Highlights From Dick's Sporting Goods (DKS) Q2 Conference Call; Anticipating Better Earnings And Same Store Sales Than Originally Planned

August 20, 2009 3:26 PM EDT

This morning, Dick's Sporting Goods, Inc. (NYSE: DKS) reports Q2 EPS of $0.36, 5 cents better than the analyst estimate of $0.31. Revenue for the quarter was $1.126 billion, versus the consensus of $1.12 bllion.

Same store sales fell 4.1% during the quarter.

Sees Q3 EPS of $0.04-$0.07, versus the consensus of $0.04. Same store sales are expected to be down 4-6%.

Reaffirms its FY09 same store sales guidance: down 4-5%. Raises its FY09 EPS guidance from $0.88-$1.00 to $1.02-$1.07.

DKS Q2 conference call highlights:

• Net sales for the second quarter of '09 increased by 3.7% to $1.13 billion due primarily to the opening of new stores and the addition of e-commerce sales, partially offset by a 4.1% decrease in comparable store sales.
  
• A 4.1% consolidated same store sales decline consisted of 3.2% decrease in Dick's Sporting Goods stores and an 11.1% decline in the Golf Galaxy stores.
  
• The performance, which was better than our previous expectations was driven by our effective traffic driving marketing and merchandizing strategy, inventory management and expense controls.
  
• Our inventory levels were under tight control, down 5.5% per square foot at the end of the second quarter 2009, as compared to the end of the second quarter of '08 on a consolidated basis.
  
• Looking to the rest of 2009, we are increasing the expected number of new stores as well as raising our earnings guidance and expected same store sales.
  
• We are going to bring our '09 total new stores to approximately 24.
  
• We're anticipating a comp store sales decline of approximately 6% to negative 4% in the third quarter, versus a 2.8% decline in the third quarter of last year.
  
• We at Dick's Sporting Goods are cautiously optimistic about our business.
  
• We generated higher than anticipated sales and earnings in the second quarter of this year.
  
• We remained disciplined in our inventory and expense management. We are progressing in the improvement of our Golf Galaxy business.
  
• We're now anticipating better earnings and same store sales than originally planned and we are accelerating our new store development plan and other infrastructure investments as we grow the business and capture market share.
  
• We ended the quarter with $19.5 million in outstanding borrowings on our $440 million line of credit even after repayment of $172.5 million from our senior convertible notes in the first quarter of this year. Our borrowing rate is LIBOR plus 75 basis points and averaged 1.32% in the second quarter.
  
• In 2009, we're expecting net capital expenditures to decline to approximately $70 million or approximately $110 million on a gross basis.

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