DICK'S SPORTING GOODS, INC. 
By PITTSBURGH, Jan. 27 /PRNewswire-FirstCall/ -- Dick's Sporting Goods, Inc. (NYSE: DKS) today increased its expectations for the fourth quarter and full year 2009 due to better than anticipated quarter-to-date performance.
Fourth Quarter Results
Based on an estimated 120 million diluted shares outstanding, the Company now anticipates reporting consolidated earnings per diluted share of at least $0.54 compared to the previous estimate of $0.41 to 0.46 provided on November 19, 2009. In the fourth quarter of 2008, the Company reported non-GAAP consolidated earnings per diluted share of $0.54. On a GAAP basis for the fourth quarter of 2008, the Company reported a loss of $0.94 per diluted share, which included a non-cash impairment charge and merger and integration costs.
Comparable store sales for the fourth quarter of 2009 are now expected to increase approximately 2% as compared to the previously expected decline of 6 to 4% provided on November 19, 2009. Comparable store sales declined 8.6% in the fourth quarter of 2008. The comparable store sales calculation for the fourth quarter in 2008 and 2009 includes Dick's Sporting Goods stores and Golf Galaxy stores. It excludes Chick's Sporting Goods stores converted to Dick's Sporting Goods stores.
Full Year 2009
Based on an estimated 118 million diluted shares outstanding, the Company now anticipates reporting consolidated earnings per diluted share of at least $1.17, excluding merger and integration costs as compared to expectations provided on November 19, 2009 of $1.04 - 1.09, excluding merger and integration costs. For the full year 2008, the Company reported consolidated earnings per diluted share of $1.15, excluding a non-cash impairment charge and merger and integration costs.
On a GAAP basis, the Company is now anticipating reporting consolidated earnings per diluted share of at least $1.12 in 2009 as compared to previous expectations of approximately $0.99 - 1.04 earnings per diluted share provided on November 19, 2009. In 2008, the Company reported a net loss of $0.36 per diluted share on a GAAP basis.
Comparable store sales are currently expected to decrease approximately 2% compared to the Company's previous expectation of a decline of approximately 4 to 3%. In 2008, comparable store sales declined 4.8%. The comparable store sales calculation for the full year 2009 includes Dick's Sporting Goods stores and Golf Galaxy stores. The comparable store sales calculation for the full year 2008 includes Dick's Sporting Goods stores only.
"At the time of our third quarter earnings announcement, same store sales had been running at a negative double-digit pace since mid-October. Beginning in the final week of November, however, we saw an improvement in same store sales, which continued and strengthened through the holidays," said Edward W. Stack, Chairman and CEO. "The better than expected comparable sales were seen across all major categories."
In 2010, the Company currently anticipates generating profitable growth with earnings per share greater than current 2009 expectations. In accordance with standard practice, the fourth quarter and full year 2009 results along with additional detail regarding 2010 expectations will be provided in March 2010.
Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as "may," "will," "expect," "anticipate," "believe," "guidance," "estimate," "intend," "predict," and "continue" or similar words. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks and uncertainties include, without limitation, the current economic and financial downturn and its effect on consumer spending, changes in macro economic factors and market conditions, including the housing market and fuel costs, that impact the level of consumer spending for the types of merchandise sold by the Company, potential volatility in our stock price and the tightening of availability and higher costs associated with current and new sources of credit resulting from uncertainty in financial markets, changes in consumer demand, the retailing environment and customer preferences and spending habits, competitive pressures, pricing and promotional activities of competitors, changes in law and regulation including consumer protection and labor, currency exchange rate fluctuations, weather conditions, litigation, risks and costs associated with combining businesses and/or assimilating acquired companies and our ability to manage our operations and growth. 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 31, 2009 as filed with the Securities and Exchange Commission on March 20, 2009, and other reports filed with the Securities and Exchange Commission. The Company disclaims any obligation and does 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 currently operates 419 Dick's Sporting Goods stores in 40 states primarily throughout the eastern half of the U.S. The Company also owns Golf Galaxy, Inc., a multi-channel golf specialty retailer, with 91 stores in 31 states, e-commerce websites and catalog operations.
Dick's Sporting Goods, Inc. news releases are available at http://www.dickssportinggoods.com (click on the Investor Relations link at the top of the home page).
Non-GAAP Net Income and Earnings Per Share Reconciliation
(in thousands, except per share data):
Fiscal 2008
13 Weeks Ended January 31, 2009
As Convertible GAAP
Note
Reported Interest(/1) Total
-------- --------- -----
Net sales $1,207,531 $- $1,207,531
Cost of goods
sold,
including
occupancy
and
distribution
costs 855,348 - 855,348
------- --- -------
GROSS PROFIT 352,183 - 352,183
Selling,
general and
administrative
expenses 241,676 - 241,676
Impairment of
goodwill and
other
intangible
assets 164,255 - 164,255
Impairment of
store assets 29,095 - 29,095
Merger and
integration
costs 9,903 - 9,903
Pre-opening
expenses 126 - 126
--- --- ---
INCOME (LOSS)
FROM
OPERATIONS (92,872) - (92,872)
Interest
expense, net 3,973 2,027 6,000
----- ----- -----
INCOME (LOSS)
BEFORE
INCOME TAXES (96,845) (2,027) (98,872)
Provision for
income taxes 7,532 (811) 6,721
----- ---- -----
NET INCOME
(LOSS) $(104,377) $(1,216) $(105,593)
========= ======= =========
EARNINGS
(LOSS) PER
COMMON
SHARE:
Basic $(0.93) $(0.94)
Diluted (/3) $(0.93) $(0.94)
WEIGHTED
AVERAGE
COMMON
SHARES
OUTSTANDING:
Basic 112,115 112,115
Diluted 112,115 112,115
Merger
and
Integration Impairment Non-GAAP
Costs Charges(/2) Total
----- --------------- -----
Net sales $- $- $1,207,531
Cost of goods
sold, including
occupancy
and distribution
costs - - 855,348
--- --- -------
GROSS PROFIT - - 352,183
Selling, general
and
administrative
expenses - - 241,676
Impairment of
goodwill and
other
intangible
assets - (164,255) -
Impairment of
store assets - (29,095) -
Merger and
integration
costs (9,903) - -
Pre-opening
expenses - - 126
--- --- ---
INCOME (LOSS)
FROM OPERATIONS 9,903 193,350 110,381
Interest
expense, net - - 6,000
--- --- -----
INCOME (LOSS)
BEFORE INCOME
TAXES 9,903 193,350 104,381
Provision for
income taxes 3,745 31,688 42,154
----- ------ ------
NET INCOME
(LOSS) $6,158 $161,662 $62,227
====== ======== =======
EARNINGS (LOSS)
PER COMMON
SHARE:
Basic $0.56
Diluted (/3) $0.54
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 112,115
Diluted 115,796
Notes:
/1 Convertible note interest adjustment is included to reconcile the
previously reported financial amounts to GAAP amounts, following the
Company's adoption of a new accounting standard in the first quarter
of fiscal 2009 which required the Company to retroactively recognize
additional non-cash interest expense based on the market rate for
similar debt instruments without the conversion feature.
/2 The goodwill impairment charge of $111,312 is not deductible for
tax purposes.
/3 Due to the net loss, as reported and GAAP diluted earnings per
share is calculated using basic weighted average common shares
outstanding.
Fiscal 2008
52 Weeks Ended January 31, 2009
As Convertible GAAP
Note
Reported Interest(/1) Total
-------- --------- -----
Net sales $4,130,128 $- $4,130,128
Cost of goods sold,
including
occupancy
and distribution
costs 2,946,079 - 2,946,079
--------- --- ---------
GROSS PROFIT 1,184,049 - 1,184,049
Selling, general and
administrative
expenses 928,170 - 928,170
Impairment of goodwill
and other
intangible assets 164,255 - 164,255
Impairment of
store assets 29,095 - 29,095
Merger and
integration costs 15,877 - 15,877
Pre-opening expenses 16,272 - 16,272
------ --- ------
INCOME FROM
OPERATIONS 30,380 - 30,380
Gain on sale of asset (2,356) - (2,356)
Interest expense, net 10,963 7,952 18,915
------ ----- ------
INCOME BEFORE
INCOME TAXES 21,773 (7,952) 13,821
Provision for income taxes,
excluding
tax impact of
non-deductible
executive separation
costs 54,362 (3,181) 51,181
Tax impact of
non-deductible
executive separation
costs 2,505 - 2,505
----- --- -----
Provision for income
taxes 56,867 (3,181) 53,686
------ ------ ------
NET INCOME (LOSS) $(35,094) $(4,771) $(39,865)
====== ===== ======
EARNINGS (LOSS) PER COMMON SHARE:
Basic $(0.31) $(0.36)
Diluted (/4) $(0.31) $(0.36)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic 111,662 111,662
Diluted 111,662 111,662
Merger
and
Integration Impairment Non-GAAP
Costs(/2) Charges(/3) Total
---- --------------- -----
Net sales $- $- $4,130,128
Cost of goods sold,
including
occupancy
and distribution
costs - - 2,946,079
--- ------
GROSS PROFIT - - 1,184,049
Selling, general and
administrative
expenses - - 928,170
Impairment of
goodwill and other
intangible assets - (164,255) -
Impairment of
store assets - (29,095) -
Merger and
Integration
costs (15,877) - -
Pre-opening
expenses - - 16,272
--- ----- ------
INCOME FROM
OPERATIONS 15,877 193,350 239,607
Gain on sale
of asset - - (2,356)
Interest expense,
net - - 18,915
--- --- ------
INCOME BEFORE
INCOME TAXES 15,877 193,350 223,048
Provision for
income taxes,
excluding
tax impact of
non-deductible
executive
separation
costs 6,041 31,688 88,910
Tax impact of
non-deductible
executive
separation
costs (2,505) - -
------ --- ---
Provision for
income taxes 3,536 31,688 88,910
----- ------ ------
NET INCOME
(LOSS) $12,341 $161,662 $134,138
======= ======== ========
EARNINGS (LOSS) PER COMMON SHARE:
Basic $1.20
Diluted (/4) $1.15
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic 111,662
Diluted 116,650
Notes:
/1 Convertible note interest adjustment is included to reconcile the
previously reported financial amounts to GAAP amounts, following the
Company's adoption of a new accounting standard in the first quarter
of fiscal 2009 which required the Company to retroactively recognize
additional non-cash interest expense based on the market rate for
similar debt instruments without the conversion feature.
/2 Costs related to the Golf Galaxy and Chick's Sporting Goods
integration total $18.4 million, which includes $15.9 million of pre
tax "merger and integration costs" and $2.5 million included in the
Company's provision for income taxes reflecting the "tax impact of
non-deductible executive separation costs". The net income impact
of merger and integration costs equals $12.3 million, which includes
$9.8 million for the after tax amount of "merger and integration
costs" and the $2.5 million included in the Company's provision for
income taxes reflecting the "tax impact of non-deductible executive
separation costs."
/3 The goodwill impairment charge of $111,312 is not deductible for
tax purposes.
/4 Due to the net loss, as reported and GAAP diluted earnings per
share is calculated using basic weighted average common shares
outstanding.
Contact:
--------
Timothy E. Kullman, EVP - Finance, Administration, Chief Financial Officer
and Treasurer or
Anne-Marie Megela, Director, Investor Relations
724-273-3400
investors@dcsg.com
SOURCE Dick's Sporting Goods, Inc.
