PITTSBURGH, Aug. 15, 2017
/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 July 29, 2017.
Second Quarter Results
The Company reported consolidated net income for the second
quarter ended July 29, 2017 of $112.4
million, or $1.03 per diluted
share, compared to the Company's expectations provided on
May 16, 2017 of $0.98 to
1.03 per diluted share. For the second quarter ended
July 30, 2016, the Company reported consolidated net income of
$91.4 million, or $0.82 per diluted share.
On a non-GAAP basis, the Company reported consolidated net
income for the second quarter ended July 29, 2017 of
$104.8 million, or $0.96 per diluted share, compared to the
Company's expectations provided on May 16, 2017 of
$1.02 to 1.07 per diluted share.
Second quarter 2017 non-GAAP results exclude a previously announced
corporate restructuring charge and income related to a contract
termination payment. The GAAP to non-GAAP reconciliations are
included in a table later in the release under the heading "GAAP to
Non-GAAP Reconciliations."
Net sales for the second quarter of 2017 increased 9.6% to
approximately $2.2 billion.
Consolidated same store sales increased 0.1%, compared to the
Company's guidance of an approximate 2 to 3% increase. Second
quarter 2016 consolidated same store sales increased 2.8%.
"In this very competitive and dynamic marketplace, we were able
to deliver a significant increase in our bottom line from last
year. We continued to capture market share and generated strong
results in eCommerce, footwear and golf, although sales were
pressured by weakness in hunting, licensed and athletic apparel,"
said Edward W. Stack, Chairman and
Chief Executive Officer. "By design, we will be more promotional
and increase our marketing efforts for the remainder of the year,
as we will aggressively protect our market share. We have updated
our outlook to reflect these investments. We continue to believe
retail disruption creates opportunities for us as we look
long-term."
Omni-channel Development
eCommerce sales for the second quarter of 2017 increased
approximately 19%. eCommerce penetration for the second quarter of
2017 was 9.2% of total net sales, compared to 8.5% during the
second quarter of 2016.
In the second quarter, the Company opened 13 new DICK'S Sporting
Goods stores. The Company also closed one specialty concept
store. As of July 29, 2017, the Company operated 704
DICK'S Sporting Goods stores in 47 states, with approximately 37.4
million square feet, 98 Golf Galaxy stores in 32 states, with
approximately 2.1 million square feet, and 29 Field & Stream
stores in 14 states, with approximately 1.4 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 2017 with approximately $132 million in cash
and cash equivalents and approximately $187
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
$275 million to shareholders through
share repurchases and quarterly dividends.
Total inventory increased 11.8% at the end of the second quarter
of 2017 as compared to the end of the second quarter of 2016.
The Company also amended and extended its revolving credit
facility as it increased its limit from $1
billion to $1.25 billion and
extended the maturity to August 2022
under substantially the same terms.
Year-to-Date Results
The Company reported consolidated net income for the 26 weeks
ended July 29, 2017 of $170.6 million, or $1.55 per diluted share. For the 26 weeks ended
July 30, 2016, the Company reported
consolidated net income of $148.3
million, or $1.32 per diluted
share.
On a non-GAAP basis, the Company reported consolidated net
income for the 26 weeks ended July 29,
2017 of $165.1 million, or
$1.50 per diluted share, excluding a
corporate restructuring charge, conversion costs for former Sports
Authority ("TSA") stores and income related to a contract
termination payment. The GAAP to non-GAAP reconciliations are
included in a table later in the release under the heading "GAAP to
Non-GAAP Reconciliations."
Net sales for the 26 weeks ended July 29,
2017 increased 9.8% from last year's period to approximately
$4.0 billion, reflecting the growth
of our store network and a 1.1% increase in consolidated same store
sales.
Capital Allocation
On August 10, 2017, the Company's Board of Directors
authorized and declared a quarterly dividend in the amount of
$0.17 per share on the Company's
Common Stock and Class B Common Stock. The dividend is payable in
cash on September 29, 2017 to stockholders of record at the
close of business on September 8, 2017.
During the second quarter of 2017, the Company repurchased
approximately 3.4 million shares of its common stock at an average
cost of $41.56 per share, for a total
cost of $143 million. Since the
beginning of fiscal 2013, the Company has repurchased approximately
$1.1 billion of its common stock, and
has approximately $0.9 billion
remaining under its authorization that extends through 2021.
Current 2017 Outlook
The Company's current outlook for 2017 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 2017
-
- Based on an estimated 109 to 110 million diluted shares
outstanding, the Company currently anticipates reporting earnings
per diluted share in the range of $2.85 to
3.05, which includes approximately $0.05 per diluted share for the 53rd
week. The Company's earnings per diluted share guidance is not
dependent upon share repurchases beyond the $166 million executed through the second quarter
of fiscal 2017. The Company reported earnings per diluted share of
$2.56 for the 52 weeks ended
January 28, 2017.
- The Company currently anticipates reporting non-GAAP earnings
per diluted share in the range of $2.80 to
3.00. This excludes a corporate restructuring charge, TSA
conversion costs and income related to a contract termination
payment. The Company reported non-GAAP earnings per diluted share
of $3.12 for the 52 weeks ended
January 28, 2017.
- Consolidated same store sales are currently expected to be in
the range of approximately flat to a low single-digit decline on a
52 week to 52 week comparative basis, compared to an increase of
3.5% in 2016.
- The Company expects to open approximately 43 new DICK'S
Sporting Goods stores and relocate approximately seven DICK'S
Sporting Goods stores in 2017. The Company also expects to open
approximately eight new Golf Galaxy stores, relocate one Golf
Galaxy store and open eight new Field & Stream stores adjacent
to DICK'S Sporting Goods stores. These openings include former TSA
and Golfsmith stores that the Company converted to DICK'S Sporting
Goods and Golf Galaxy stores, respectively.
- Third Quarter 2017
-
- Based on an estimated 108 million diluted shares outstanding,
the Company currently anticipates reporting earnings per diluted
share in the range of $0.22 to 0.30
in the third quarter of 2017. This is compared to earnings per
diluted share of $0.44 in the third
quarter of 2016. On a non-GAAP basis, the Company reported earnings
per diluted share of $0.48 for the 13
weeks ended October 29, 2016.
- Consolidated same store sales are currently expected to decline
in the low single-digits in the third quarter of 2017, as compared
to a 5.2% increase in the third quarter of 2016.
- The Company expects to open 15 new DICK'S Sporting Goods stores
and relocate four DICK'S Sporting Goods stores in the third quarter
of 2017. The Company also expects to relocate one Golf Galaxy store
and open six new Field & Stream stores adjacent to DICK'S
Sporting Goods stores. These openings include one former TSA store
that the Company plans to convert to a DICK'S Sporting Goods
store.
- Capital Expenditures
-
- In 2017, the Company anticipates capital expenditures to be
approximately $400 million on a net
basis and approximately $515 million
on a gross basis. In 2016, capital expenditures were $242 million on a net basis and $422 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 10109378. 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
consolidated non-GAAP net income, non-GAAP earnings per diluted
share, EBITDA, and adjusted EBITDA which management believes
provides investors with useful supplemental information to evaluate
the Company's ongoing operations and to compare with past and
future periods. 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, our plans to be more promotional and increase
our marketing efforts for the remainder of the year to protect our
market share, anticipated store openings and store relocations,
capital expenditures, 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: changes in consumer discretionary
spending; our eCommerce platform not producing the anticipated
benefits within the expected time-frame or at all; the streamlining
of the Company's vendor base and execution of the Company's new
merchandising strategy 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; changes in existing tax, labor
and other laws and regulations, including those changing tax rates
and imposing new taxes and surcharges; 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 platform, including
issues caused by high volumes of users or transactions, 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; 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 24, 2017. 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 July 29, 2017, the
Company operated more than 700 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 and Field
& Stream specialty stores, as well as DICK'S Team Sports
HQ, an all-in-one youth sports digital platform offering free
league management services, mobile apps for scheduling,
communications and live scorekeeping, custom uniforms and FanWear
and 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
|
|
|
July
29, 2017
|
|
% of
Sales
|
|
July 30,
2016
|
|
% of
Sales(1)
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,156,911
|
|
|
100.00
|
%
|
|
$
|
1,967,857
|
|
|
100.00
|
%
|
Cost of goods sold,
including occupancy and
distribution costs
|
|
1,519,689
|
|
|
70.46
|
|
|
1,370,479
|
|
|
69.64
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
637,222
|
|
|
29.54
|
|
|
597,378
|
|
|
30.36
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
470,267
|
|
|
21.80
|
|
|
441,721
|
|
|
22.45
|
|
Pre-opening
expenses
|
|
7,765
|
|
|
0.36
|
|
|
8,487
|
|
|
0.43
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
159,190
|
|
|
7.38
|
|
|
147,170
|
|
|
7.48
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
2,216
|
|
|
0.10
|
|
|
1,618
|
|
|
0.08
|
|
Other
income
|
|
(14,470)
|
|
|
(0.67)
|
|
|
(1,930)
|
|
|
(0.10)
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
|
171,444
|
|
|
7.95
|
|
|
147,482
|
|
|
7.49
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
59,059
|
|
|
2.74
|
|
|
56,065
|
|
|
2.85
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
$
|
112,385
|
|
|
5.21
|
%
|
|
$
|
91,417
|
|
|
4.65
|
%
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.04
|
|
|
|
|
$
|
0.82
|
|
|
|
Diluted
|
|
$
|
1.03
|
|
|
|
|
$
|
0.82
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
|
|
|
|
|
|
|
|
|
Basic
|
|
108,175
|
|
|
|
|
111,272
|
|
|
|
Diluted
|
|
108,679
|
|
|
|
|
112,118
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend
declared per share
|
|
$
|
0.17000
|
|
|
|
|
$
|
0.15125
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
July 29,
2017
|
|
% of
Sales(1)
|
|
July 30,
2016
|
|
%
of Sales
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
3,982,164
|
|
|
100.00
|
%
|
|
$
|
3,628,200
|
|
|
100.00
|
%
|
Cost of goods sold,
including occupancy and
distribution costs
|
2,803,076
|
|
|
70.39
|
|
|
2,535,025
|
|
|
69.87
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
1,179,088
|
|
|
29.61
|
|
|
1,093,175
|
|
|
30.13
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
909,608
|
|
|
22.84
|
|
|
840,289
|
|
|
23.16
|
|
Pre-opening
expenses
|
|
20,221
|
|
|
0.51
|
|
|
15,006
|
|
|
0.41
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
249,259
|
|
|
6.26
|
|
|
237,880
|
|
|
6.56
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
3,480
|
|
|
0.09
|
|
|
2,749
|
|
|
0.08
|
|
Other
income
|
|
(17,348)
|
|
|
(0.44)
|
|
|
(3,997)
|
|
|
(0.11)
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
|
263,127
|
|
|
6.61
|
|
|
239,128
|
|
|
6.59
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
92,547
|
|
|
2.32
|
|
|
90,834
|
|
|
2.50
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
$
|
170,580
|
|
|
4.28
|
%
|
|
$
|
148,294
|
|
|
4.09
|
%
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.56
|
|
|
|
|
$
|
1.33
|
|
|
|
Diluted
|
|
$
|
1.55
|
|
|
|
|
$
|
1.32
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
|
|
|
|
|
|
|
|
Basic
|
|
109,308
|
|
|
|
|
111,688
|
|
|
|
Diluted
|
|
110,043
|
|
|
|
|
112,697
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share
|
|
$
|
0.3400
|
|
|
|
|
$
|
0.3025
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Column does not add due to
rounding
|
DICK'S SPORTING
GOODS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED
|
(Dollars in
thousands)
|
|
|
|
July 29,
2017
|
|
July 30,
2016
|
|
January
28, 2017
|
ASSETS
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
131,615
|
|
|
$
|
112,325
|
|
|
$
|
164,777
|
|
Accounts receivable,
net
|
|
86,355
|
|
|
144,458
|
|
|
75,199
|
|
Income taxes
receivable
|
|
11,401
|
|
|
2,187
|
|
|
2,307
|
|
Inventories,
net
|
|
1,917,912
|
|
|
1,715,530
|
|
|
1,638,632
|
|
Prepaid expenses and
other current assets
|
|
130,001
|
|
|
110,269
|
|
|
114,763
|
|
Total current
assets
|
|
2,277,284
|
|
|
2,084,769
|
|
|
1,995,678
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
1,611,834
|
|
|
1,475,797
|
|
|
1,522,574
|
|
Intangible assets,
net
|
|
137,920
|
|
|
130,062
|
|
|
140,835
|
|
Goodwill
|
|
245,126
|
|
|
200,594
|
|
|
245,059
|
|
Other
assets:
|
|
|
|
|
|
|
Deferred income
taxes
|
|
11,129
|
|
|
4,805
|
|
|
45,927
|
|
Other
|
|
112,018
|
|
|
91,639
|
|
|
108,223
|
|
Total other
assets
|
|
123,147
|
|
|
96,444
|
|
|
154,150
|
|
TOTAL
ASSETS
|
|
$
|
4,395,311
|
|
|
$
|
3,987,666
|
|
|
$
|
4,058,296
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
968,396
|
|
|
$
|
790,217
|
|
|
$
|
755,537
|
|
Accrued
expenses
|
|
365,680
|
|
|
359,607
|
|
|
384,210
|
|
Deferred revenue and
other liabilities
|
|
174,758
|
|
|
153,926
|
|
|
203,788
|
|
Income taxes
payable
|
|
—
|
|
|
11,249
|
|
|
53,234
|
|
Current portion of
other long-term debt and leasing
obligations
|
666
|
|
|
612
|
|
|
646
|
|
Total current
liabilities
|
|
1,509,500
|
|
|
1,315,611
|
|
|
1,397,415
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
|
|
Revolving credit
borrowings
|
|
186,800
|
|
|
152,000
|
|
|
—
|
|
Other long-term debt
and leasing obligations
|
|
4,343
|
|
|
5,013
|
|
|
4,679
|
|
Deferred income
taxes
|
|
3,531
|
|
|
14,486
|
|
|
—
|
|
Deferred revenue and
other liabilities
|
|
769,877
|
|
|
670,956
|
|
|
726,713
|
|
Total long-term
liabilities
|
|
964,551
|
|
|
842,455
|
|
|
731,392
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
|
|
|
Common
stock
|
|
825
|
|
|
857
|
|
|
856
|
|
Class B common
stock
|
|
247
|
|
|
249
|
|
|
247
|
|
Additional paid-in
capital
|
|
1,157,480
|
|
|
1,097,205
|
|
|
1,130,830
|
|
Retained
earnings
|
|
2,087,318
|
|
|
1,851,064
|
|
|
1,956,066
|
|
Accumulated other
comprehensive loss
|
|
(78)
|
|
|
(125)
|
|
|
(132)
|
|
Treasury stock, at
cost
|
|
(1,324,532)
|
|
|
(1,119,650)
|
|
|
(1,158,378)
|
|
Total stockholders'
equity
|
|
1,921,260
|
|
|
1,829,600
|
|
|
1,929,489
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
4,395,311
|
|
|
$
|
3,987,666
|
|
|
$
|
4,058,296
|
|
|
|
|
|
|
|
|
DICK'S SPORTING
GOODS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS - UNAUDITED
|
(Dollars in
thousands)
|
|
|
|
26 Weeks
Ended
|
|
|
July 29,
2017
|
|
July 30,
2016
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
|
$
|
170,580
|
|
|
$
|
148,294
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
Depreciation and
amortization
|
|
109,085
|
|
|
96,531
|
|
Deferred income
taxes
|
|
38,262
|
|
|
9,392
|
|
Stock-based
compensation
|
|
16,029
|
|
|
16,593
|
|
Other non-cash
items
|
|
361
|
|
|
361
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts
receivable
|
|
(7,748)
|
|
|
(40,765)
|
|
Inventories
|
|
(279,280)
|
|
|
(188,343)
|
|
Prepaid expenses and
other assets
|
|
(12,986)
|
|
|
(9,162)
|
|
Accounts
payable
|
|
245,909
|
|
|
137,362
|
|
Accrued
expenses
|
|
(2,785)
|
|
|
33,261
|
|
Income taxes payable /
receivable
|
|
(62,328)
|
|
|
(17,781)
|
|
Deferred construction
allowances
|
|
63,889
|
|
|
68,311
|
|
Deferred revenue and
other liabilities
|
|
(34,496)
|
|
|
(23,427)
|
|
Net cash provided by
operating activities
|
|
244,492
|
|
|
230,627
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Capital
expenditures
|
|
(235,713)
|
|
|
(208,449)
|
|
Deposits and purchases
of other assets
|
|
(2,344)
|
|
|
(23,412)
|
|
Net cash used in
investing activities
|
|
(238,057)
|
|
|
(231,861)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Revolving credit
borrowings
|
|
1,748,700
|
|
|
1,183,000
|
|
Revolving credit
repayments
|
|
(1,561,900)
|
|
|
(1,031,000)
|
|
Payments on other
long-term debt and leasing obligations
|
|
(316)
|
|
|
(288)
|
|
Construction allowance
receipts
|
|
—
|
|
|
—
|
|
Proceeds from exercise
of stock options
|
|
16,290
|
|
|
15,978
|
|
Minimum tax
withholding requirements
|
|
(5,660)
|
|
|
(6,619)
|
|
Cash paid for treasury
stock
|
|
(166,194)
|
|
|
(107,003)
|
|
Cash dividends paid to
stockholders
|
|
(37,521)
|
|
|
(34,490)
|
|
Decrease in bank
overdraft
|
|
(33,050)
|
|
|
(25,009)
|
|
Net cash used in
financing activities
|
|
(39,651)
|
|
|
(5,431)
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH AND CASH
EQUIVALENTS
|
|
54
|
|
|
54
|
|
NET DECREASE IN CASH
AND CASH EQUIVALENTS
|
|
(33,162)
|
|
|
(6,611)
|
|
CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD
|
|
164,777
|
|
|
118,936
|
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
|
$
|
131,615
|
|
|
$
|
112,325
|
|
Store Count and
Square Footage
|
|
|
|
|
|
The stores that
opened during the second quarter of 2017 are as follows:
|
|
|
|
|
|
|
|
Store
|
|
Market
|
|
Concept
|
|
San Diego,
CA
|
|
San Diego
|
|
DICK'S Sporting
Goods
|
|
Lake City,
FL
|
|
Lake City
|
|
DICK'S Sporting
Goods
|
|
Bellingham,
WA
|
|
Bellingham
|
|
DICK'S Sporting
Goods
|
|
Tucker, GA
|
|
Atlanta
|
|
DICK'S Sporting
Goods
|
|
Chula Vista,
CA
|
|
San Diego
|
|
DICK'S Sporting
Goods
|
|
San Jose,
CA
|
|
San Jose
|
|
DICK'S Sporting
Goods
|
|
Torrance,
CA
|
|
Los
Angeles
|
|
DICK'S Sporting
Goods
|
|
Miami, FL
|
|
Miami
|
|
DICK'S Sporting
Goods
|
|
Aventura,
FL
|
|
Miami
|
|
DICK'S Sporting
Goods
|
|
Sunrise,
FL
|
|
Miami
|
|
DICK'S Sporting
Goods
|
|
Miami, FL
|
|
Miami
|
|
DICK'S Sporting
Goods
|
|
Milpitas,
CA
|
|
San
Francisco
|
|
DICK'S Sporting
Goods
|
|
Oak Ridge,
TN
|
|
Knoxville
|
|
DICK'S Sporting
Goods
|
|
|
The following
represents a reconciliation of beginning and ending stores and
square footage for the periods indicated:
|
|
Store
Count:
|
|
|
|
Fiscal
2017
|
|
Fiscal
2016
|
|
|
DICK'S Sporting
Goods(1)
|
|
Specialty Concept
Stores(1)
|
|
Total
|
|
DICK'S Sporting
Goods(1)
|
|
Specialty Concept
Stores(1)
|
|
Total
|
Beginning
stores
|
|
676
|
|
|
121
|
|
|
797
|
|
|
644
|
|
|
97
|
|
|
741
|
|
Q1 New
stores
|
|
15
|
|
|
10
|
|
|
25
|
|
|
3
|
|
|
2
|
|
|
5
|
|
Q2 New
stores
|
|
13
|
|
|
—
|
|
|
13
|
|
|
5
|
|
|
—
|
|
|
5
|
|
Closed
stores
|
|
—
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
1
|
|
|
4
|
|
Ending
stores
|
|
704
|
|
|
129
|
|
|
833
|
|
|
649
|
|
|
98
|
|
|
747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relocated
stores
|
|
2
|
|
|
—
|
|
|
2
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Square
Footage:
|
(in
millions)
|
|
|
|
DICK'S Sporting
Goods(1)
|
|
Specialty Concept
Stores(1)
|
|
Total(2)
|
Q1 2016
|
|
34.5
|
|
|
2.4
|
|
|
37.0
|
|
Q2 2016
|
|
34.6
|
|
|
2.4
|
|
|
37.1
|
|
Q3 2016
|
|
36.1
|
|
|
2.7
|
|
|
38.8
|
|
Q4 2016
|
|
36.0
|
|
|
3.2
|
|
|
39.3
|
|
Q1 2017
|
|
36.8
|
|
|
3.5
|
|
|
40.3
|
|
Q2 2017
|
|
37.4
|
|
|
3.5
|
|
|
40.9
|
|
|
|
(1)
|
Specialty concept
stores include 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
concept store reconciliations, as applicable. As of July 29,
2017, the Company operated 14 combo stores.
|
(2)
|
Column may not add
due to rounding.
|
DICK'S SPORTING
GOODS, INC.
|
GAAP to NON-GAAP
RECONCILIATIONS
|
(Dollars in
thousands, except per share amounts)
|
(unaudited)
|
|
|
13 Weeks Ended
July 29, 2017
|
|
|
|
|
|
|
|
Selling, general
and administrative expenses
|
Other
income
|
Income before
income taxes
|
Net
income
|
Earnings per
diluted share
|
GAAP Basis
|
$
|
470,267
|
|
$
|
(14,470)
|
|
$
|
171,444
|
|
$
|
112,385
|
|
$
|
1.03
|
|
% of Net
Sales
|
21.80
|
%
|
(0.67)
|
%
|
7.95
|
%
|
5.21
|
%
|
|
Corporate
restructuring charge (1)
|
(7,077)
|
|
—
|
|
7,077
|
|
4,388
|
|
|
Contract termination
payment (2)
|
—
|
|
12,000
|
|
(12,000)
|
|
(12,000)
|
|
|
Non-GAAP
Basis
|
$
|
463,190
|
|
$
|
(2,470)
|
|
$
|
166,521
|
|
$
|
104,773
|
|
$
|
0.96
|
|
% of Net
Sales
|
21.47
|
%
|
(0.11)
|
%
|
7.72
|
%
|
4.86
|
%
|
|
|
|
(1)
|
Severance, other
employee-related costs and asset write-downs related to corporate
restructuring. The provision for income taxes was calculated at
38%, which approximates the Company's blended tax rate.
|
(2)
|
Contract termination
payment. There was no related tax expense as the Company
utilized net capital loss carryforwards that were previously
subject to a valuation allowance.
|
|
26 Weeks Ended
July 29, 2017
|
|
|
|
|
|
|
|
|
Selling, general
and administrative expenses
|
Pre-opening
expenses
|
Other
income
|
Income before
income taxes
|
Net income
(4)
|
Earnings per
diluted share
|
GAAP Basis
|
$
|
909,608
|
|
$
|
20,221
|
|
$
|
(17,348)
|
|
$
|
263,127
|
|
$
|
170,580
|
|
$
|
1.55
|
|
% of Net
Sales
|
22.84
|
%
|
0.51
|
%
|
(0.44)
|
%
|
6.61
|
%
|
4.28
|
%
|
|
Corporate
restructuring charge (1)
|
(7,077)
|
|
—
|
|
—
|
|
7,077
|
|
4,388
|
|
|
TSA conversion costs
(2)
|
—
|
|
(3,474)
|
|
—
|
|
3,474
|
|
2,154
|
|
|
Contract termination
payment (3)
|
—
|
|
—
|
|
12,000
|
|
(12,000)
|
|
(12,000)
|
|
|
Non-GAAP
Basis
|
$
|
902,531
|
|
$
|
16,747
|
|
$
|
(5,348)
|
|
$
|
261,678
|
|
$
|
165,122
|
|
$
|
1.50
|
|
% of Net
Sales
|
22.66
|
%
|
0.42
|
%
|
(0.13)
|
%
|
6.57
|
%
|
4.15
|
%
|
|
|
|
(1)
|
Severance, other
employee-related costs and asset write-downs related to corporate
restructuring.
|
(2)
|
Costs related to
converting former TSA stores.
|
(3)
|
Contract termination
payment. There was no related tax expense as the Company
utilized net capital loss carryforwards that were previously
subject to a valuation allowance.
|
(4)
|
The provision for
income taxes for Non-GAAP adjustments was calculated at 38%, which
approximates the Company's blended tax rate, unless otherwise
noted.
|
|
13 Weeks Ended
October 29,
2016
|
|
|
|
|
|
|
|
Selling, general
and administrative expenses
|
Pre-opening
expenses
|
Income before
income taxes
|
Net
income
|
Earnings per
diluted share
|
GAAP Basis
|
$
|
459,782
|
|
$
|
19,304
|
|
$
|
76,270
|
|
$
|
48,914
|
|
$
|
0.44
|
|
% of Net
Sales
|
25.40
|
%
|
1.07
|
%
|
4.21
|
%
|
2.70
|
%
|
|
TSA integration costs
(1)
|
(6,491)
|
|
(1,145)
|
|
7,636
|
|
4,734
|
|
|
Non-GAAP
Basis
|
$
|
453,291
|
|
$
|
18,159
|
|
$
|
83,906
|
|
$
|
53,648
|
|
$
|
0.48
|
|
% of Net
Sales
|
25.04
|
%
|
1.00
|
%
|
4.63
|
%
|
2.96
|
%
|
|
|
|
(1)
|
Costs related to
converting former TSA stores. The provision for income taxes was
calculated at 38%, which approximated the Company's blended tax
rate.
|
|
52 Weeks Ended
January 28, 2017
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
Selling, general
and administrative expenses
|
Pre-opening
expenses
|
Income before
income taxes
|
Net income
(5)
|
Earnings per
diluted share
|
GAAP Basis
|
$
|
5,556,198
|
|
$
|
1,875,643
|
|
$
|
40,286
|
|
$
|
458,422
|
|
$
|
287,396
|
|
$
|
2.56
|
|
% of Net
Sales
|
70.14
|
%
|
23.68
|
%
|
0.51
|
%
|
5.79
|
%
|
3.63
|
%
|
|
Inventory write-down
(1)
|
(46,379)
|
|
—
|
|
—
|
|
46,379
|
|
28,755
|
|
|
Non-cash impairment
and
store closing charge
(2)
|
—
|
|
(32,821)
|
|
—
|
|
32,821
|
|
20,349
|
|
|
Non-operating
asset
impairment (3)
|
—
|
|
(7,707)
|
|
—
|
|
7,707
|
|
4,778
|
|
|
TSA and
Golfsmith
integration costs (4)
|
—
|
|
(8,545)
|
|
(5,102)
|
|
13,647
|
|
8,461
|
|
|
Non-GAAP
Basis
|
$
|
5,509,819
|
|
$
|
1,826,570
|
|
$
|
35,184
|
|
$
|
558,976
|
|
$
|
349,739
|
|
$
|
3.12
|
|
% of Net
Sales
|
69.55
|
%
|
23.06
|
%
|
0.44
|
%
|
7.06
|
%
|
4.41
|
%
|
|
|
|
(1)
|
Inventory write-down
to net realizable value in connection with the Company's new
merchandising strategy.
|
(2)
|
Included non-cash
impairment of store assets and store closing charges primarily
related to ten Golf Galaxy stores in overlapping trade areas with
former Golfsmith stores.
|
(3)
|
Non-cash impairment
charge to reduce the carrying value of a corporate aircraft held
for sale to its fair market value.
|
(4)
|
Costs related to
converting former TSA and Golfsmith stores.
|
(5)
|
The provision for
income taxes for Non-GAAP adjustments was calculated at 38%, 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
|
|
|
July 29,
2017
|
|
July 30,
2016
|
|
|
(dollars in thousands)
|
Net income
|
|
$
|
112,385
|
|
|
$
|
91,417
|
|
Provision for income
taxes
|
|
59,059
|
|
|
56,065
|
|
Interest
expense
|
|
2,216
|
|
|
1,618
|
|
Depreciation and
amortization
|
|
56,041
|
|
|
48,541
|
|
EBITDA
|
|
$
|
229,701
|
|
|
$
|
197,641
|
|
Add: Corporate
restructuring charge
|
|
6,129
|
|
|
—
|
|
Less: Contract
termination payment
|
|
(12,000)
|
|
|
—
|
|
Adjusted EBITDA, as
defined
|
|
$
|
223,830
|
|
|
$
|
197,641
|
|
|
|
|
|
|
% increase in
adjusted EBITDA
|
|
13
|
%
|
|
|
|
|
|
26 Weeks
Ended
|
|
|
July 29,
2017
|
|
July 30,
2016
|
|
|
(dollars in thousands)
|
Net income
|
|
$
|
170,580
|
|
|
$
|
148,294
|
|
Provision for income
taxes
|
|
92,547
|
|
|
90,834
|
|
Interest
expense
|
|
3,480
|
|
|
2,749
|
|
Depreciation and
amortization
|
|
109,085
|
|
|
96,531
|
|
EBITDA
|
|
$
|
375,692
|
|
|
$
|
338,408
|
|
Add: Corporate
restructuring charge
|
|
6,129
|
|
|
—
|
|
Add: TSA conversion
costs
|
|
3,474
|
|
|
—
|
|
Less: Contract
termination payment
|
|
(12,000)
|
|
|
—
|
|
Adjusted EBITDA, as
defined
|
|
$
|
373,295
|
|
|
$
|
338,408
|
|
|
|
|
|
|
% increase in
adjusted EBITDA
|
|
10
|
%
|
|
|
|
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
|
|
|
July
29,
2017
|
|
July 30,
2016
|
|
|
(dollars in thousands)
|
Gross capital
expenditures
|
|
$
|
(235,713)
|
|
|
$
|
(208,449)
|
|
Proceeds from
sale-leaseback transactions
|
|
—
|
|
|
—
|
|
Deferred construction
allowances
|
|
63,889
|
|
|
68,311
|
|
Construction
allowance receipts
|
|
—
|
|
|
—
|
|
Net capital
expenditures
|
|
$
|
(171,824)
|
|
|
$
|
(140,138)
|
|
Reconciliation of
Non-GAAP Consolidated Net Income and Earnings Per Diluted Share
Guidance
|
(Dollars in
thousands, except per share amounts)
|
|
|
|
53 Weeks Ended
February 3, 2018
|
|
|
Low-End
|
|
High-End
|
|
|
Amount
|
|
EPS
|
|
Amount
|
|
EPS
|
GAAP consolidated net
income and earnings per diluted share
|
|
$
|
311,958
|
|
|
$
|
2.85
|
|
|
$
|
333,958
|
|
|
$
|
3.05
|
|
Contract termination
payment
|
|
(12,000)
|
|
|
|
|
(12,000)
|
|
|
|
Corporate
restructuring charge
|
|
7,077
|
|
|
|
|
7,077
|
|
|
|
TSA conversion
costs
|
|
3,474
|
|
|
|
|
3,474
|
|
|
|
Tax effect of the
above items
|
|
4,009
|
|
|
|
|
4,009
|
|
|
|
Non-GAAP consolidated
net income and earnings per diluted share
|
|
$
|
306,500
|
|
|
$
|
2.80
|
|
|
$
|
328,500
|
|
|
$
|
3.00
|
|
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SOURCE DICK'S Sporting Goods, Inc.