DKS
$60.28
Dick's Sporting Goods
($1.15)
(1.87%)
Earnings Details
3rd Quarter October 2016
Tuesday, November 15, 2016 7:30:00 AM
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Summary

Dick's Sporting Goods Beats but Guides Lower

Dick's Sporting Goods (DKS) reported 3rd Quarter October 2016 earnings of $0.48 per share on revenue of $1.8 billion. The consensus earnings estimate was $0.42 per share on revenue of $1.8 billion. The Earnings Whisper number was $0.43 per share. Revenue grew 10.2% on a year-over-year basis.

The company said it expects fourth quarter earnings of $1.15 to $1.27 per share. The current consensus earnings estimate is $1.32 per share for the quarter ending January 31, 2017.

Dick' Sporting Goods, Inc., is an authentic full-line sporting goods retailer offering a assortment of brand name sporting goods equipment, apparel, and footwear in a specialty store environment.

Results
Reported Earnings
$0.48
Earnings Whisper
$0.43
Consensus Estimate
$0.42
Reported Revenue
$1.81 Bil
Revenue Estimate
$1.77 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

DICK’S Sporting Goods Reports Third Quarter Results; Exceeds Earnings Expectations and Raises Full Year Guidance

DICK’S Sporting Goods, Inc. (DKS), the largest U.S. based full-line omni-channel sporting goods retailer, today reported sales and earnings results for the third quarter ended October 29, 2016.

Third Quarter Results

The Company reported consolidated net income for the third quarter ended October 29, 2016 of $48.9 million, or $0.44 per diluted share. For the third quarter ended October 31, 2015, the Company reported consolidated net income of $47.2 million, or $0.41 per diluted share.

On a non-GAAP basis, the Company reported consolidated net income for the third quarter ended October 29, 2016 of $53.6 million, or $0.48 per diluted share, excluding costs the Company incurred to convert former The Sports Authority ("TSA") stores to DICK’S Sporting Goods stores, compared to the Company’s expectations provided on August 16, 2016 of $0.39 to 0.42 per diluted share. For the third quarter ended October 31, 2015, the Company reported consolidated non-GAAP net income of $51.9 million, or $0.45 per diluted share, excluding a litigation settlement charge. The GAAP to non-GAAP reconciliations are included in a table later in the release under the heading "Non-GAAP Net Income and Earnings Per Share Reconciliations."

Net sales for the third quarter of 2016 increased 10.2% to approximately $1.8 billion. Consolidated same store sales increased 5.2%, compared to the Company’s guidance of an approximate 2 to 3% increase. Same store sales for DICK’S Sporting Goods increased 5.5%, while Golf Galaxy decreased 3.3%. Third quarter 2015 consolidated same store sales increased 0.4%.

"We are very pleased with our third quarter results, which were driven by a 5.2% comp sales increase and gross margin expansion. We realized meaningful market share gains and saw growth across each of our three primary categories of hardlines, apparel and footwear, while maintaining tight control of our inventory," said Edward W. Stack, Chairman and CEO. "Looking ahead, we believe our assortment and marketing will help us to continue to capture displaced market share this holiday."

Omni-channel Development

eCommerce penetration for the third quarter of 2016 was 9.6% of total net sales, compared to 8.0% during the third quarter of 2015.

In the third quarter, the Company opened 27 new DICK’S Sporting Goods stores, seven new Field & Stream stores, and two new Golf Galaxy stores. The Company also relocated four DICK’S Sporting Goods stores. Additionally, the Company closed one Field & Stream store. As of October 29, 2016, the Company operated 676 DICK’S Sporting Goods stores in 47 states, with approximately 36.1 million square feet, 74 Golf Galaxy stores in 29 states, with approximately 1.4 million square feet, and 27 Field & Stream stores in 13 states, with approximately 1.3 million square feet.

Store count, square footage and new stores are listed in a table later in the release under the heading "Store Count and Square Footage."

Balance Sheet

The Company ended the third quarter of 2016 with approximately $85 million in cash and cash equivalents and approximately $261 million in outstanding borrowings under its revolving credit facility. Over the course of the last 12 months, the Company continued to invest in omni-channel growth, while returning over $240 million to shareholders through share repurchases and quarterly dividends.

Total inventory increased 4.8% at the end of the third quarter of 2016 as compared to the end of the third quarter of 2015.

Year-to-Date Results

The Company reported consolidated net income for the 39 weeks ended October 29, 2016 of $197.2 million, or $1.75 per diluted share. For the 39 weeks ended October 31, 2015, the Company reported consolidated net income of $201.4 million, or $1.71 per diluted share.

On a non-GAAP basis, the Company reported consolidated net income for the 39 weeks ended October 29, 2016 of $201.9 million, or $1.80 per diluted share, excluding costs the Company incurred to convert former TSA stores to DICK’S Sporting Goods stores. For the 39 weeks ended October 31, 2015, the Company reported consolidated non-GAAP net income of $206.1 million, or $1.75 per diluted share, excluding a litigation settlement charge. The GAAP to non-GAAP reconciliations are included in a table later in the release under the heading "Non-GAAP Net Income and Earnings Per Share Reconciliations."

Net sales for the 39 weeks ended October 29, 2016 increased 8.1% from last year’s period to approximately $5.4 billion, reflecting the growth of our store network and a 2.9% increase in consolidated same store sales.

Capital Allocation

On November 10, 2016, the Company’s Board of Directors authorized and declared a quarterly dividend in the amount of $0.15125 per share on the Company’s Common Stock and Class B Common Stock. The dividend is payable in cash on December 30, 2016 to stockholders of record at the close of business on December 9, 2016.

During the third quarter of 2016, the Company repurchased approximately 0.2 million shares of its common stock at an average cost of $51.53 per share, for a total cost of $9 million. During the current fiscal year, the Company has repurchased approximately 2.6 million shares of its common stock at an average cost of $44.95 per share, for a total cost of $116 million. Since the beginning of fiscal 2013, the Company has repurchased approximately $929 million of its common stock, and has approximately $1.1 billion remaining under its authorizations that extend through 2021.

Golfsmith International Holdings, Inc.

On November 2, 2016, the Company completed its purchase for certain assets of Golfsmith International Holdings, Inc. ("Golfsmith"), including its intellectual property and rights to acquire store leases, together with inventory for 30 stores. The Company’s purchase was made in connection with Golfsmith’s Chapter 11 proceeding. The purchase price was approximately $43 million, of which $32 million is related to inventory. Intellectual property includes the name "Golfsmith", as well as Golfsmith’s domain names, owned trademarks and customer information. The Company also committed to offer employment to at least 500 current Golfsmith employees. The Company expects this transaction to be accretive to its fiscal 2017 earnings.

The Sports Authority

On July 20, 2016, the Company completed its purchase of The Sports Authority’s ("TSA") intellectual property assets and the right to acquire 31 store leases. The Company’s rights with respect to the store leases allowed the Company a period of time to determine whether to accept or reject any particular store lease. The Company has determined to retain 22 of these leases for conversion to DICK’S Sporting Goods stores. In addition, the Company will leverage the TSA customer information it purchased in its marketing during the fourth quarter of 2016.

Current 2016 Outlook

The Company’s current outlook for 2016 is based on current expectations and includes "forward-looking statements" within the meaning of Private Securities Litigation Reform Act of 1995, as described later in this release. Although the Company believes that the expectations and other comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations or comments will prove to be correct.

-- Full Year 2016

Based on an estimated 112 million diluted shares outstanding, the Company currently anticipates reporting earnings per diluted share in the range of $2.91 to 3.03. The Company’s earnings per diluted share guidance is not dependent upon share repurchases beyond the $116 million executed through the third quarter of fiscal 2016. The Company reported earnings per diluted share of $2.83 for the 52 weeks ended January 30, 2016.

On a non-GAAP basis, the Company currently anticipates reporting earnings per diluted share in the range of $2.99 to 3.11, excluding costs the Company expects to incur to convert former TSA and Golfsmith stores. The Company reported non-GAAP earnings per diluted share of $2.87, excluding a litigation settlement charge, for the 52 weeks ended January 30, 2016.

Consolidated same store sales are currently expected to increase approximately 3 to 4%, compared to a 0.2% decrease in fiscal 2015.

The Company expects to open 38 new DICK’S Sporting Goods stores and relocate nine DICK’S Sporting Goods stores in 2016. The Company also expects to open nine new Field & Stream stores and two new Golf Galaxy stores in 2016, largely adjacent to new or relocated DICK’S Sporting Goods stores.

The Company is currently operating 30 Golfsmith stores, with plans to retain and convert these stores to the Golf Galaxy brand by the end of the fourth quarter.

-- Fourth Quarter 2016

Based on an estimated 112 million diluted shares outstanding, the Company currently anticipates reporting earnings per diluted share in the range of $1.15 to 1.27 in the fourth quarter of 2016. This is compared to earnings per diluted share of $1.13 in the fourth quarter of 2015.

On a non-GAAP basis, the Company currently anticipates reporting earnings per diluted share in the range of $1.19 to 1.31 in the fourth quarter of 2016, excluding costs the Company expects to incur to convert former TSA and Golfsmith stores.

Consolidated same store sales are currently expected to increase approximately 3 to 6% in the fourth quarter of 2016, as compared to a 2.5% decrease in the fourth quarter of 2015.

The Company expects to re-open three former TSA stores as new DICK’S Sporting Goods stores in the fourth quarter of 2016.

The Company is currently operating 30 Golfsmith stores, with plans to retain and convert these stores to the Golf Galaxy brand by the end of the fourth quarter.

-- Capital Expenditures

In 2016, the Company anticipates capital expenditures to be approximately $275 million on a net basis and approximately $450 million on a gross basis. In 2015, capital expenditures were $204 million on a net basis and $370 million on a gross basis.

Conference Call Info

The Company will host a conference call today at 10:00 a.m. Eastern Time to discuss the third quarter results. Investors will have the opportunity to listen to the earnings conference call over the internet through the Company’s website located at investors.DICKS.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download and install any necessary audio software.

In addition to the webcast, the call can be accessed by dialing (877) 443-5743 (domestic callers) or (412) 902-6617 (international callers) and requesting the "DICK’S Sporting Goods Earnings Call."

For those who cannot listen to the live webcast, it will be archived on the Company’s website for approximately 30 days. In addition, a dial-in replay of the call will be available. To listen to the replay, investors should dial (877) 344-7529 (domestic callers) or (412) 317-0088 (international callers) and enter confirmation code 10094485. The dial-in replay will be available for approximately 30 days following the live call.

Non-GAAP Financial Measures

In addition to reporting the Company’s financial results in accordance with generally accepted accounting principles ("GAAP"), the Company reports certain financial results that differ from what is reported under GAAP. These non-GAAP financial measures include non-GAAP consolidated net income and non-GAAP earnings per diluted share which the Company believes provides users of its financial information with useful information to evaluate the Company’s ongoing operations and to compare its current operations with historical and future operations that would be difficult if the Company’s financial results were limited to financial measures prepared only in accordance with GAAP. In addition, the Company presents EBITDA, adjusted EBITDA, and net capital expenditures because the Company believes these measures are useful to financial analysts who follow the Company. Management also uses certain non-GAAP measures internally for forecasting, budgeting, and measuring its operating performance. These measures should be viewed as supplementing, and not as an alternative or substitute for, the Company’s financial results prepared in accordance with GAAP. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies. A reconciliation of the Company’s non-GAAP measures to the most directly comparable GAAP financial measures are provided below and on the Company’s website at investors.DICKS.com.

Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties

This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties and change based on various important factors, many of which may be beyond our control. Our future performance and actual results may differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements should not be relied upon by investors as a prediction of actual results. Forward-looking statements include statements regarding, among other things, the Company’s future performance, capturing market share, the integration of the TSA and Golfsmith stores, anticipated store openings and store relocations, capital expenditures, outstanding borrowings in future periods and share repurchases.

Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements include, but are not limited to: the uncertain impact of recent liquidation sales on customer demand; changes in consumer discretionary spending; the development of our eCommerce platform being more difficult, time-consuming, or costly than expected; the transition to our own eCommerce platform not producing the anticipated benefits within the expected time-frame or at all; the amount that we invest in strategic transactions and the timing and success of those investments; the integration of strategic acquisitions being more difficult, time-consuming, or costly than expected; inventory turn; changes in the competitive market and competition amongst retailers; changes in consumer demand or shopping patterns and our ability to identify new trends and have the right trending products in our stores and on our website; limitations on the availability of attractive retail store sites; omni-channel growth; unauthorized disclosure of sensitive or confidential customer information; risks relating to our private brand offerings and new retail concepts; disruptions with our eCommerce service provider or our information systems; factors affecting our vendors, including supply chain and currency risks; talent needs and the loss of Edward W. Stack, our Chairman and Chief Executive Officer; disruptions of our information systems; developments with sports leagues, professional athletes or sports superstars; weather-related disruptions and seasonality of our business; and risks associated with being a controlled company.

For additional information on these and other factors that could affect our actual results, see our risk factors, which may be amended from time to time, set forth in our filings with the SEC, including our most recent Annual Report filed with the Securities and Exchange Commission on March 25, 2016. The Company disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation. Forward-looking statements included in this release are made as of the date of this release.

About DICK’S Sporting Goods, Inc.

Founded in 1948, DICK’S Sporting Goods, Inc. is a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-quality sports equipment, apparel, footwear and accessories. As of October 29, 2016, the Company operated more than 675 DICK’S Sporting Goods locations across the United States, serving and inspiring athletes and outdoor enthusiasts to achieve their personal best through a blend of dedicated associates, in-store services and unique specialty shop-in-shops dedicated to Team Sports, Athletic Apparel, Golf, Lodge/Outdoor, Fitness and Footwear.

Headquartered in Pittsburgh, PA, DICK’S also owns and operates Golf Galaxy, Field & Stream, True Runner and Chelsea Collective specialty stores and DICK’S Team Sports HQ, an all-in-one youth sports digital platform with free registration, website and mobile app capabilities, custom uniforms and FanWear shops, as well as access to donations and sponsorships. DICK’S offers its products through a content-rich eCommerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront. For more information, visit the Press Room or Investor Relations pages at DICKS.com.

Contacts: Investor Relations: Nate Gilch, Director of Investor Relations DICK’S Sporting Goods, Inc. investors@dcsg.com (724) 273-3400

Media Relations: (724) 273-5552 or press@dcsg.com

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
13 Weeks Ended
October 29,
% of
October 31,
% of
2016
Sales
2015
Sales
Net sales
$
1,810,347
100.00 %
$
1,642,627
100.00 %
Cost of goods sold, including occupancy and
1,257,504
69.46
1,154,251
70.27
distribution costs
GROSS PROFIT
552,843
30.54
488,376
29.73
Selling, general and administrative expenses
459,782
25.40
395,015
24.05
Pre-opening expenses
19,304
1.07
16,280
0.99
INCOME FROM OPERATIONS
73,757
4.07
77,081
4.69
Interest expense
1,265
0.07
1,076
0.07
Other (income) expense
(3,778)
(0.21)
1,185
0.07
INCOME BEFORE INCOME TAXES
76,270
4.21
74,820
4.55
Provision for income taxes
27,356
1.51
27,605
1.68
NET INCOME
$
48,914
2.70
%
$
47,215
2.87
%
EARNINGS PER COMMON SHARE:
Basic
$
0.44
$
0.41
Diluted
$
0.44
$
0.41
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
110,607
114,978
Diluted
111,826
116,506
Cash dividend declared per share
$
0.15125
$
0.13750
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
39 Weeks Ended
October 29,
% of
October 31,
% of
2016
Sales(1)
2015
Sales(1)
Net sales
$
5,438,548
100.00 %
$
5,030,914
100.00 %
Cost of goods sold, including occupancy and
3,792,529
69.73
3,519,993
69.97
distribution costs
GROSS PROFIT
1,646,019
30.27
1,510,921
30.03
Selling, general and administrative expenses
1,300,071
23.90
1,151,686
22.89
Pre-opening expenses
34,309
0.63
31,836
0.63
INCOME FROM OPERATIONS
311,639
5.73
327,399
6.51
Interest expense
4,014
0.07
2,550
0.05
Other income
(7,775)
(0.14)
(812)
(0.02)
INCOME BEFORE INCOME TAXES
315,400
5.80
325,661
6.47
Provision for income taxes
118,192
2.17
124,262
2.47
NET INCOME
$
197,208
3.63
%
$
201,399
4.00
%
EARNINGS PER COMMON SHARE:
Basic
$
1.77
$
1.73
Diluted
$
1.75
$
1.71
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
111,328
116,101
Diluted
112,407
117,739
Cash dividends declared per share
$
0.45375
$
0.41250
(1) Column does not add due to rounding
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(Dollars in thousands)
October 29,
October 31,
January 30,
2016
2015
2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
85,408
$
73,799
$
118,936
Accounts receivable, net
121,189
96,406
61,395
Income taxes receivable
32,583
8,719
5,432
Inventories, net
2,092,402
1,997,105
1,527,187
Prepaid expenses and other current assets
112,523
107,755
99,740
Total current assets
2,444,105
2,283,784
1,812,690
Property and equipment, net
1,492,274
1,341,166
1,347,885
Intangible assets, net
137,155
109,827
109,440
Goodwill
200,594
200,594
200,594
Other assets:
Deferred income taxes
5,345
20,066
6,165
Other
102,733
73,912
82,562
Total other assets
108,078
93,978
88,727
TOTAL ASSETS
$
4,382,206
$
4,029,349
$
3,559,336
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable
$
1,031,587
$
941,973
$
677,864
Accrued expenses
375,553
345,052
289,001
Deferred revenue and other liabilities
146,585
133,593
184,386
Income taxes payable
--
--
39,835
Current portion of other long-term debt and leasing
615
575
589
obligations
Total current liabilities
1,554,340
1,421,193
1,191,675
LONG-TERM LIABILITIES:
Revolving credit borrowings
260,900
342,400
--
Other long-term debt and leasing obligations
4,861
5,477
5,324
Deferred income taxes
8,252
--
6,454
Deferred revenue and other liabilities
683,988
536,973
566,696
Total long-term liabilities
958,001
884,850
578,474
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock
860
883
869
Class B common stock
247
249
249
Additional paid-in capital
1,114,622
1,053,748
1,063,705
Retained earnings
1,882,934
1,623,962
1,737,214
Accumulated other comprehensive loss
(147)
(125)
(179)
Treasury stock, at cost
(1,128,651)
(955,411)
(1,012,671)
Total stockholders’ equity
1,869,865
1,723,306
1,789,187
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
4,382,206
$
4,029,349
$
3,559,336
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(Dollars in thousands)
39 Weeks Ended
October 29,
October 31,
2016
2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
197,208
$
201,399
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
149,131
136,683
Deferred income taxes
2,618
(11,112)
Stock-based compensation
24,746
21,687
Excess tax benefit from exercise of stock options
(8,620)
(6,308)
Other non-cash items
541
442
Changes in assets and liabilities:
Accounts receivable
(38,002)
(22,556)
Inventories
(565,215)
(606,338)
Prepaid expenses and other assets
(10,931)
(18,685)
Accounts payable
342,369
324,832
Accrued expenses
67,986
38,817
Income taxes payable / receivable
(58,841)
(36,424)
Deferred construction allowances
114,158
118,647
Deferred revenue and other liabilities
(32,686)
(25,215)
Net cash provided by operating activities
184,462
115,869
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(307,302)
(273,962)
Deposits and purchases of other assets
(41,946)
(2,406)
Net cash used in investing activities
(349,248)
(276,368)
CASH FLOWS FROM FINANCING ACTIVITIES:
Revolving credit borrowings
1,738,200
1,019,100
Revolving credit repayments
(1,477,300)
(676,700)
Payments on other long-term debt and leasing obligations
(437)
(398)
Construction allowance receipts
--
--
Proceeds from exercise of stock options
24,950
18,668
Excess tax benefit from exercise of stock options
8,620
6,309
Minimum tax withholding requirements
(6,909)
(7,703)
Cash paid for treasury stock
(116,006)
(300,000)
Cash dividends paid to stockholders
(51,246)
(49,235)
Increase in bank overdraft
11,354
2,630
Net cash provided by financing activities
131,226
12,671
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
32
(52)
NET DECREASE IN CASH AND CASH EQUIVALENTS
(33,528)
(147,880)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
118,936
221,679
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
85,408
$
73,799
Store Count and Square Footage
The stores that opened during the third quarter of 2016 are as follows:
Store
Market
Concept
Brookfield, WI
Milwaukee
DICK’S Sporting Goods
Trexlertown, PA
Allentown
DICK’S Sporting Goods
Wausau, WI
Wausau
DICK’S Sporting Goods
Waite Park, MN
St. Cloud
DICK’S Sporting Goods
Chesapeake, VA
Virginia Beach
DICK’S Sporting Goods (1)
Lodi, CA
Stockton
DICK’S Sporting Goods
Morgan Hill, CA
Morgan Hill
DICK’S Sporting Goods
Washington, DC (Dakota Crossing)
Washington DC
DICK’S Sporting Goods
Longview, TX
Longview
DICK’S Sporting Goods
Oxford, MS
Oxford
DICK’S Sporting Goods
Charlottesville, VA
Charlottesville
DICK’S Sporting Goods (1)
Silverdale, WA
Silverdale
DICK’S Sporting Goods
Medford, OR
Medford
DICK’S Sporting Goods (1)
Yorktown Heights, NY
White Plains
DICK’S Sporting Goods
Reno, NV
Reno
DICK’S Sporting Goods
Thousand Oaks, CA
Los Angeles
DICK’S Sporting Goods
Willowbrook, TX
Houston
DICK’S Sporting Goods
Deerbrook, TX
Houston
DICK’S Sporting Goods
The Woodlands, TX
Houston
DICK’S Sporting Goods
Baybrook, TX
Houston
DICK’S Sporting Goods (1)
Sugar Land, TX
Houston
DICK’S Sporting Goods
Katy, TX
Houston
DICK’S Sporting Goods (1)
Boca Raton, FL
West Palm Beach
DICK’S Sporting Goods
Springfield, OH
Dayton
DICK’S Sporting Goods
New Philadelphia, OH
Canton-Akron
DICK’S Sporting Goods
Morristown, TN
Morristown
DICK’S Sporting Goods
Olympia, WA
Olympia
DICK’S Sporting Goods
Baybrook, TX
Houston
Golf Galaxy (1)
Katy, TX
Houston
Golf Galaxy (1)
Latham, NY
Albany
Field & Stream (1)
Chesapeake, VA
Virginia Beach
Field & Stream (1)
Charlottesville, VA
Charlottesville
Field & Stream (1)
Medford, OR
Medford
Field & Stream (1)
Baybrook, TX
Houston
Field & Stream (1)
Katy, TX
Houston
Field & Stream (1)
Huntington, NY
Long Island
Field & Stream (1)
The following represents a reconciliation of beginning and ending stores and square footage for the periods indicated:
Store Count:
Fiscal 2016
Fiscal 2015
DICK’S
Specialty Store
Total
DICK’S
Specialty Store
Total
Sporting
Concepts (1)
Sporting
Concepts (1)
Goods (1)
Goods (1)
Beginning stores
644
97
741
603
91
694
Q1 New stores
3
2
5
9
1
10
Q2 New stores
5
--
5
7
1
8
Q3 New stores
27
9
36
27
9
36
Ending stores
679
108
787
646
102
748
Closed stores
3
2
5
1
3
4
Ending stores
676
106
782
645
99
744
Relocated stores
9
--
9
6
1
7
Square Footage:
(in millions)
DICK’S
Specialty Store
Total (2)
Sporting
Concepts (1)
Goods (1)
Q1 2015
32.7
2.0
34.7
Q2 2015
33.1
2.0
35.1
Q3 2015
34.4
2.4
36.8
Q4 2015
34.4
2.3
36.7
Q1 2016
34.5
2.4
37.0
Q2 2016
34.6
2.4
37.1
Q3 2016
36.1
2.7
38.8
(1) Includes the Company’s Golf Galaxy, Field & Stream and other specialty concept stores. In some markets we operate adjacent stores on the same property with a pass-through for customers. We refer to this format as a "combo store" and include combo store openings within both the DICK’S Sporting Goods and specialty store concept reconciliations, as applicable. As of October 29, 2016, the Company operated 12 combo stores.
(2) Column may not add due to rounding.
Non-GAAP Net Income and Earnings Per Share Reconciliations
(in thousands, except per share data):
Fiscal 2016
13 Weeks Ended October 29, 2016
As Reported
TSA
Non-GAAP
Integration
Total
Costs
Net sales
$
1,810,347
$
--
$
1,810,347
Cost of goods sold, including occupancy and
1,257,504
--
1,257,504
distribution costs
GROSS PROFIT
552,843
--
552,843
Selling, general and administrative expenses
459,782
(6,491)
453,291
Pre-opening expenses
19,304
(1,145)
18,159
INCOME FROM OPERATIONS
73,757
7,636
81,393
Interest expense
1,265
--
1,265
Other income
(3,778)
--
(3,778)
INCOME BEFORE INCOME TAXES
76,270
7,636
83,906
Provision for income taxes
27,356
2,902
30,258
NET INCOME
$
48,914
$
4,734
$
53,648
EARNINGS PER COMMON SHARE:
Basic
$
0.44
$
0.49
Diluted
$
0.44
$
0.48
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
110,607
110,607
Diluted
111,826
111,826
During the third quarter of 2016, the Company incurred costs of $7.6 million, pre-tax, to convert former TSA stores to DICK’S Sporting Goods stores. The provision for income taxes was calculated at 38%, which approximates the Company’s blended tax rate.
Fiscal 2016
39 Weeks Ended October 29, 2016
As Reported
TSA
Non-GAAP
Integration
Total
Costs
Net sales
$
5,438,548
$
--
$
5,438,548
Cost of goods sold, including occupancy and
3,792,529
--
3,792,529
distribution costs
GROSS PROFIT
1,646,019
--
1,646,019
Selling, general and administrative expenses
1,300,071
(6,491)
1,293,580
Pre-opening expenses
34,309
(1,145)
33,164
INCOME FROM OPERATIONS
311,639
7,636
319,275
Interest expense
4,014
--
4,014
Other income
(7,775)
--
(7,775)
INCOME BEFORE INCOME TAXES
315,400
7,636
323,036
Provision for income taxes
118,192
2,902
121,094
NET INCOME
$
197,208
$
4,734
$
201,942
EARNINGS PER COMMON SHARE:
Basic
$
1.77
$
1.81
Diluted
$
1.75
$
1.80
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
111,328
111,328
Diluted
112,407
112,407
During the third quarter of 2016, the Company incurred costs of $7.6 million, pre-tax, to convert former TSA stores to DICK’S Sporting Goods stores. The provision for income taxes was calculated at 38%, which approximates the Company’s blended tax rate.
Fiscal 2015
13 Weeks Ended October 31, 2015
As Reported
Litigation
Non-GAAP
Settlement
Total
Charge
Net sales
$
1,642,627
$
--
$
1,642,627
Cost of goods sold, including occupancy and
1,154,251
--
1,154,251
distribution costs
GROSS PROFIT
488,376
--
488,376
Selling, general and administrative expenses
395,015
(7,884)
387,131
Pre-opening expenses
16,280
--
16,280
INCOME FROM OPERATIONS
77,081
7,884
84,965
Interest expense
1,076
--
1,076
Other expense
1,185
--
1,185
INCOME BEFORE INCOME TAXES
74,820
7,884
82,704
Provision for income taxes
27,605
3,154
30,759
NET INCOME
$
47,215
$
4,730
$
51,945
EARNINGS PER COMMON SHARE:
Basic
$
0.41
$
0.45
Diluted
$
0.41
$
0.45
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
114,978
114,978
Diluted
116,506
116,506
During the third quarter of 2015, the Company recorded a pre-tax litigation settlement charge of $7.9 million. The provision for income taxes was calculated at 40%, which approximated the Company’s blended tax rate.
Fiscal 2015
39 Weeks Ended October 31, 2015
As Reported
Litigation
Non-GAAP
Settlement
Total
Charge
Net sales
$
5,030,914
$
--
$
5,030,914
Cost of goods sold, including occupancy and
3,519,993
--
3,519,993
distribution costs
GROSS PROFIT
1,510,921
--
1,510,921
Selling, general and administrative expenses
1,151,686
(7,884)
1,143,802
Pre-opening expenses
31,836
--
31,836
INCOME FROM OPERATIONS
327,399
7,884
335,283
Interest expense
2,550
--
2,550
Other income
(812)
--
(812)
INCOME BEFORE INCOME TAXES
325,661
7,884
333,545
Provision for income taxes
124,262
3,154
127,416
NET INCOME
$
201,399
$
4,730
$
206,129
EARNINGS PER COMMON SHARE:
Basic
$
1.73
$
1.78
Diluted
$
1.71
$
1.75
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
116,101
116,101
Diluted
117,739
117,739
During the third quarter of 2015, the Company recorded a pre-tax litigation settlement charge of $7.9 million. The provision for income taxes was calculated at 40%, which approximated the Company’s blended tax rate.
Fiscal 2015
52 Weeks Ended January 30, 2016
As Reported
Litigation
Non-GAAP
Settlement
Total
Charge
Net sales
$
7,270,965
$
--
$
7,270,965
Cost of goods sold, including occupancy and
5,088,078
--
5,088,078
distribution costs
GROSS PROFIT
2,182,887
--
2,182,887
Selling, general and administrative expenses
1,613,075
(7,884)
1,605,191
Pre-opening expenses
34,620
--
34,620
INCOME FROM OPERATIONS
535,192
7,884
543,076
Interest expense
4,012
--
4,012
Other expense
305
--
305
INCOME BEFORE INCOME TAXES
530,875
7,884
538,759
Provision for income taxes
200,484
3,154
203,638
NET INCOME
$
330,391
$
4,730
$
335,121
EARNINGS PER COMMON SHARE:
Basic
$
2.87
$
2.91
Diluted
$
2.83
$
2.87
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
115,230
115,230
Diluted
116,794
116,794
During the third quarter of 2015, the Company recorded a pre-tax litigation settlement charge of $7.9 million. The provision for income taxes was calculated at 40%, which approximated the Company’s blended tax rate.
Adjusted EBITDA
Adjusted EBITDA should not be considered as an alternative to net income or any other generally accepted accounting principles measure of performance or liquidity. Adjusted EBITDA, as the Company has calculated it, may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA is a key metric used by the Company that provides a measurement of profitability that eliminates the effect of changes resulting from financing decisions, tax regulations, capital investments and certain non-recurring, infrequent or unusual items.
13 Weeks Ended
October 29,
October 31,
2016
2015
(dollars in thousands)
Net income
$
48,914
$
47,215
Provision for income taxes
27,356
27,605
Interest expense
1,265
1,076
Depreciation and amortization
52,600
46,087
EBITDA
$
130,135
$
121,983
Add: TSA integration costs
7,636
--
Add: Litigation settlement charge
--
7,884
Adjusted EBITDA, as defined
$
137,771
$
129,867
% increase in adjusted EBITDA
6
%
39 Weeks Ended
October 29,
October 31,
2016
2015
(dollars in thousands)
Net income
$
197,208
$
201,399
Provision for income taxes
118,192
124,262
Interest expense
4,014
2,550
Depreciation and amortization
149,131
136,683
EBITDA
$
468,545
$
464,894
Add: TSA integration costs
7,636
--
Add: Litigation settlement charge
--
7,884
Adjusted EBITDA, as defined
$
476,181
$
472,778
% increase in adjusted EBITDA
1
%
Reconciliation of Gross Capital Expenditures to Net Capital Expenditures
The following table represents a reconciliation of the Company’s gross capital expenditures to its capital expenditures, net of tenant allowances.
39 Weeks Ended
October 29,
October 31,
2016
2015
(dollars in thousands)
Gross capital expenditures
$
(307,302)
$
(273,962)
Proceeds from sale-leaseback transactions
--
--
Deferred construction allowances
114,158
118,647
Construction allowance receipts
--
--
Net capital expenditures
$
(193,144)
$
(155,315)
Reconciliation of Non-GAAP Consolidated Net Income and Earnings Per Diluted Share Guidance
13 Weeks Ended January 28, 2017
52 Weeks Ended January 28, 2017
Low-End
High-End
Low-End
High-End
Amount
EPS
Amount
EPS
Amount
EPS
Amount
EPS
GAAP consolidated net income and $
129,000
$
1.15
$
142,000
$
1.27
$
326,000
$
2.91
$
339,000
$
3.03
earnings per diluted share
Costs to convert former TSA and
7,500
7,500
15,000
15,000
Golfsmith stores
Tax effect of the above item
2,850
2,850
5,700
5,700
Non-GAAP consolidated net income $
133,650
$
1.19
$
146,650
$
1.31
$
335,300
$
2.99
$
348,300
$
3.11
and earnings per diluted share

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dicks-sporting-goods-reports-third-quarter-results-exceeds-earnings-expectations-and-raises-full-year-guidance-300362693.html

SOURCE DICK’S Sporting Goods, Inc.

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