001-31463 | 16-1241537 | |
(Commission File Number) | (IRS Employer Identification No.) |
345 Court Street Coraopolis, Pennsylvania | 15108 | |
(Address of Principal Executive Offices) | (Zip Code) |
ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
ITEM 8.01. | OTHER EVENTS |
ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS |
Exhibit No. | Description | |
99.1 | Press Release dated November 28, 2018 by Dick's Sporting Goods, Inc. furnished herewith |
DICK'S SPORTING GOODS, INC. | ||
Date: November 28, 2018 | By: | /s/ LEE J. BELITSKY |
Name: | Lee J. Belitsky | |
Title: | Executive Vice President – Chief Financial Officer |
Exhibit No. | Description | |
Press Release dated November 28, 2018 by Dick's Sporting Goods, Inc. furnished herewith |
FOR IMMEDIATE RELEASE |
• | Company delivered third quarter 2018 earnings per diluted share of $0.39 compared to earnings per diluted share of $0.35 and non-GAAP earnings per diluted share of $0.30 in the third quarter of 2017 |
• | Company raises full year 2018 earnings per diluted share guidance to $3.15 to $3.25 from the previous range of $3.02 to $3.20 |
• | eCommerce sales increased 16% during the third quarter |
• | Repurchased $108 million of common stock during the quarter |
• | The Company currently anticipates reporting earnings per diluted share in the range of $3.15 to $3.25. This guidance is not dependent upon additional share repurchases. The Company reported earnings per diluted share of $3.01 for the 53 weeks ended February 3, 2018. |
• | Consolidated same store sales are currently expected to decline 3% to 4% on a 52-week to 52-week comparative basis, compared to a decline of 0.3% in 2017. |
• | Net capital expenditures are now expected to be approximately $165 million. In 2017, net capital expenditures were $373 million. |
13 Weeks Ended | ||||||||||||||
November 3, 2018 | % of Sales(2) | October 28, 2017 | % of Sales(2) | |||||||||||
Net sales | $ | 1,857,273 | 100.00 | % | $ | 1,944,187 | 100.00 | % | ||||||
Cost of goods sold, including occupancy and distribution costs (1) | 1,333,719 | 71.81 | 1,410,067 | 72.53 | ||||||||||
GROSS PROFIT | 523,554 | 28.19 | 534,120 | 27.47 | ||||||||||
Selling, general and administrative expenses | 468,691 | 25.24 | 475,899 | 24.48 | ||||||||||
Pre-opening expenses | 1,997 | 0.11 | 8,220 | 0.42 | ||||||||||
INCOME FROM OPERATIONS | 52,866 | 2.85 | 50,001 | 2.57 | ||||||||||
Interest expense | 2,606 | 0.14 | 2,839 | 0.15 | ||||||||||
Other expense (income) | 68 | — | (10,768 | ) | (0.55 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 50,192 | 2.70 | 57,930 | 2.98 | ||||||||||
Provision for income taxes | 12,365 | 0.67 | 21,017 | 1.08 | ||||||||||
NET INCOME | $ | 37,827 | 2.04 | % | $ | 36,913 | 1.90 | % | ||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||
Basic | $ | 0.39 | $ | 0.35 | ||||||||||
Diluted | $ | 0.39 | $ | 0.35 | ||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||
Basic | 96,677 | 105,466 | ||||||||||||
Diluted | 97,890 | 105,814 | ||||||||||||
Cash dividend declared per share | $ | 0.225 | $ | 0.170 | ||||||||||
(1) Cost of goods sold includes: the cost of merchandise (inclusive of vendor allowances, inventory shrinkage and inventory write-downs for the lower of cost and net realizable value); freight; distribution; shipping; and store occupancy costs. The Company defines merchandise margin as net sales less the cost of merchandise sold. | ||||||||||||||
(2) Column does not add due to rounding |
39 Weeks Ended | ||||||||||||||
November 3, 2018 | % of Sales(2) | October 28, 2017 | % of Sales(2) | |||||||||||
Net sales | $ | 5,944,480 | 100.00 | % | $ | 5,926,350 | 100.00 | % | ||||||
Cost of goods sold, including occupancy and distribution costs (1) | 4,201,277 | 70.68 | 4,213,143 | 71.09 | ||||||||||
GROSS PROFIT | 1,743,203 | 29.32 | 1,713,207 | 28.91 | ||||||||||
Selling, general and administrative expenses | 1,434,344 | 24.13 | 1,385,506 | 23.38 | ||||||||||
Pre-opening expenses | 6,135 | 0.10 | 28,441 | 0.48 | ||||||||||
INCOME FROM OPERATIONS | 302,724 | 5.09 | 299,260 | 5.05 | ||||||||||
Interest expense | 8,312 | 0.14 | 6,319 | 0.11 | ||||||||||
Other income | (1,233 | ) | (0.02 | ) | (28,117 | ) | (0.47 | ) | ||||||
INCOME BEFORE INCOME TAXES | 295,645 | 4.97 | 321,058 | 5.42 | ||||||||||
Provision for income taxes | 78,336 | 1.32 | 113,564 | 1.92 | ||||||||||
NET INCOME | $ | 217,309 | 3.66 | % | $ | 207,494 | 3.50 | % | ||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||
Basic | $ | 2.20 | $ | 1.92 | ||||||||||
Diluted | $ | 2.18 | $ | 1.91 | ||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||
Basic | 98,926 | 108,027 | ||||||||||||
Diluted | 99,878 | 108,633 | ||||||||||||
Cash dividends declared per share | $ | 0.675 | $ | 0.510 | ||||||||||
(1) Cost of goods sold includes: the cost of merchandise (inclusive of vendor allowances, inventory shrinkage and inventory write-downs for the lower of cost and net realizable value); freight; distribution; shipping; and store occupancy costs. The Company defines merchandise margin as net sales less the cost of merchandise sold. | ||||||||||||||
(2) Column does not add due to rounding |
November 3, 2018 | October 28, 2017 | February 3, 2018 | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS: | ||||||||||||
Cash and cash equivalents | $ | 92,103 | $ | 111,815 | $ | 101,253 | ||||||
Accounts receivable, net | 57,559 | 88,979 | 60,107 | |||||||||
Income taxes receivable | 10,422 | 72,911 | 4,433 | |||||||||
Inventories, net | 2,196,777 | 2,178,495 | 1,711,103 | |||||||||
Prepaid expenses and other current assets | 138,468 | 129,876 | 129,189 | |||||||||
Total current assets | 2,495,329 | 2,582,076 | 2,006,085 | |||||||||
Property and equipment, net | 1,578,313 | 1,679,872 | 1,677,340 | |||||||||
Intangible assets, net | 131,763 | 144,896 | 136,587 | |||||||||
Goodwill | 250,476 | 245,126 | 250,476 | |||||||||
Other assets: | ||||||||||||
Deferred income taxes | 11,886 | 10,425 | 13,639 | |||||||||
Other | 115,991 | 122,519 | 119,812 | |||||||||
Total other assets | 127,877 | 132,944 | 133,451 | |||||||||
TOTAL ASSETS | $ | 4,583,758 | $ | 4,784,914 | $ | 4,203,939 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Accounts payable | $ | 1,028,234 | $ | 1,061,776 | $ | 843,075 | ||||||
Accrued expenses | 350,737 | 378,477 | 354,181 | |||||||||
Deferred revenue and other liabilities | 167,781 | 161,193 | 212,080 | |||||||||
Income taxes payable | 2,078 | 488 | 10,476 | |||||||||
Current portion of other long-term debt and leasing obligations | 5,251 | 5,175 | 5,202 | |||||||||
Total current liabilities | 1,554,081 | 1,607,109 | 1,425,014 | |||||||||
LONG-TERM LIABILITIES: | ||||||||||||
Revolving credit borrowings | 382,300 | 454,700 | — | |||||||||
Other long-term debt and leasing obligations | 56,111 | 61,413 | 60,084 | |||||||||
Deferred income taxes | 14,951 | 23,710 | 10,232 | |||||||||
Deferred rent and other liabilities | 729,273 | 764,996 | 767,108 | |||||||||
Total long-term liabilities | 1,182,635 | 1,304,819 | 837,424 | |||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||
STOCKHOLDERS' EQUITY: | ||||||||||||
Common stock | 703 | 797 | 783 | |||||||||
Class B common stock | 245 | 247 | 247 | |||||||||
Additional paid-in capital | 1,204,293 | 1,166,370 | 1,177,778 | |||||||||
Retained earnings | 2,374,336 | 2,106,086 | 2,205,651 | |||||||||
Accumulated other comprehensive loss | (118 | ) | (85 | ) | (78 | ) | ||||||
Treasury stock, at cost | (1,732,417 | ) | (1,400,429 | ) | (1,442,880 | ) | ||||||
Total stockholders' equity | 1,847,042 | 1,872,986 | 1,941,501 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 4,583,758 | $ | 4,784,914 | $ | 4,203,939 | ||||||
39 Weeks Ended | ||||||||
November 3, 2018 | October 28, 2017 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 217,309 | $ | 207,494 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 178,737 | 166,521 | ||||||
Deferred income taxes | (726 | ) | 59,145 | |||||
Stock-based compensation | 31,783 | 24,762 | ||||||
Other non-cash items | 700 | 595 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (7,218 | ) | (18,145 | ) | ||||
Inventories | (466,212 | ) | (539,863 | ) | ||||
Prepaid expenses and other assets | 7,950 | (20,847 | ) | |||||
Accounts payable | 234,859 | 316,602 | ||||||
Accrued expenses | 11,152 | 23,404 | ||||||
Income taxes payable / receivable | (14,387 | ) | (123,350 | ) | ||||
Deferred construction allowances | 23,440 | 78,482 | ||||||
Deferred revenue and other liabilities | (56,859 | ) | (49,258 | ) | ||||
Net cash provided by operating activities | 160,528 | 125,542 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (135,288 | ) | (386,600 | ) | ||||
Acquisitions, net of cash acquired | — | (8,500 | ) | |||||
Deposits and purchases of other assets | — | (2,344 | ) | |||||
Net cash used in investing activities | (135,288 | ) | (397,444 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Revolving credit borrowings | 1,723,500 | 2,431,200 | ||||||
Revolving credit repayments | (1,341,200 | ) | (1,976,500 | ) | ||||
Proceeds from term loan | — | 62,492 | ||||||
Payments on other long-term debt and leasing obligations | (3,924 | ) | (1,229 | ) | ||||
Construction allowance receipts | — | — | ||||||
Proceeds from exercise of stock options | — | 16,558 | ||||||
Minimum tax withholding requirements | (5,264 | ) | (5,771 | ) | ||||
Cash paid for treasury stock | (289,623 | ) | (242,119 | ) | ||||
Cash dividends paid to stockholders | (68,139 | ) | (55,375 | ) | ||||
Decrease in bank overdraft | (49,700 | ) | (10,363 | ) | ||||
Net cash (used in) provided by financing activities | (34,350 | ) | 218,893 | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (40 | ) | 47 | |||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (9,150 | ) | (52,962 | ) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 101,253 | 164,777 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 92,103 | $ | 111,815 |
Store | Market | Concept | |||
Raleigh, NC | Raleigh / Durham | DICK'S Sporting Goods (1) | |||
North Tucson, AZ | Tucson | DICK'S Sporting Goods | |||
Sarasota, FL | Sarasota | DICK'S Sporting Goods | |||
North Port, FL | Sarasota | DICK'S Sporting Goods | |||
North Spokane, WA | Spokane | DICK'S Sporting Goods | |||
Greendale, WI | Milwaukee - Racine | DICK'S Sporting Goods (1) |
Fiscal 2018 | Fiscal 2017 | |||||||||||||||||
DICK'S Sporting Goods (1) | Specialty Concept Stores (1) | Total | DICK'S Sporting Goods (1) | Specialty Concept Stores (1) | Total | |||||||||||||
Beginning stores | 716 | 129 | 845 | 676 | 121 | 797 | ||||||||||||
Q1 New stores | 8 | — | 8 | 15 | 10 | 25 | ||||||||||||
Q2 New stores | 5 | — | 5 | 13 | — | 13 | ||||||||||||
Q3 New stores | 6 | — | 6 | 15 | 6 | 21 | ||||||||||||
Closed stores | 3 | — | 3 | — | 4 | 4 | ||||||||||||
Ending stores | 732 | 129 | 861 | 719 | 133 | 852 | ||||||||||||
Relocated stores | 4 | 1 | 5 | 6 | 1 | 7 |
DICK'S Sporting Goods (1) | Specialty Concept Stores (1) | Total (2) | |||||||
Q1 2017 | 36.8 | 3.5 | 40.3 | ||||||
Q2 2017 | 37.4 | 3.5 | 40.9 | ||||||
Q3 2017 | 38.2 | 3.7 | 41.9 | ||||||
Q4 2017 | 38.0 | 3.7 | 41.7 | ||||||
Q1 2018 | 38.4 | 3.7 | 42.1 | ||||||
Q2 2018 | 38.7 | 3.7 | 42.3 | ||||||
Q3 2018 | 38.8 | 3.6 | 42.4 |
(1) | Includes the Company's Golf Galaxy, Field & Stream and other specialty concept stores. In some markets we operate adjacent stores on the same property with a pass-through for customers. We refer to this format as a "combo store" and include combo store openings within both the DICK'S Sporting Goods and specialty concept store reconciliations, as applicable. As of November 3, 2018, the Company operated 23 combo stores. |
(2) | Amount may not recalculate due to rounding. |
13 Weeks Ended October 28, 2017 | ||||||||||||
Other income | Income before income taxes | Net income | Earnings per diluted share | |||||||||
GAAP Basis | $ | (10,768 | ) | $ | 57,930 | $ | 36,913 | $ | 0.35 | |||
% of Net Sales | (0.55 | )% | 2.98 | % | 1.90 | % | ||||||
Sales tax refund (1) | 8,104 | (8,104 | ) | (5,024 | ) | |||||||
Non-GAAP Basis | $ | (2,664 | ) | $ | 49,826 | $ | 31,889 | $ | 0.30 | |||
% of Net Sales | (0.14 | )% | 2.56 | % | 1.64 | % |
(1) | Multi-year sales tax refund. The provision for income taxes was calculated at 38%, which approximated the Company's blended tax rate. |
39 Weeks Ended October 28, 2017 | ||||||||||||||||||
Selling, general and administrative expenses | Pre-opening expenses | Other income | Income before income taxes | Net income (5) | Earnings per diluted share | |||||||||||||
GAAP Basis | $ | 1,385,506 | $ | 28,441 | $ | (28,117 | ) | $ | 321,058 | $ | 207,494 | $ | 1.91 | |||||
% of Net Sales | 23.38 | % | 0.48 | % | (0.47 | )% | 5.42 | % | 3.50 | % | ||||||||
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 | ) | |||||||||||
Sales tax refund (4) | — | — | 8,104 | (8,104 | ) | (5,024 | ) | |||||||||||
Non-GAAP Basis | $ | 1,378,429 | $ | 24,967 | $ | (8,013 | ) | $ | 311,505 | $ | 197,012 | $ | 1.81 | |||||
% of Net Sales | 23.26 | % | 0.42 | % | (0.14 | )% | 5.26 | % | 3.32 | % |
(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) | Multi-year sales tax refund. |
(5) | The provision for income taxes for non-GAAP adjustments was calculated at 38%, which approximated the Company's blended tax rate, unless otherwise noted. |
53 Weeks Ended February 3, 2018 | |||||||||||||||||||||
Cost of goods sold | Selling, general and administrative expenses | Pre-opening expenses | Other income | Income before income taxes | Net income (8) | Earnings per diluted share | |||||||||||||||
GAAP Basis | $ | 6,101,412 | $ | 1,982,363 | $ | 29,123 | $ | (31,810 | ) | $ | 501,337 | $ | 323,445 | $ | 3.01 | ||||||
% of Net Sales | 71.03 | % | 23.08 | % | 0.34 | % | (0.37 | )% | 5.84 | % | 3.77 | % | |||||||||
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 | ) | |||||||||||||
Sales tax refund (4) | — | — | — | 8,104 | (8,104 | ) | (5,024 | ) | |||||||||||||
Loyalty program enhancement costs (5) | (11,478 | ) | — | — | — | 11,478 | 7,231 | ||||||||||||||
Litigation contingency (6) | — | (6,592 | ) | — | — | 6,592 | 4,153 | ||||||||||||||
Tax Act impact (7) | — | — | — | — | — | (24 | ) | ||||||||||||||
Non-GAAP Basis | $ | 6,089,934 | $ | 1,968,694 | $ | 25,649 | $ | (11,706 | ) | $ | 509,854 | $ | 324,323 | $ | 3.01 | ||||||
% of Net Sales | 70.89 | % | 22.92 | % | 0.30 | % | (0.14 | )% | 5.94 | % | 3.78 | % |
(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) | Multi-year sales tax refund. |
(5) | Transition costs incurred to enhance the Company's Scorecard loyalty program. |
(6) | Costs related to a litigation contingency. |
(7) | Change to blended tax rate for adjustments recorded prior to enactment of the Tax Act. |
(8) | The provision for income taxes for non-GAAP adjustments was calculated at the Company's approximate blended tax rate, unless otherwise noted. |
39 Weeks Ended | ||||||||
November 3, 2018 | October 28, 2017 | |||||||
(dollars in thousands) | ||||||||
Gross capital expenditures | $ | (135,288 | ) | $ | (386,600 | ) | ||
Proceeds from sale-leaseback transactions | — | — | ||||||
Deferred construction allowances | 23,440 | 78,482 | ||||||
Construction allowance receipts | — | — | ||||||
Net capital expenditures | $ | (111,848 | ) | $ | (308,118 | ) |
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