DICK'S Sporting Goods Reports Second Quarter Results
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 RelationsDICK'S Sporting Goods, Inc.[email protected](724) 273-3400
Media Relations:(724) 273-5552 or [email protected]
|
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 |
% ofSales | |||||||||||
|
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.