Dick's generates higher than anticipated sales

24 Aug '09

4 min read

Dick's Sporting Goods, Inc. reported sales and earnings results for the second quarter ended August 1, 2009.

Second Quarter Results
The Company reported consolidated non-GAAP net income for the second quarter ended August 1, 2009 of $42.4 million, or $0.36 per diluted share. The second quarter earnings per diluted share exceeded estimated earnings expectations provided on May 19, 2009 of $0.28 - 0.31 per diluted share. For the second quarter ended August 2, 2008, the Company reported consolidated non-GAAP net income of $44.3 million, or $0.38 per diluted share. Non-GAAP earnings exclude merger and integration costs.

On a GAAP basis, the Company reported consolidated net income for the second quarter ended August 1, 2009 of $38.9 million, or $0.33 per diluted share, compared to $39.9 million, or $0.34 per diluted share for the second quarter of 2008. The GAAP to non-GAAP reconciliation is included in a table later in the release under the heading "Non-GAAP Net Income and Earnings Per Share Reconciliation."

Net sales for the second quarter of 2009 increased by 3.7% to $1,126.8 million due primarily to the opening of new stores and the addition of e-commerce sales, partially offset by a 4.1% decrease in comparable store sales. The 4.1% consolidated same store sales decline consisted of a 3.2% decrease in Dick's Sporting Goods stores and an 11.1% decline in the Golf Galaxy stores.

"In the second quarter, we generated higher than anticipated sales, continued to effectively manage inventory, and leveraged operating expenses. As a result, we generated higher earnings from our Dick's Sporting Goods stores this year compared to the same quarter last year, in spite of the challenging economic environment," said Edward W. Stack, Chairman and CEO. "In addition, with higher sales and better than anticipated operating leverage, Golf Galaxy performed better than originally expected."

New Stores
In the second quarter, the Company opened four Dick's Sporting Goods stores and converted the remaining Chick's Sporting Goods stores to Dick's Sporting Goods stores. The new stores are listed in a table later in the release under the heading "Store Count and Square Footage."

In the first two quarters of 2009, the Company has opened 13 new Dick's Sporting Goods stores, opened one new Golf Galaxy store, converted the Golf Shop to a Golf Galaxy store, closed two Chick's Sporting Goods stores and converted the remaining Chick's Sporting Goods stores to Dick's Sporting Goods stores.

As of August 1, 2009, the Company operated 409 Dick's Sporting Goods stores in 40 states, with approximately 22.7 million square feet and 91 Golf Galaxy stores in 31 states, with approximately 1.5 million square feet.

Balance Sheet
Long term debt declined by $159.0 million from the end of the second quarter of 2008 to the end of the second quarter of 2009 due to the repayment of $172.5 million for the Company's senior convertible notes in the first quarter of this year.The inventory per square foot was 5.5% less at the end of the second quarter 2009 as compared to the end of the second quarter 2008.

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