PITTSBURGH, Aug. 18, 2015 /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 second quarter ended August 1, 2015.
Second Quarter Results
The Company reported consolidated net income for the second quarter ended August 1, 2015 of $90.8 million, or $0.77 per diluted share, compared to the Company's expectations provided on May 19, 2015 of $0.73 to 0.76 per diluted share. The Company reported consolidated net income for the second quarter ended August 2, 2014 of $69.5 million, or $0.57 per diluted share. Excluding golf restructuring charges in the prior year, net income was $81.7 million, or $0.67 per diluted share. The GAAP to non-GAAP reconciliation is included in a table later in the release under the heading "Non-GAAP Net Income and Earnings Per Share Reconciliations."
Net sales for the second quarter of 2015 increased 7.9% to approximately $1.8 billion. Consolidated same store sales increased 1.2%, compared to the Company's guidance of approximately flat to an increase of 2%. Same store sales for DICK'S Sporting Goods increased 1.5%, against a strong base that included the World Cup. Golf Galaxy decreased 2.9%, representing sequential progress. Second quarter 2014 consolidated same store sales increased 3.2%.
"We are pleased with our second quarter results. We delivered a double-digit increase in earnings by leveraging our omni-channel presence to generate profitable revenue growth and meaningful margin expansion," said Edward W. Stack, Chairman and CEO. "We are seeing the benefits of our key growth pillars, as we continue to open very productive stores while winning online."
Omni-channel Development
eCommerce penetration for the second quarter of 2015 was 7.3% of total net sales, compared to 6.3% during the second quarter of 2014.
In the second quarter, the Company opened seven new DICK'S Sporting Goods stores, one new Field & Stream store and closed three Golf Galaxy stores, as these leases expired. As of August 1, 2015, the Company operated 619 DICK'S Sporting Goods stores in 46 states, with approximately 33.1 million square feet, 75 Golf Galaxy stores in 29 states, with approximately 1.4 million square feet and 12 Field & Stream stores in seven states, with approximately 0.6 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 second quarter of 2015 with approximately $123 million in cash and cash equivalents and no 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 $288 million to shareholders through share repurchases and quarterly dividends. Total inventory increased 13.9% at the end of the second quarter of 2015 as compared to the end of the second quarter of 2014. This planned increase was due primarily to earlier receipts of back-to-school merchandise and support for the outdoor business.
Also, the Company has amended and extended its revolving credit facility prior to its expiration in December 2016, thereby benefiting from the attractive interest rate environment. The Company has increased its limit from $500 million to $1 billion to support the continued growth of its business.
Year-to-Date Results
The Company reported consolidated net income for the 26 weeks ended August 1, 2015 of $154.2 million, or $1.30 per diluted share. For the 26 weeks ended August 2, 2014, the Company reported consolidated net income of $139.5 million, or $1.14 per diluted share. The Company reported consolidated non-GAAP net income for the 26 weeks ended August 2, 2014 of $143.0 million, or $1.17 per diluted share. The GAAP to non-GAAP reconciliation is included in a table later in the release under the heading "Non-GAAP Net Income and Earnings Per Share Reconciliations."
Net sales for the 26 weeks ended August 1, 2015 increased 8.3% from last year's period to approximately $3.4 billion, reflecting the opening of new stores and a 1.1% increase in consolidated same store sales.
Capital Allocation
During fiscal 2015, the Company has repurchased approximately 2.6 million shares of its common stock at an average cost of $57.09 per share, for a total cost of $150 million. Since starting its $1 billion share repurchase authorization at the beginning of fiscal 2013, the Company has repurchased over $605 million of common stock, and has approximately $395 million remaining under the authorization.
On August 12, 2015, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $0.1375 per share on the Company's Common Stock and Class B Common Stock. The dividend is payable in cash on September 30, 2015 to stockholders of record at the close of business on September 11, 2015.
Current 2015 Outlook
The Company's current outlook for 2015 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 2015
- Based on an estimated 118 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share in the range of $3.13 to 3.21. The Company's earnings per diluted share guidance contemplates the $150 million of share repurchases executed in the first quarter of 2015. For the 52 weeks ended January 31, 2015, the Company reported consolidated earnings per diluted share of $2.84. Consolidated earnings per diluted share for the 52 weeks ended January 31, 2015 were $2.87, excluding a gain on the sale of an asset and golf restructuring charges.
- Consolidated same store sales are currently expected to increase in the range of 1 to 3%, compared to a 2.4% increase in fiscal 2014.
- The Company expects to open 44 new DICK'S Sporting Goods stores and relocate seven DICK'S Sporting Goods stores in 2015. The Company also expects to open nine new Field & Stream stores and relocate one Golf Galaxy store in 2015.
- Based on an estimated 118 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share in the range of $3.13 to 3.21. The Company's earnings per diluted share guidance contemplates the $150 million of share repurchases executed in the first quarter of 2015. For the 52 weeks ended January 31, 2015, the Company reported consolidated earnings per diluted share of $2.84. Consolidated earnings per diluted share for the 52 weeks ended January 31, 2015 were $2.87, excluding a gain on the sale of an asset and golf restructuring charges.
- Third Quarter 2015
- Based on an estimated 118 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share in the range of $0.45 to 0.48 in the third quarter of 2015, compared to consolidated earnings per diluted share of $0.41 in the third quarter of 2014.
- Consolidated same store sales are currently expected to increase in the range of 1 to 3% in the third quarter of 2015, as compared to a 1.1% increase in the third quarter of 2014.
- The Company expects to open 27 new DICK'S Sporting Goods stores and relocate five DICK'S Sporting Goods stores in the third quarter of 2015. The Company also expects to open seven new Field & Stream stores in the third quarter of 2015.
- Based on an estimated 118 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share in the range of $0.45 to 0.48 in the third quarter of 2015, compared to consolidated earnings per diluted share of $0.41 in the third quarter of 2014.
- Capital Expenditures
- In 2015, the Company anticipates capital expenditures to be approximately $245 million on a net basis and approximately $365 million on a gross basis. In 2014, capital expenditures were $247 million on a net basis and $349 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 second 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 10069408. The dial-in replay will be available for approximately 30 days following the live call.
Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties
This release contains forward-looking statements within the meaning of the securities laws. 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, number of shares outstanding, inventory position, growth in the omni-channel network, number of new store openings and capital expenditures.
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: changes in consumer discretionary spending; competition in the sporting goods industry; changes in consumer demand or shopping patterns and our ability to identify new trends; limitations on the availability of attractive retail store sites; omni-channel growth and our development of an eCommerce platform; 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, 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 27, 2015. 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 August 1, 2015, the Company operated more than 615 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. 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:
Anne-Marie Megela, Vice President – Treasury Services and Investor Relations, or
Nathaniel A. 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 | ||||||||||||||
August 1, | % of | August 2, | % of | |||||||||||
Net sales | $ | 1,822,979 | 100.00 | % | $ | 1,688,890 | 100.00 | % | ||||||
Cost of goods sold, including occupancy and | 1,269,421 | 69.63 | 1,186,334 | 70.24 | ||||||||||
GROSS PROFIT | 553,558 | 30.37 | 502,556 | 29.76 | ||||||||||
Selling, general and administrative expenses | 395,935 | 21.72 | 383,054 | 22.68 | ||||||||||
Pre-opening expenses | 9,216 | 0.51 | 7,940 | 0.47 | ||||||||||
INCOME FROM OPERATIONS | 148,407 | 8.14 | 111,562 | 6.61 | ||||||||||
Interest expense | 840 | 0.05 | 763 | 0.05 | ||||||||||
Other expense (income) | 153 | 0.01 | (2,013) | (0.12) | ||||||||||
INCOME BEFORE INCOME TAXES | 147,414 | 8.09 | 112,812 | 6.68 | ||||||||||
Provision for income taxes | 56,575 | 3.10 | 43,345 | 2.57 | ||||||||||
NET INCOME | $ | 90,839 | 4.98 | % | $ | 69,467 | 4.11 | % | ||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||
Basic | $ | 0.78 | $ | 0.58 | ||||||||||
Diluted | $ | 0.77 | $ | 0.57 | ||||||||||
WEIGHTED AVERAGE COMMON SHARES | ||||||||||||||
Basic | 116,281 | 119,950 | ||||||||||||
Diluted | 117,805 | 121,840 | ||||||||||||
Cash dividend declared per share | $ | 0.1375 | $ | 0.1250 | ||||||||||
(1) Column does not add due to rounding | ||||||||||||||
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED | ||||||||||||||
(In thousands, except per share data) | ||||||||||||||
26 Weeks Ended | ||||||||||||||
August 1, | % of | August 2, | % of | |||||||||||
Net sales | $ | 3,388,287 | 100.00 | % | $ | 3,127,798 | 100.00 | % | ||||||
Cost of goods sold, including occupancy and | 2,365,741 | 69.82 | 2,184,359 | 69.84 | ||||||||||
GROSS PROFIT | 1,022,546 | 30.18 | 943,439 | 30.16 | ||||||||||
Selling, general and administrative expenses | 756,671 | 22.33 | 705,643 | 22.56 | ||||||||||
Pre-opening expenses | 15,557 | 0.46 | 14,146 | 0.45 | ||||||||||
INCOME FROM OPERATIONS | 250,318 | 7.39 | 223,650 | 7.15 | ||||||||||
Interest expense | 1,474 | 0.04 | 1,372 | 0.04 | ||||||||||
Other income | (1,997) | (0.06) | (4,377) | (0.14) | ||||||||||
INCOME BEFORE INCOME TAXES | 250,841 | 7.40 | 226,655 | 7.25 | ||||||||||
Provision for income taxes | 96,657 | 2.85 | 87,205 | 2.79 | ||||||||||
NET INCOME | $ | 154,184 | 4.55 | % | $ | 139,450 | 4.46 | % | ||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||
Basic | $ | 1.32 | $ | 1.16 | ||||||||||
Diluted | $ | 1.30 | $ | 1.14 | ||||||||||
WEIGHTED AVERAGE COMMON SHARES | ||||||||||||||
Basic | 116,662 | 120,544 | ||||||||||||
Diluted | 118,356 | 122,600 | ||||||||||||
Cash dividends declared per share | $ | 0.2750 | $ | 0.2500 | ||||||||||
(1) Column does not add due to rounding | ||||||||||||||
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED BALANCE SHEETS - UNAUDITED | ||||||||||||
(Dollars in thousands) | ||||||||||||
August 1, | August 2, | January 31, | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS: | ||||||||||||
Cash and cash equivalents | $ | 123,220 | $ | 100,132 | $ | 221,679 | ||||||
Accounts receivable, net | 106,753 | 102,248 | 80,292 | |||||||||
Income taxes receivable | 4,652 | 6,328 | 14,293 | |||||||||
Inventories, net | 1,615,722 | 1,418,660 | 1,390,767 | |||||||||
Prepaid expenses and other current assets | 99,882 | 90,369 | 91,767 | |||||||||
Deferred income taxes | 46,130 | 39,423 | 51,586 | |||||||||
Total current assets | 1,996,359 | 1,757,160 | 1,850,384 | |||||||||
Property and equipment, net | 1,297,302 | 1,138,182 | 1,203,382 | |||||||||
Intangible assets, net | 108,240 | 84,901 | 110,162 | |||||||||
Goodwill | 200,594 | 200,594 | 200,594 | |||||||||
Other assets: | ||||||||||||
Deferred income taxes | 910 | 3,169 | 1,862 | |||||||||
Other | 72,453 | 71,477 | 69,814 | |||||||||
Total other assets | 73,363 | 74,646 | 71,676 | |||||||||
TOTAL ASSETS | $ | 3,675,858 | $ | 3,255,483 | $ | 3,436,198 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Accounts payable | $ | 783,722 | $ | 688,442 | $ | 614,511 | ||||||
Accrued expenses | 336,597 | 305,937 | 283,828 | |||||||||
Deferred revenue and other liabilities | 142,083 | 125,258 | 172,259 | |||||||||
Income taxes payable | 19,131 | 12,784 | 47,698 | |||||||||
Current portion of other long-term debt and leasing | 560 | 461 | 537 | |||||||||
Total current liabilities | 1,282,093 | 1,132,882 | 1,118,833 | |||||||||
LONG-TERM LIABILITIES: | ||||||||||||
Other long-term debt and leasing obligations | 5,627 | 6,232 | 5,913 | |||||||||
Deferred income taxes | 36,767 | 18,473 | 44,494 | |||||||||
Deferred revenue and other liabilities | 517,873 | 401,021 | 434,733 | |||||||||
Total long-term liabilities | 560,267 | 425,726 | 485,140 | |||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||
STOCKHOLDERS' EQUITY: | ||||||||||||
Common stock | 914 | 941 | 932 | |||||||||
Class B common stock | 249 | 249 | 249 | |||||||||
Additional paid-in capital | 1,045,084 | 979,696 | 1,015,404 | |||||||||
Retained earnings | 1,592,803 | 1,296,434 | 1,471,182 | |||||||||
Accumulated other comprehensive (loss) income | (109) | 40 | (73) | |||||||||
Treasury stock, at cost | (805,443) | (580,485) | (655,469) | |||||||||
Total stockholders' equity | 1,833,498 | 1,696,875 | 1,832,225 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 3,675,858 | $ | 3,255,483 | $ | 3,436,198 | ||||||
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED | ||||||||
(Dollars in thousands) | ||||||||
26 Weeks Ended | ||||||||
August 1, | August 2, | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 154,184 | $ | 139,450 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
Depreciation and amortization | 90,596 | 89,771 | ||||||
Deferred income taxes | (1,319) | (21,424) | ||||||
Stock-based compensation | 14,200 | 12,915 | ||||||
Excess tax benefit from exercise of stock options | (5,842) | (6,566) | ||||||
Gain on sale of asset | — | (14,428) | ||||||
Other non-cash items | 265 | 290 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (12,659) | (11,023) | ||||||
Inventories | (224,955) | (186,595) | ||||||
Prepaid expenses and other assets | (7,977) | (10,980) | ||||||
Accounts payable | 147,888 | 133,245 | ||||||
Accrued expenses | 9,638 | 7,697 | ||||||
Income taxes payable / receivable | (13,690) | 494 | ||||||
Deferred construction allowances | 75,082 | 44,934 | ||||||
Deferred revenue and other liabilities | (22,372) | (25,561) | ||||||
Net cash provided by operating activities | 203,039 | 152,219 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (154,785) | (150,382) | ||||||
Proceeds from sale of other assets | — | 73,392 | ||||||
Deposits and purchases of other assets | (406) | (79) | ||||||
Net cash used in investing activities | (155,191) | (77,069) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Revolving credit borrowings | 465,600 | 456,400 | ||||||
Revolving credit repayments | (465,600) | (456,400) | ||||||
Payments on other long-term debt and leasing obligations | (263) | (682) | ||||||
Construction allowance receipts | — | — | ||||||
Proceeds from exercise of stock options | 17,870 | 8,879 | ||||||
Excess tax benefit from exercise of stock options | 5,843 | 6,588 | ||||||
Minimum tax withholding requirements | (7,619) | (7,645) | ||||||
Cash paid for treasury stock | (150,000) | (124,999) | ||||||
Cash dividends paid to stockholders | (33,425) | (31,664) | ||||||
Increase (decrease) in bank overdraft | 21,323 | (7,242) | ||||||
Net cash used in financing activities | (146,271) | (156,765) | ||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (36) | 16 | ||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (98,459) | (81,599) | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 221,679 | 181,731 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 123,220 | $ | 100,132 | ||||
Store Count and Square Footage | ||||||||||||||||||||||
The stores that opened during the second quarter of 2015 are as follows: | ||||||||||||||||||||||
Store | Market | Concept | ||||||||||||||||||||
Arcola, VA | Washington, DC | DICK'S Sporting Goods | ||||||||||||||||||||
Bristol, TN | TriCities | DICK'S Sporting Goods | ||||||||||||||||||||
Mt. Pleasant, SC | Charleston | DICK'S Sporting Goods | ||||||||||||||||||||
Orlando, FL | Orlando | DICK'S Sporting Goods | ||||||||||||||||||||
Winchester, VA | Winchester | DICK'S Sporting Goods | ||||||||||||||||||||
Scottsdale, AZ | Phoenix | DICK'S Sporting Goods | ||||||||||||||||||||
Mobile, AL | Mobile | DICK'S Sporting Goods | ||||||||||||||||||||
Mobile, AL | Mobile | Field & Stream | ||||||||||||||||||||
The following represents a reconciliation of beginning and ending stores and square footage for the periods indicated: | ||||||||||||||||||||||
Store Count: | ||||||||||||||||||||||
Fiscal 2015 | Fiscal 2014 | |||||||||||||||||||||
DICK'S | Specialty Store | Total | DICK'S | Specialty Store | Total | |||||||||||||||||
Beginning stores | 603 | 91 | 694 | 558 | 84 | 642 | ||||||||||||||||
Q1 New stores | 9 | 1 | 10 | 8 | — | 8 | ||||||||||||||||
Q2 New stores | 7 | 1 | 8 | 8 | 1 | 9 | ||||||||||||||||
Ending stores | 619 | 93 | 712 | 574 | 85 | 659 | ||||||||||||||||
Closed stores | — | 3 | 3 | — | — | — | ||||||||||||||||
Ending stores | 619 | 90 | 709 | 574 | 85 | 659 | ||||||||||||||||
Relocated stores | 1 | 1 | 2 | 4 | 1 | 5 | ||||||||||||||||
Square Footage: | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||
DICK'S | Specialty Store | Total | ||||||||||||||||||||
Q1 2014 | 30.6 | 1.5 | 32.1 | |||||||||||||||||||
Q2 2014 | 30.9 | 1.6 | 32.5 | |||||||||||||||||||
Q3 2014 | 32.0 | 2.0 | 34.0 | |||||||||||||||||||
Q4 2014 | 32.3 | 1.9 | 34.2 | |||||||||||||||||||
Q1 2015 | 32.7 | 2.0 | 34.7 | |||||||||||||||||||
Q2 2015 | 33.1 | 2.0 | 35.1 | |||||||||||||||||||
(1) Includes the Company's Golf Galaxy, Field & Stream and True Runner stores. | ||||||||||||||||||||||
(2) All-American Sports Centers are reflected as a DICK'S Sporting Goods store and a Field & Stream store. | ||||||||||||||||||||||
Non-GAAP Financial Measures | ||||||||||||
In addition to reporting the Company's financial results in accordance with generally accepted accounting principles ("GAAP"), the Company believes that certain non-GAAP financial information provides users of the Company's financial information with additional useful information in evaluating operating performance between reporting periods. 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. | ||||||||||||
Non-GAAP Net Income and Earnings Per Share Reconciliations: | ||||||||||||
(in thousands, except per share data): | ||||||||||||
Fiscal 2014 | ||||||||||||
13 Weeks Ended August 2, 2014 | ||||||||||||
As Reported | Golf Restructuring Charges | Non-GAAP Total | ||||||||||
Net sales | $ | 1,688,890 | $ | — | $ | 1,688,890 | ||||||
Cost of goods sold, including occupancy and | 1,186,334 | (2,405) | 1,183,929 | |||||||||
GROSS PROFIT | 502,556 | 2,405 | 504,961 | |||||||||
Selling, general and administrative expenses | 383,054 | (17,960) | 365,094 | |||||||||
Pre-opening expenses | 7,940 | — | 7,940 | |||||||||
INCOME FROM OPERATIONS | 111,562 | 20,365 | 131,927 | |||||||||
Interest expense | 763 | — | 763 | |||||||||
Other income | (2,013) | — | (2,013) | |||||||||
INCOME BEFORE INCOME TAXES | 112,812 | 20,365 | 133,177 | |||||||||
Provision for income taxes | 43,345 | 8,146 | 51,491 | |||||||||
NET INCOME | $ | 69,467 | $ | 12,219 | $ | 81,686 | ||||||
EARNINGS PER COMMON SHARE: | ||||||||||||
Basic | $ | 0.58 | $ | 0.68 | ||||||||
Diluted | $ | 0.57 | $ | 0.67 | ||||||||
WEIGHTED AVERAGE COMMON SHARES | ||||||||||||
Basic | 119,950 | 119,950 | ||||||||||
Diluted | 121,840 | 121,840 | ||||||||||
During the second quarter of 2014, the Company recorded pre-tax restructuring charges of $20.4 million including a $14.3 million non-cash impairment of trademarks and store assets, severance charges of $3.7 million resulting from the elimination of specific staff in the golf area of its DICK'S stores and consolidation of DICK'S golf and Golf Galaxy corporate and administrative functions, and a $2.4 million write-down of excess golf inventories. The provision for income taxes was calculated at 40%, which approximates the Company's blended tax rate. | ||||||||||||
Fiscal 2014 | ||||||||||||||||
26 Weeks Ended August 2, 2014 | ||||||||||||||||
As Reported | Gain on Sale of Asset | Golf Restructuring Charges | Non-GAAP Total | |||||||||||||
Net sales | $ | 3,127,798 | $ | — | $ | — | $ | 3,127,798 | ||||||||
Cost of goods sold, including occupancy and | 2,184,359 | — | (2,405) | 2,181,954 | ||||||||||||
GROSS PROFIT | 943,439 | — | 2,405 | 945,844 | ||||||||||||
Selling, general and administrative expenses | 705,643 | 14,428 | (17,960) | 702,111 | ||||||||||||
Pre-opening expenses | 14,146 | — | — | 14,146 | ||||||||||||
INCOME FROM OPERATIONS | 223,650 | (14,428) | 20,365 | 229,587 | ||||||||||||
Interest expense | 1,372 | — | — | 1,372 | ||||||||||||
Other income | (4,377) | — | — | (4,377) | ||||||||||||
INCOME BEFORE INCOME TAXES | 226,655 | (14,428) | 20,365 | 232,592 | ||||||||||||
Provision for income taxes | 87,205 | (5,771) | 8,146 | 89,580 | ||||||||||||
NET INCOME | $ | 139,450 | $ | (8,657) | $ | 12,219 | $ | 143,012 | ||||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||||
Basic | $ | 1.16 | $ | 1.19 | ||||||||||||
Diluted | $ | 1.14 | $ | 1.17 | ||||||||||||
WEIGHTED AVERAGE COMMON SHARES | ||||||||||||||||
Basic | 120,544 | 120,544 | ||||||||||||||
Diluted | 122,600 | 122,600 | ||||||||||||||
During the first quarter of 2014, the Company recorded a pre-tax $14.4 million gain on sale of a Gulfstream G650 corporate aircraft. During the second quarter of 2014, the Company recorded pre-tax restructuring charges of $20.4 million including a $14.3 million non-cash impairment of trademarks and store assets, severance charges of $3.7 million resulting from the elimination of specific staff in the golf area of its DICK'S stores and consolidation of DICK'S golf and Golf Galaxy corporate and administrative functions, and a $2.4 million write-down of excess golf inventories. The provision for income taxes for the aforementioned adjustments were calculated at 40%, which approximates the Company's blended tax rate. | ||||||||||||||||
Fiscal 2014 | ||||||||||||||||
52 Weeks Ended January 31, 2015 | ||||||||||||||||
As Reported | Gain on Sale of Asset | Golf Restructuring Charges | Non-GAAP Total | |||||||||||||
Net sales | $ | 6,814,479 | $ | — | $ | — | $ | 6,814,479 | ||||||||
Cost of goods sold, including occupancy and | 4,727,813 | — | (2,405) | 4,725,408 | ||||||||||||
GROSS PROFIT | 2,086,666 | — | 2,405 | 2,089,071 | ||||||||||||
Selling, general and administrative expenses | 1,502,089 | 14,428 | (17,960) | 1,498,557 | ||||||||||||
Pre-opening expenses | 30,518 | — | — | 30,518 | ||||||||||||
INCOME FROM OPERATIONS | 554,059 | (14,428) | 20,365 | 559,996 | ||||||||||||
Interest expense | 3,215 | — | — | 3,215 | ||||||||||||
Other income | (5,170) | — | — | (5,170) | ||||||||||||
INCOME BEFORE INCOME TAXES | 556,014 | (14,428) | 20,365 | 561,951 | ||||||||||||
Provision for income taxes | 211,816 | (5,771) | 8,146 | 214,191 | ||||||||||||
NET INCOME | $ | 344,198 | $ | (8,657) | $ | 12,219 | $ | 347,760 | ||||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||||
Basic | $ | 2.89 | $ | 2.92 | ||||||||||||
Diluted | $ | 2.84 | $ | 2.87 | ||||||||||||
WEIGHTED AVERAGE COMMON SHARES | ||||||||||||||||
Basic | 119,244 | 119,244 | ||||||||||||||
Diluted | 121,238 | 121,238 | ||||||||||||||
During the first quarter of 2014, the Company recorded a pre-tax $14.4 million gain on sale of a Gulfstream G650 corporate aircraft. During the second quarter of 2014, the Company recorded pre-tax restructuring charges of $20.4 million including a $14.3 million non-cash impairment of trademarks and store assets, severance charges of $3.7 million resulting from the elimination of specific staff in the golf area of its DICK'S stores and consolidation of DICK'S golf and Golf Galaxy corporate and administrative functions, and a $2.4 million write-down of excess golf inventories. The provision for income taxes for the aforementioned adjustments were calculated at 40%, which approximates 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 | ||||||||
August 1, | August 2, | |||||||
(dollars in thousands) | ||||||||
Net income | $ | 90,839 | $ | 69,467 | ||||
Provision for income taxes | 56,575 | 43,345 | ||||||
Interest expense | 840 | 763 | ||||||
Depreciation and amortization | 48,020 | 52,912 | ||||||
EBITDA | $ | 196,274 | $ | 166,487 | ||||
Add: Golf restructuring charges | — | 6,043 | ||||||
Adjusted EBITDA, as defined | $ | 196,274 | $ | 172,530 | ||||
% increase in adjusted EBITDA | 14 | % | ||||||
26 Weeks Ended | ||||||||
August 1, | August 2, | |||||||
(dollars in thousands) | ||||||||
Net income | $ | 154,184 | $ | 139,450 | ||||
Provision for income taxes | 96,657 | 87,205 | ||||||
Interest expense | 1,474 | 1,372 | ||||||
Depreciation and amortization | 90,596 | 89,771 | ||||||
EBITDA | $ | 342,911 | $ | 317,798 | ||||
Less: Gain on sale of asset | — | (14,428) | ||||||
Add: Golf restructuring charges | — | 6,043 | ||||||
Adjusted EBITDA, as defined | $ | 342,911 | $ | 309,413 | ||||
% increase in adjusted EBITDA | 11 | % | ||||||
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. | ||||||||
26 Weeks Ended | ||||||||
August 1, | August 2, | |||||||
(dollars in thousands) | ||||||||
Gross capital expenditures | $ | (154,785) | $ | (150,382) | ||||
Proceeds from sale-leaseback transactions | — | — | ||||||
Deferred construction allowances | 75,082 | 44,934 | ||||||
Construction allowance receipts | — | — | ||||||
Net capital expenditures | $ | (79,703) | $ | (105,448) | ||||
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dicks-sporting-goods-reports-second-quarter-results-exceeds-earnings-expectations-and-raises-full-year-guidance-300129611.html
SOURCE DICK'S Sporting Goods, Inc.
