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Dick's Sporting reports 10.2% growth in sales in Q3
21 Nov '08
6 min read
Including the integration costs related to Golf Galaxy, which totals $6.2 million, or $0.05 per diluted share, the Company reported net income for the 39 weeks ended November 1, 2008 of $69.3 million, or $0.59 per diluted share.
Net sales increased 9% to $2,922.6 million primarily due to the opening of new stores, the inclusion of Chick's Sporting Goods in this year's results and a comparable store sales decrease of 3.7%. Year-to-date comparable store sales exclude Golf Galaxy and Chick's Sporting Goods.
Balance Sheet
At the end of the third quarter, inventory per square foot was 4.4% less than in 2007 on a pro-forma consolidated basis and 5.3% less per square foot for Dick's Sporting Goods stores only. The Company ended the quarter with approximately $185 million in outstanding borrowings on its $350 million line of credit and expects to end fiscal 2008 with no outstanding borrowings on the revolving credit facility.
The Company has also amended its credit agreement to exercise the accordion feature and increase the aggregate revolving loan commitments by $90 million to a total of $440 million, under the same terms and conditions.
Current 2008 Outlook
Considering current business trends, the uncertainty in the overall economic environment and the unpredictability of consumer behavior approaching the holiday season, the Company is lowering its guidance for the year and the fourth quarter.
The Company's current outlook for 2008 is based on current expectations and includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act as described later in this release. Although the Company believes that comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
-- Full Year 2008
-- Based on an estimated 117 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share of approximately $1.13 - 1.20, excluding costs from the Golf Galaxy integration. The Company anticipates reporting earnings per diluted share of approximately $1.06 - 1.13, including the integration costs. Earnings per diluted share for the full year 2007 were $1.33.
-- Comparable store sales, which include Dick's Sporting Goods stores only, are expected to decrease approximately 5 to 4%. The comparable store sales calculation for the full year excludes the Golf Galaxy and Chick's Sporting Goods stores.
-- The Company has opened 43 new Dick's Sporting Goods stores, relocated one Dick's Sporting Goods store and converted one Chick's Sporting Goods store to a Dick's Sporting Goods store, completing the new store program for Dick's Sporting Goods stores in 2008. The Company expects to open ten new Golf Galaxy stores in 2008.
-- Fourth Quarter 2008
-- Based on an estimated 117 million diluted shares outstanding, the Company anticipates reporting consolidated earnings per diluted share of approximately $0.49 - 0.56, excluding costs from the Golf Galaxy integration. The Company anticipates reporting earnings per diluted share of approximately $0.47 - 0.54, including the Golf Galaxy integration costs. Earnings per diluted share for the fourth quarter of 2007 were $0.62.
-- Comparable store sales are expected to decrease approximately 10 to 6%, which compares to a 3.4% increase in the fourth quarter last year, as adjusted for the shifted retail calendar. The comparable store sales calculation for the fourth quarter includes Golf Galaxy stores and excludes the Chick's Sporting Goods stores.
-- The Company expects to open four new Golf Galaxy Stores.
Net sales increased 9% to $2,922.6 million primarily due to the opening of new stores, the inclusion of Chick's Sporting Goods in this year's results and a comparable store sales decrease of 3.7%. Year-to-date comparable store sales exclude Golf Galaxy and Chick's Sporting Goods.
Balance Sheet
At the end of the third quarter, inventory per square foot was 4.4% less than in 2007 on a pro-forma consolidated basis and 5.3% less per square foot for Dick's Sporting Goods stores only. The Company ended the quarter with approximately $185 million in outstanding borrowings on its $350 million line of credit and expects to end fiscal 2008 with no outstanding borrowings on the revolving credit facility.
The Company has also amended its credit agreement to exercise the accordion feature and increase the aggregate revolving loan commitments by $90 million to a total of $440 million, under the same terms and conditions.
Current 2008 Outlook
Considering current business trends, the uncertainty in the overall economic environment and the unpredictability of consumer behavior approaching the holiday season, the Company is lowering its guidance for the year and the fourth quarter.
The Company's current outlook for 2008 is based on current expectations and includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act as described later in this release. Although the Company believes that comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
-- Full Year 2008
-- Based on an estimated 117 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share of approximately $1.13 - 1.20, excluding costs from the Golf Galaxy integration. The Company anticipates reporting earnings per diluted share of approximately $1.06 - 1.13, including the integration costs. Earnings per diluted share for the full year 2007 were $1.33.
-- Comparable store sales, which include Dick's Sporting Goods stores only, are expected to decrease approximately 5 to 4%. The comparable store sales calculation for the full year excludes the Golf Galaxy and Chick's Sporting Goods stores.
-- The Company has opened 43 new Dick's Sporting Goods stores, relocated one Dick's Sporting Goods store and converted one Chick's Sporting Goods store to a Dick's Sporting Goods store, completing the new store program for Dick's Sporting Goods stores in 2008. The Company expects to open ten new Golf Galaxy stores in 2008.
-- Fourth Quarter 2008
-- Based on an estimated 117 million diluted shares outstanding, the Company anticipates reporting consolidated earnings per diluted share of approximately $0.49 - 0.56, excluding costs from the Golf Galaxy integration. The Company anticipates reporting earnings per diluted share of approximately $0.47 - 0.54, including the Golf Galaxy integration costs. Earnings per diluted share for the fourth quarter of 2007 were $0.62.
-- Comparable store sales are expected to decrease approximately 10 to 6%, which compares to a 3.4% increase in the fourth quarter last year, as adjusted for the shifted retail calendar. The comparable store sales calculation for the fourth quarter includes Golf Galaxy stores and excludes the Chick's Sporting Goods stores.
-- The Company expects to open four new Golf Galaxy Stores.
Dick's Sporting Goods Inc
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