 2008, respectively.
Merger and integration costs include the expense of severance, retention, office closure and related taxes.
In the second quarter, the Company opened nine Dick's Sporting Goods stores and one Golf Galaxy store.
The Company reported net income for the 26 weeks ended August 2, 2008 of $64.9 million, or $0.55 per diluted share, excluding the proceeds from the sale of the corporate aircraft and costs associated with the integration of Golf Galaxy.
For the 26 weeks ended August 4, 2007, net income and earnings per diluted share were $69.6 million and $0.61, respectively.