Dick's Sporting Goods' Sales Hit $1B

PITTSBURGH-By every measure, Dick’s Sporting Goods Inc. scored higher than guidance for the full-year and fourth quarter ended Feb. 3. Fourth-quarter net sales rose 21%, compared with the same quarter a year ago, taking the total to slightly more than $1 billion for the first time.

Calling that “a special milestone,” Edward Stack, chairman and CEO, told analysts during a conference call, “we executed well through our most important quarter, delivering earnings in excess of our guidance.” Net income for the quarter was up 33% to $67.7 million, and same-store sales rose 2%.

Ten days after the end of its fourth fiscal quarter, the locally based sporting goods retailer completed its acquisition of Golf Galaxy. The golf specialty retailer will continue to operate from its headquarters in Eden Prairie, MN, under its current name and management.

Although Golf Galaxy is still closing its books, Stack said that company’s sales were relatively flat for the year. He does expect synergies, he said, “especially as we (Dick’s) develop our private-label golf program.”

This year, the company plans to open 45 new Dick’s stores, which would take the total to 339, and 17 new Golf Galaxy units, taking the number to 82. Approximately one-third of the new Dick’s units will be in new markets, with the remainder at infill locations.

Regarding real estate, Stack said, “we still have the pick of the litter. When developers want electronics, they call Best Buy; when they want home goods, they call Bed Bath & Beyond, and, we’re the first company they call in the sporting goods business.”

Personnel at all Dick’s units have been trained for a new golf club fitting program. Asked how that was impacting sales of golf clubs, Stack said it was too soon to tell. “For the month of February,” he said, “72% of the fittings were converted into sales.”

Under Armour concept departments within Dick’s units are slated for expansion, although the number of added units is not final. Snowboard sections will expand from an existing 35 stores to about 75 this year.

Mid-morning on March 13, following the conference call, shares of DKS were trading on the NYSE at $56.19 a share up 4.3% for the day and near the 52-week high of $56.29 a share on Nov. 20, 2006. The 52-week low, $34.90 a share, occurred on July 28, 2006.