Dick's Sporting Goods Reports First Quarter Results; Exceeds Earnings Expectations

PITTSBURGH, May 17, 2011 /PRNewswire/ -- Dick's Sporting Goods, Inc. (NYSE: DKS) today reported sales and earnings results for the first quarter ended April 30, 2011.

First Quarter Results

The Company reported consolidated net income for the first quarter ended April 30, 2011 of $37.5 million, or $0.30 per diluted share, exceeding the Company's earnings expectations provided on March 8, 2011 of $0.26 – 0.28 per diluted share.  For the first quarter ended May 1, 2010, the Company reported consolidated net income of $26.2 million, or $0.22 per diluted share.

Net sales for the first quarter of 2011 increased by 6.3% to $1.1 billion due primarily to a 2.1% increase in consolidated same store sales and the opening of new stores. The 2.1% consolidated same store sales increase consisted of a 1.4% increase at Dick's Sporting Goods stores, a 3.3% increase at Golf Galaxy and a 25.2% increase in its e-commerce business.

"In the first quarter, we demonstrated our ability to effectively run our business and generate better than expected earnings, despite unfavorable weather conditions in many of our markets," said Edward W. Stack, Chairman and CEO. "With several multi-year growth opportunities, a strong balance sheet, and a talented team of associates, we are optimistic about the near and long-term prospects of our business."

New Stores

In the first quarter, the Company opened three Dick's Sporting Goods stores. These stores are listed in a table later in the release under the heading "Store Count and Square Footage."

As of April 30, 2011, the Company operated 447 Dick's Sporting Goods stores in 42 states, with approximately 24.7 million square feet and 81 Golf Galaxy stores in 30 states, with approximately 1.3 million square feet.

Balance Sheet

The Company ended the first quarter of 2011 with $533 million in cash and cash equivalents and did not have any outstanding borrowings under its $440 million Credit Agreement. At the end of the first quarter of 2010, the Company had $207 million in cash and cash equivalents and did not have any outstanding borrowings under its credit facility.

The inventory per square foot was 0.6% higher at the end of the first quarter 2011 as compared to the end of the first quarter of 2010.

Current 2011 Outlook

The Company's current outlook for 2011 is based on current expectations and includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 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 2011  

• Based on an estimated 126 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share of approximately $1.91 – 1.93. For the full year 2010, the Company reported consolidated non-GAAP earnings per diluted share of $1.63, excluding Golf Galaxy store closing costs and litigation settlement costs. On a GAAP basis, the Company reported consolidated earnings per diluted share of $1.50 in 2010.

• Consolidated same store sales are currently expected to increase approximately 3.0% compared to a 7.4% increase last year.

• The Company currently expects to open approximately 34 new Dick's Sporting Goods stores, remodel 14 Dick's Sporting Goods stores, open approximately three Golf Galaxy stores and relocate one Golf Galaxy store in 2011.

Second Quarter 2011

• Based on an estimated 126 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share of approximately $0.47 - 0.49 in the second quarter of 2011. In the second quarter of 2010, the Company reported consolidated earnings per diluted share of $0.43.

• Consolidated same store sales are currently expected to increase approximately 3.0% compared to a 5.7% increase in the second quarter last year.

• The Company expects to open approximately eight new Dick's Sporting Goods stores and relocate one Golf Galaxy store in the second quarter of 2011.

Capital Expenditures

• In 2011, the Company anticipates capital expenditures to be approximately $252 million on a gross basis and approximately $197 million on a net basis.

Conference Call Info

The Company will be hosting a conference call today at 10:00 a.m. eastern time to discuss the first quarter results.  Investors will have the opportunity to listen to the earnings conference call over the internet through the Company's web site located at http://www.dickssportinggoods.com/investors. To listen to the live call, please go to the web site at least fifteen minutes early to register and download and install any necessary audio software.  

In addition to the web cast, the call can be accessed by dialing (800) 215-2410 (domestic callers) or (617) 597-5410 (international callers) and entering confirmation code 10749323.

For those who cannot listen to the live web cast, it will be archived on the Company's web site for 30 days.  In addition, a dial-in replay of the call will be available. To listen to the replay, investors should dial (888) 286-8010 (domestic callers) or (617) 801-6888 (international callers) and enter confirmation code 21061424. The dial-in replay will be available for 30 days following the live call.

Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties

Except for historical information contained herein, the statements in this release or otherwise made by our management in connection with the subject matter of this release are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond our control. Our future performance and financial results may differ materially from those included in any such forward-looking statements and such forward-looking statements should not be relied upon by investors as a prediction of actual results. You can identify these statements as those that may predict, forecast, indicate or imply future results, performance or advancements and by forward-looking words such as "believe", "anticipate", "expect", "estimate", "predict", "intend", "plan", "project", "goal", "will", "will be", "will continue", "will result", "could", "may", "might" or other words with similar meanings. Forward-looking statements include, among other things, statements about our future expectations regarding growth, revenues, earnings, profitability, spending, margins, costs, liquidity, store openings and operations, inventory, private brand products, our actions, plans or strategies.

The following factors, among others, in some cases have affected and in the future could affect our financial performance and actual results, and could cause actual results for fiscal 2011 and beyond to differ materially from those expressed or implied in any forward-looking statements included in this release or otherwise made by our management: continuation of the recent economic and financial downturn and other changes in macroeconomic factors or market conditions that impact consumer spending; changes in the general economic and business conditions and in the specialty retail or sporting goods industry in particular; fluctuations in our quarterly operating results or same store sales; volatility in our stock price; our ability to access adequate capital; competition in the sporting goods industry; limitations on the availability of attractive store locations; inability to manage our growth, open new stores on a timely basis or expand successfully in new and existing markets; changes in consumer demand; unauthorized disclosure of sensitive, personal or confidential information; disruptions in our or our vendors' supply chains; factors affecting our vendors, including potential increases in the costs of products, their ability to maintain their inventory and production levels and their ability or willingness to provide us with sufficient quantities of products at acceptable prices; factors that could negatively affect our private brand offerings; risks and costs relating to product liability claims, product recalls and the regulation of and other hazards associated with certain products we sell; the loss of our key executives; costs and risks associated with increased or changing laws and regulations affecting our business; our ability to secure and protect our intellectual property; risks relating to operating as a multi-channel retailer, including the impact of rapid technological change, internet security and privacy issues and the threat of systems failure or inadequacy; problems with our current management information systems or software; disruption at our distribution facilities; the seasonality of our business; regional risks because our stores are generally concentrated in the eastern half of the United States; costs and risks related to litigation or other claims against us; costs and uncertainties associated with pursuing strategic acquisitions; our ability to meet our labor needs; currency exchange rate fluctuations; risks associated with our Chief Executive Officer and his relatives' controlling interest in the Company; the impact of foreign instability and conflict; our anti-takeover provisions, which could prevent or delay a change in control of the Company; and impairment in the carrying value of goodwill or other acquired intangibles.

Known and unknown risks and uncertainties are more fully described in the Company's Annual Report on Form 10-K for the year ended January 29, 2011 as filed with the Securities and Exchange Commission ("SEC") on March 18, 2011 and in other reports filed with the SEC.  In addition, we operate in a highly competitive and rapidly changing environment; therefore, new risk factors can arise, and it is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on our business or the extent to which any individual risk factor, or combination of risk factors, may cause results to differ materially from those contained in any forward-looking statement. We do not assume any obligation and do not intend to update any forward-looking statements except as may be required by the securities laws.

About Dick's Sporting Goods, Inc.

Dick's Sporting Goods, Inc. is an authentic full-line sporting goods retailer offering a broad assortment of brand name sporting goods equipment, apparel and footwear in a specialty store environment. The Company also owns and operates Golf Galaxy, LLC, a golf specialty retailer. As of April 30, 2011, the Company operated 447 Dick's Sporting Goods stores in 42 states, 81 Golf Galaxy stores in 30 states and e-commerce web sites and catalog operations for both Dick's Sporting Goods and Golf Galaxy. Dick's Sporting Goods, Inc. news releases are available at http://www.dickssportinggoods.com/investors. The Company's web site is not part of this release.

Contact:

Timothy E. Kullman, EVP – Finance, Administration, and Chief Financial Officer or
Anne-Marie Megela, Director, Investor Relations
(724) 273-3400
[email protected]

Non-GAAP Financial Measures

In addition to reporting the Company's financial results in accordance with generally accepted accounting principles ("GAAP"), the Company provides information regarding earnings before interest, taxes and depreciation ("EBITDA"); a reconciliation from the Company's gross capital expenditures, net of tenant allowances; and calculations of consolidated and Dick's Sporting Goods new store productivity.  These measures are considered non-GAAP and are not preferable to GAAP financial information; however, the Company believes this information provides additional measures of performance that the Company's management, analysts and investors can use to compare core, operating results between reporting periods. These non-GAAP measures are provided below and on the Company's website at http://www.dickssportinggoods.com/investors.

EBITDA

EBITDA should not be considered as an alternative to net income or any other generally accepted accounting principles measure of performance or liquidity.  EBITDA, as the Company has calculated it, may not be comparable to similarly titled measures reported by other companies.  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, and capital investments.

SOURCE Dick's Sporting Goods, Inc.