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

PITTSBURGH, Nov. 15, 2016 /PRNewswire/ -- DICK'S Sporting Goods, Inc. (NYSE: 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,  
2016


% of
Sales


October 31,  
2015


% of
Sales










Net sales


$

1,810,347



100.00

%


$

1,642,627



100.00

%

Cost of goods sold, including occupancy and 
   distribution costs


1,257,504



69.46



1,154,251



70.27











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, 
2016


% of 
Sales(1)


October 31,
2015


% of
Sales(1)










Net sales


$

5,438,548



100.00

%


$

5,030,914



100.00

%

Cost of goods sold, including occupancy and 
   distribution costs


3,792,529



69.73



3,519,993



69.97











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, 
2016


October 31, 
2015


January 30, 
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 
   obligations


615



575



589


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, 
2016


October 31, 
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
Sporting
Goods (1)


Specialty Store
Concepts (1)


Total


DICK'S
Sporting
Goods (1)


Specialty Store
Concepts (1)


Total

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
Sporting
Goods (1)


Specialty Store
Concepts (1)


Total (2)

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
Integration
Costs


Non-GAAP
Total

Net sales


$

1,810,347



$



$

1,810,347


Cost of goods sold, including occupancy and 
   distribution costs


1,257,504





1,257,504









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
Integration
Costs


Non-GAAP
Total

Net sales


$

5,438,548



$



$

5,438,548


Cost of goods sold, including occupancy and 
   distribution costs


3,792,529





3,792,529









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
Settlement
Charge


Non-GAAP
Total

Net sales


$

1,642,627



$



$

1,642,627


Cost of goods sold, including occupancy and 
   distribution costs


1,154,251





1,154,251









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
Settlement
Charge


Non-GAAP
Total

Net sales


$

5,030,914



$



$

5,030,914


Cost of goods sold, including occupancy and 
   distribution costs


3,519,993





3,519,993









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
Settlement
Charge


Non-GAAP
Total

Net sales


$

7,270,965



$



$

7,270,965


Cost of goods sold, including occupancy and 
   distribution costs


5,088,078





5,088,078









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, 
2016


October 31, 
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, 
2016


October 31, 
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, 
2016


October 31, 
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 
     earnings per diluted share

$

129,000



$

1.15



$

142,000



$

1.27



$

326,000



$

2.91



$

339,000



$

3.03


Costs to convert former TSA and 
     Golfsmith stores

7,500





7,500





15,000





15,000




Tax effect of the above item

2,850





2,850





5,700





5,700




Non-GAAP consolidated net income 
     and earnings per diluted share

$

133,650



$

1.19



$

146,650



$

1.31



$

335,300



$

2.99



$

348,300



$

3.11


 

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.