þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 16-1241537 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Page Number | |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||||
Net sales | $ | 1,810,347 | $ | 1,642,627 | $ | 5,438,548 | $ | 5,030,914 | ||||||||
Cost of goods sold, including occupancy and distribution costs | 1,257,504 | 1,154,251 | 3,792,529 | 3,519,993 | ||||||||||||
GROSS PROFIT | 552,843 | 488,376 | 1,646,019 | 1,510,921 | ||||||||||||
Selling, general and administrative expenses | 459,782 | 395,015 | 1,300,071 | 1,151,686 | ||||||||||||
Pre-opening expenses | 19,304 | 16,280 | 34,309 | 31,836 | ||||||||||||
INCOME FROM OPERATIONS | 73,757 | 77,081 | 311,639 | 327,399 | ||||||||||||
Interest expense | 1,265 | 1,076 | 4,014 | 2,550 | ||||||||||||
Other (income) expense | (3,778 | ) | 1,185 | (7,775 | ) | (812 | ) | |||||||||
INCOME BEFORE INCOME TAXES | 76,270 | 74,820 | 315,400 | 325,661 | ||||||||||||
Provision for income taxes | 27,356 | 27,605 | 118,192 | 124,262 | ||||||||||||
NET INCOME | $ | 48,914 | $ | 47,215 | $ | 197,208 | $ | 201,399 | ||||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||||
Basic | $ | 0.44 | $ | 0.41 | $ | 1.77 | $ | 1.73 | ||||||||
Diluted | $ | 0.44 | $ | 0.41 | $ | 1.75 | $ | 1.71 | ||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
Basic | 110,607 | 114,978 | 111,328 | 116,101 | ||||||||||||
Diluted | 111,826 | 116,506 | 112,407 | 117,739 | ||||||||||||
Cash dividends declared per share | $ | 0.15125 | $ | 0.13750 | $ | 0.45375 | $ | 0.41250 |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||||
NET INCOME | $ | 48,914 | $ | 47,215 | $ | 197,208 | $ | 201,399 | ||||||||
OTHER COMPREHENSIVE (LOSS) INCOME: | ||||||||||||||||
Foreign currency translation adjustment, net of tax | (22 | ) | (16 | ) | 32 | (52 | ) | |||||||||
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME | (22 | ) | (16 | ) | 32 | (52 | ) | |||||||||
COMPREHENSIVE INCOME | $ | 48,892 | $ | 47,199 | $ | 197,240 | $ | 201,347 | ||||||||
October 29, 2016 | January 30, 2016 | October 31, 2015 | |||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 85,408 | $ | 118,936 | $ | 73,799 | |||||
Accounts receivable, net | 121,189 | 61,395 | 96,406 | ||||||||
Income taxes receivable | 32,583 | 5,432 | 8,719 | ||||||||
Inventories, net | 2,092,402 | 1,527,187 | 1,997,105 | ||||||||
Prepaid expenses and other current assets | 112,523 | 99,740 | 107,755 | ||||||||
Total current assets | 2,444,105 | 1,812,690 | 2,283,784 | ||||||||
Property and equipment, net | 1,492,274 | 1,347,885 | 1,341,166 | ||||||||
Intangible assets, net | 137,155 | 109,440 | 109,827 | ||||||||
Goodwill | 200,594 | 200,594 | 200,594 | ||||||||
Other assets: | |||||||||||
Deferred income taxes | 5,345 | 6,165 | 20,066 | ||||||||
Other | 102,733 | 82,562 | 73,912 | ||||||||
Total other assets | 108,078 | 88,727 | 93,978 | ||||||||
TOTAL ASSETS | $ | 4,382,206 | $ | 3,559,336 | $ | 4,029,349 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accounts payable | $ | 1,031,587 | $ | 677,864 | $ | 941,973 | |||||
Accrued expenses | 375,553 | 289,001 | 345,052 | ||||||||
Deferred revenue and other liabilities | 146,585 | 184,386 | 133,593 | ||||||||
Income taxes payable | — | 39,835 | — | ||||||||
Current portion of other long-term debt and leasing obligations | 615 | 589 | 575 | ||||||||
Total current liabilities | 1,554,340 | 1,191,675 | 1,421,193 | ||||||||
LONG-TERM LIABILITIES: | |||||||||||
Revolving credit borrowings | 260,900 | — | 342,400 | ||||||||
Other long-term debt and leasing obligations | 4,861 | 5,324 | 5,477 | ||||||||
Deferred income taxes | 8,252 | 6,454 | — | ||||||||
Deferred revenue and other liabilities | 683,988 | 566,696 | 536,973 | ||||||||
Total long-term liabilities | 958,001 | 578,474 | 884,850 | ||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
STOCKHOLDERS' EQUITY: | |||||||||||
Common stock | 860 | 869 | 883 | ||||||||
Class B common stock | 247 | 249 | 249 | ||||||||
Additional paid-in capital | 1,114,622 | 1,063,705 | 1,053,748 | ||||||||
Retained earnings | 1,882,934 | 1,737,214 | 1,623,962 | ||||||||
Accumulated other comprehensive loss | (147 | ) | (179 | ) | (125 | ) | |||||
Treasury stock, at cost | (1,128,651 | ) | (1,012,671 | ) | (955,411 | ) | |||||
Total stockholders' equity | 1,869,865 | 1,789,187 | 1,723,306 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 4,382,206 | $ | 3,559,336 | $ | 4,029,349 | |||||
Accumulated | |||||||||||||||||||||||||||||||||
Class B | Additional | Other | |||||||||||||||||||||||||||||||
Common Stock | Common Stock | Paid-In | Retained | Comprehensive | Treasury | ||||||||||||||||||||||||||||
Shares | Dollars | Shares | Dollars | Capital | Earnings | Loss | Stock | Total | |||||||||||||||||||||||||
BALANCE, January 30, 2016 | 86,850,630 | $ | 869 | 24,900,870 | $ | 249 | $ | 1,063,705 | $ | 1,737,214 | $ | (179 | ) | $ | (1,012,671 | ) | $ | 1,789,187 | |||||||||||||||
Exchange of Class B common stock for common stock | 190,000 | 2 | (190,000 | ) | (2 | ) | — | — | — | — | — | ||||||||||||||||||||||
Exercise of stock options | 1,212,423 | 12 | — | — | 24,938 | — | — | — | 24,950 | ||||||||||||||||||||||||
Restricted stock vested | 428,673 | 4 | — | — | (4 | ) | — | — | — | — | |||||||||||||||||||||||
Minimum tax withholding requirements | (146,643 | ) | (1 | ) | — | — | (6,908 | ) | — | — | — | (6,909 | ) | ||||||||||||||||||||
Net income | — | — | — | — | — | 197,208 | — | — | 197,208 | ||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 24,746 | — | — | — | 24,746 | ||||||||||||||||||||||||
Total tax benefit from exercise of stock options | — | — | — | — | 8,145 | — | — | — | 8,145 | ||||||||||||||||||||||||
Foreign currency translation adjustment, net of taxes of $19 | — | — | — | — | — | — | 32 | — | 32 | ||||||||||||||||||||||||
Purchase of shares for treasury | (2,580,954 | ) | (26 | ) | — | — | — | — | — | (115,980 | ) | (116,006 | ) | ||||||||||||||||||||
Cash dividends declared | — | — | — | — | — | (51,488 | ) | — | — | (51,488 | ) | ||||||||||||||||||||||
BALANCE, October 29, 2016 | 85,954,129 | $ | 860 | 24,710,870 | $ | 247 | $ | 1,114,622 | $ | 1,882,934 | $ | (147 | ) | $ | (1,128,651 | ) | $ | 1,869,865 |
39 Weeks Ended | |||||||
October 29, 2016 | October 31, 2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 197,208 | $ | 201,399 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 149,131 | 136,683 | |||||
Deferred income taxes | 2,618 | (11,112 | ) | ||||
Stock-based compensation | 24,746 | 21,687 | |||||
Excess tax benefit from exercise of stock options | (8,620 | ) | (6,308 | ) | |||
Other non-cash items | 541 | 442 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (38,002 | ) | (22,556 | ) | |||
Inventories | (565,215 | ) | (606,338 | ) | |||
Prepaid expenses and other assets | (10,931 | ) | (18,685 | ) | |||
Accounts payable | 342,369 | 324,832 | |||||
Accrued expenses | 67,986 | 38,817 | |||||
Income taxes payable / receivable | (58,841 | ) | (36,424 | ) | |||
Deferred construction allowances | 114,158 | 118,647 | |||||
Deferred revenue and other liabilities | (32,686 | ) | (25,215 | ) | |||
Net cash provided by operating activities | 184,462 | 115,869 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | (307,302 | ) | (273,962 | ) | |||
Deposits and purchases of other assets | (41,946 | ) | (2,406 | ) | |||
Net cash used in investing activities | (349,248 | ) | (276,368 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Revolving credit borrowings | 1,738,200 | 1,019,100 | |||||
Revolving credit repayments | (1,477,300 | ) | (676,700 | ) | |||
Payments on other long-term debt and leasing obligations | (437 | ) | (398 | ) | |||
Construction allowance receipts | — | — | |||||
Proceeds from exercise of stock options | 24,950 | 18,668 | |||||
Excess tax benefit from exercise of stock options | 8,620 | 6,309 | |||||
Minimum tax withholding requirements | (6,909 | ) | (7,703 | ) | |||
Cash paid for treasury stock | (116,006 | ) | (300,000 | ) | |||
Cash dividends paid to stockholders | (51,246 | ) | (49,235 | ) | |||
Increase in bank overdraft | 11,354 | 2,630 | |||||
Net cash provided by financing activities | 131,226 | 12,671 | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 32 | (52 | ) | ||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (33,528 | ) | (147,880 | ) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 118,936 | 221,679 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 85,408 | $ | 73,799 | |||
Supplemental disclosure of cash flow information: | |||||||
Accrued property and equipment | $ | 60,309 | $ | 65,707 | |||
Cash paid for interest | $ | 3,038 | $ | 1,761 | |||
Cash paid for income taxes | $ | 179,930 | $ | 170,752 |
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued) |
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued) |
39 Weeks Ended | ||||||||
October 29, 2016 | October 31, 2015 | |||||||
Accrued store closing and relocation reserves, beginning of period | $ | 11,702 | $ | 12,785 | ||||
Expense charged to earnings | 3,039 | 3,451 | ||||||
Cash payments | (4,121 | ) | (3,427 | ) | ||||
Interest accretion and other changes in assumptions | (697 | ) | (115 | ) | ||||
Accrued store closing and relocation reserves, end of period | 9,923 | 12,694 | ||||||
Less: current portion of accrued store closing and relocation reserves | (4,623 | ) | (4,577 | ) | ||||
Long-term portion of accrued store closing and relocation reserves | $ | 5,300 | $ | 8,117 |
13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||||
Net income | $ | 48,914 | $ | 47,215 | $ | 197,208 | $ | 201,399 | ||||||||
Weighted average common shares outstanding - basic | 110,607 | 114,978 | 111,328 | 116,101 | ||||||||||||
Dilutive effect of stock-based awards | 1,219 | 1,528 | 1,079 | 1,638 | ||||||||||||
Weighted average common shares outstanding - diluted | 111,826 | 116,506 | 112,407 | 117,739 | ||||||||||||
Earnings per common share - basic | $ | 0.44 | $ | 0.41 | $ | 1.77 | $ | 1.73 | ||||||||
Earnings per common share - diluted | $ | 0.44 | $ | 0.41 | $ | 1.75 | $ | 1.71 | ||||||||
Anti-dilutive stock-based awards excluded from diluted calculation | 921 | 1,405 | 2,129 | 1,181 |
Level 1: | Observable inputs such as quoted prices in active markets; |
Level 2: | Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and |
Level 3: | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued) |
Level 1 | |||||||
Description | October 29, 2016 | January 30, 2016 | |||||
Assets: | |||||||
Deferred compensation plan assets held in trust (1) | $ | 63,190 | $ | 53,040 | |||
Total assets | $ | 63,190 | $ | 53,040 | |||
(1) | Consists of investments in various mutual funds made by eligible individuals as part of the Company's deferred compensation plans. |
▪ | The dependence of our business on consumer discretionary spending; |
▪ | Intense competition in the sporting goods industry and in retail; |
▪ | Our ability to predict or effectively react to changes in consumer demand or shopping patterns; |
▪ | Lack of available retail store sites on terms acceptable to us, rising real estate prices and other costs and risks relating to a brick and mortar retail store model; |
▪ | Omni-channel growth and the transition to our eCommerce platform producing the anticipated benefits within the expected time-frame or at all; |
▪ | Our pursuit of strategic investments or acquisitions, including the timing and costs of such investments and acquisitions and the integration of acquired businesses and / or companies being more difficult, time-consuming, or costly than expected; |
▪ | Unauthorized disclosure of sensitive or confidential customer information; |
▪ | Risks associated with our private brand offerings and new retail concept stores; |
▪ | Disruption of or other problems with the services provided by our current primary eCommerce services provider; |
▪ | Our ability to access adequate capital to operate and expand our business and to respond to changing business and economic conditions; |
▪ | Risks and costs relating to changing laws and regulations affecting our business, including consumer products, firearms and ammunition, data protection and privacy; |
▪ | Our relationships with our vendors or disruptions in our or our vendors' supply chains, which could be caused by foreign trade issues, currency exchange rate fluctuations, increasing prices for raw materials or foreign political instability; |
▪ | Litigation risks for which we may not have sufficient insurance or other coverage; |
▪ | Product costs being adversely affected by foreign trade issues, currency exchange rate fluctuations, increasing prices for raw materials, political instability or other reasons; |
▪ | Our ability to attract, train, engage and retain qualified leaders and associates and the loss of Mr. Edward Stack as our Chairman and Chief Executive Officer; |
▪ | Our ability to secure and protect our trademarks and other intellectual property and defend claims of intellectual property infringement; |
▪ | Disruption of or other problems with our information systems; |
▪ | Disruption at our distribution facilities; |
▪ | Wage increases, which could adversely affect our financial results; |
▪ | Performance of professional sports teams, professional team lockouts or strikes, retirement or scandal involving sports superstars; |
▪ | Weather-related disruptions and the seasonality of our business, as well as the current geographic concentration of Dick's Sporting Goods stores; |
▪ | We are controlled by our Chairman and Chief Executive Officer and his relatives, whose interests may differ from those of our other stockholders; |
▪ | Our current anti-takeover provisions, which could prevent or delay a change in control of the Company; and |
▪ | Our current intention to issue quarterly cash dividends, and our repurchase activity, if any, pursuant to our share repurchase program. |
▪ | Consolidated same store sales performance – Our management considers same store sales, which consists of both brick and mortar and eCommerce sales, to be an important indicator of our current performance. Same store sales results are important to leverage our costs, which include occupancy costs, store payroll and other store expenses. Same store sales also have a direct impact on our total net sales, cash and working capital. A store is included in the same store sales calculation during the same fiscal period that it commences its 14th full month of operations. Stores that were closed or relocated during the applicable period have been excluded from same store sales. Each relocated store is returned to the same store sales base during the fiscal period that it commences its 14th full month of operations at the new location. See further discussion of our consolidated same store sales in the "Results of Operations and Other Selected Data" section herein. |
▪ | Operating cash flow – Cash flow generation supports the general operating needs of the Company and funds capital expenditures related to its omni-channel platform, distribution and administrative facilities, costs associated with continued improvement of information technology tools, costs associated with potential strategic acquisitions or investments that may arise from time to time and stockholder return initiatives, including cash dividends and share repurchases. We typically generate significant positive operating cash flows and proportionately higher net income levels in our fiscal fourth quarter in connection with the holiday selling season and in part to sales of cold weather sporting goods and apparel. See further discussion of the Company's cash flows in the "Liquidity and Capital Resources and Changes in Financial Condition" section herein. |
▪ | Quality of merchandise offerings – To measure acceptance of its merchandise offerings, the Company monitors sell-throughs, inventory turns, gross margins and markdown rates on a department and style level. This analysis helps the Company manage inventory levels to reduce cash flow requirements and deliver optimal gross margins by improving merchandise flow and establishing appropriate price points to minimize markdowns. |
▪ | Store productivity – To assess store-level performance, the Company monitors various indicators, including new store productivity, sales per square foot, store operating contribution margin and store cash flow. |
▪ | Earnings per diluted share of $0.44 in the current quarter increased compared to earnings per diluted share of $0.41 during the third quarter of 2015. |
▪ | Net income in the current quarter includes $4.7 million, net of tax, or $0.04 per diluted share, of costs incurred by the Company to convert 22 The Sports Authority ("TSA") stores to Dick's Sporting Goods stores. |
▪ | Net income in the third quarter of 2015 included $4.7 million, net of tax, or $0.04 per diluted share, related to a litigation settlement charge. |
▪ | Net sales increased 10% to $1.8 billion in the current quarter compared to the third quarter of 2015, due primarily to the growth of our store network and a 5.2% increase in consolidated same store sales. |
▪ | eCommerce sales penetration in the current quarter increased to 9.6% of total net sales compared to 8.0% in the third quarter of 2015. |
▪ | Gross profit increased to 30.54% as a percentage of net sales in the current quarter from 29.73% during the third quarter of 2015. |
▪ | Selling, general and administrative expenses increased 16% to $459.8 million in the current quarter compared to the third quarter of 2015. |
▪ | Other income increased to $3.8 million in the current quarter compared to $1.2 million of expense during the third quarter of 2015. The Company recorded a $2.9 million benefit related to a multi-year sales tax refund in the current quarter. |
▪ | In the third quarter of 2016, the Company: |
▪ | Declared and paid a quarterly cash dividend in the amount of $0.15125 per share of common stock and Class B common stock. |
▪ | Repurchased approximately 0.2 million shares of common stock for $9.0 million. |
▪ | The following table summarizes store openings and closings for the periods indicated: |
39 Weeks Ended October 29, 2016 | 39 Weeks Ended October 31, 2015 | ||||||||||||||||
Dick's Sporting Goods | Specialty Store Concepts (1) | Total | Dick's Sporting Goods | Specialty Store Concepts (1) | Total | ||||||||||||
Beginning stores | 644 | 97 | 741 | 603 | 91 | 694 | |||||||||||
Q1 New stores | 3 | 2 | 5 | 9 | 1 | 10 | |||||||||||
Q2 New stores | 5 | — | 5 | 7 | 1 | 8 | |||||||||||
Q3 New stores | 27 | 9 | 36 | 27 | 9 | 36 | |||||||||||
Ending stores | 679 | 108 | 787 | 646 | 102 | 748 | |||||||||||
Closed stores | 3 | 2 | 5 | 1 | 3 | 4 | |||||||||||
Ending stores | 676 | 106 | 782 | 645 | 99 | 744 | |||||||||||
Relocated stores | 9 | — | 9 | 6 | 1 | 7 |
(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 store concept reconciliations, as applicable. As of October 29, 2016, the Company operated 74 Golf Galaxy stores and 27 Field & Stream stores. |
Basis Point Increase / (Decrease) in Percentage of Net Sales from Prior Year 2015-2016 | |||||||
13 Weeks Ended | |||||||
October 29, 2016 | October 31, 2015 | ||||||
Net sales (1) | 100.00 | % | 100.00 | % | N/A | ||
Cost of goods sold, including occupancy and distribution costs (2) | 69.46 | 70.27 | (81) | ||||
Gross profit | 30.54 | 29.73 | 81 | ||||
Selling, general and administrative expenses (3) | 25.40 | 24.05 | 135 | ||||
Pre-opening expenses (4) | 1.07 | 0.99 | 8 | ||||
Income from operations | 4.07 | 4.69 | (62) | ||||
Interest expense | 0.07 | 0.07 | — | ||||
Other (income) expense | (0.21 | ) | 0.07 | (28) | |||
Income before income taxes | 4.21 | 4.55 | (34) | ||||
Provision for income taxes | 1.51 | 1.68 | (17) | ||||
Net income | 2.70 | % | 2.87 | % | (17) | ||
Other Data: | |||||||
Consolidated same store sales increase | 5.2 | % | 0.4 | % | |||
Number of stores at end of period (5) | 782 | 744 | |||||
Total square feet at end of period (5) | 38,788,672 | 36,775,761 |
Basis Point Increase / (Decrease) in Percentage of Net Sales from Prior Year 2015-2016 (A) | |||||||
39 Weeks Ended | |||||||
October 29, 2016 (A) | October 31, 2015 (A) | ||||||
Net sales (1) | 100.00 | % | 100.00 | % | N/A | ||
Cost of goods sold, including occupancy and distribution costs (2) | 69.73 | 69.97 | (24) | ||||
Gross profit | 30.27 | 30.03 | 24 | ||||
Selling, general and administrative expenses (3) | 23.90 | 22.89 | 101 | ||||
Pre-opening expenses (4) | 0.63 | 0.63 | — | ||||
Income from operations | 5.73 | 6.51 | (78) | ||||
Interest expense | 0.07 | 0.05 | 2 | ||||
Other income | (0.14 | ) | (0.02 | ) | (12) | ||
Income before income taxes | 5.80 | 6.47 | (67) | ||||
Provision for income taxes | 2.17 | 2.47 | (30) | ||||
Net income | 3.63 | % | 4.00 | % | (37) | ||
Other Data: | |||||||
Consolidated same store sales increase | 2.9 | % | 0.9 | % | |||
Number of stores at end of period (5) | 782 | 744 | |||||
Total square feet at end of period (5) | 38,788,672 | 36,775,761 |
(A) | Column does not add due to rounding. |
(1) | Revenue from retail sales is recognized at the point of sale, net of sales tax. Revenue from eCommerce sales is recognized upon shipment of merchandise. Service-related revenue is recognized as the services are performed. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded. Revenue from gift cards and returned merchandise credits (collectively the "cards") is deferred and recognized upon the redemption of the cards. These cards have no expiration date. Income from unredeemed cards is recognized on the unaudited Consolidated Statements of Income within selling, general and administrative expenses at the point at which redemption becomes remote. The Company performs an evaluation of the aging of the unredeemed cards, based on the elapsed time from the date of original issuance, to determine when redemption becomes remote. |
(2) | Cost of goods sold includes: the cost of merchandise (inclusive of vendor allowances, inventory shrinkage and inventory write-downs for the lower of cost or market); freight; distribution; shipping; and store occupancy costs. The Company defines merchandise margin as net sales less the cost of merchandise sold. Store occupancy costs include rent, common area maintenance charges, real estate and other asset-based taxes, general maintenance, utilities, depreciation, fixture lease expenses and certain insurance expenses. |
(3) | Selling, general and administrative expenses include store and field support payroll and fringe benefits, advertising, bank card charges, information systems, marketing, legal, accounting, other store expenses and all expenses associated with operating the Company's corporate headquarters. |
(4) | Pre-opening expenses, which consist primarily of rent, marketing, payroll and recruiting costs, are expensed as incurred. Rent is recognized within pre-opening expense from the date of building turnover to the Company through the date of store opening. |
(5) | Includes Dick's Sporting Goods, Golf Galaxy, Field & Stream and other specialty concept stores. |
October 29, 2016 | October 31, 2015 | ||||||
Funds drawn on Credit Agreement | $ | 1,738,200 | $ | 1,019,100 | |||
Number of days with outstanding balance on Credit Agreement | 163 days | 94 days | |||||
Maximum daily amount outstanding under Credit Agreement | $ | 298,700 | $ | 342,400 | |||
October 29, 2016 | October 31, 2015 | ||||||
Outstanding borrowings under Credit Agreement | $ | 260,900 | $ | 342,400 | |||
Cash and cash equivalents | $ | 85,408 | $ | 73,799 | |||
Remaining borrowing capacity under Credit Agreement | $ | 724,469 | $ | 643,569 | |||
Outstanding letters of credit under Credit Agreement | $ | 14,631 | $ | 14,031 | |||
39 Weeks Ended | |||||||
October 29, 2016 | October 31, 2015 | ||||||
Net cash provided by operating activities | $ | 184,462 | $ | 115,869 | |||
Net cash used in investing activities | (349,248 | ) | (276,368 | ) | |||
Net cash provided by financing activities | 131,226 | 12,671 | |||||
Effect of exchange rate changes on cash and cash equivalents | 32 | (52 | ) | ||||
Net decrease in cash and cash equivalents | $ | (33,528 | ) | $ | (147,880 | ) |
▪ | Changes in inventory and accounts payable increased operating cash flows by $58.7 million compared to the prior year, primarily due to timing of inventory receipts. |
▪ | Changes in accrued expenses increased operating cash flows by $29.2 million compared to the prior year, primarily due to lower incentive compensation accruals in fiscal 2015 that were subsequently paid during the first quarter of fiscal 2016, compared to those balances accrued at the end of fiscal 2014 and subsequently paid during the first quarter of fiscal 2015. |
▪ | Changes in accounts receivable decreased operating cash flows by $15.4 million compared to the prior year, primarily due to timing of collections associated with vendor funded store initiatives. |
Period | Total Number of Shares Purchased (a) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) | Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs | ||||||||||
July 31, 2016 to August 27, 2016 | 174,980 | $ | 51.53 | 174,726 | $ | 1,071,115,531 | ||||||||
August 28, 2016 to October 1, 2016 | 4,154 | $ | 59.03 | — | $ | 1,071,115,531 | ||||||||
October 2, 2016 to October 29, 2016 | 567 | $ | 55.93 | — | $ | 1,071,115,531 | ||||||||
Total | 179,701 | $ | 51.72 | 174,726 |
(a) | Includes shares withheld from employees to satisfy minimum tax withholding obligations associated with the vesting of restricted stock during the period. |
(b) | Shares repurchased as part of the Company's previously announced five-year $1 billion share repurchase program, authorized by the Board of Directors on March 7, 2013. On March 16, 2016, the Company's Board of Directors authorized an additional five-year share repurchase program of up to $1 billion of the Company's common stock. The Company will continue to purchase under the 2013 program until it is exhausted or expired. |
DICK'S SPORTING GOODS, INC. | |||||
By: | /s/ EDWARD W. STACK | ||||
Edward W. Stack | |||||
Chairman and Chief Executive Officer | |||||
By: | /s/ LEE J. BELITSKY | ||||
Lee J. Belitsky | |||||
Executive Vice President – Chief Financial Officer | |||||
(principal financial and accounting officer) |
Exhibit Number | Description of Exhibit | Method of Filing | ||
10.1 | Separation Agreement and General Release between the Company and Teri L. List-Stoll | Filed herewith | ||
10.2 | Offer Letter between the Company and Holly R. Tyson, Chief Human Resources Officer | Filed herewith | ||
10.3 | Offer Letter between the Company and Lee J. Belitsky, Executive Vice President - Chief Financial Officer | Filed herewith | ||
31.1 | Certification of Edward W. Stack, Chairman and Chief Executive Officer, dated as of November 21, 2016 and made pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | ||
31.2 | Certification of Lee J. Belitsky, Executive Vice President - Chief Financial Officer, dated as of November 21, 2016 and made pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | ||
32.1 | Certification of Edward W. Stack, Chairman and Chief Executive Officer, dated as of November 21, 2016 and made pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished herewith | ||
32.2 | Certification of Lee J. Belitsky, Executive Vice President - Chief Financial Officer, dated as of November 21, 2016 and made pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished herewith | ||
101.INS | XBRL Instance Document | Filed herewith | ||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith | ||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | Filed herewith | ||
101.DEF | XBRL Taxonomy Definition Linkbase Document | Filed herewith | ||
101.LAB | XBRL Taxonomy Label Linkbase Document | Filed herewith | ||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | Filed herewith | ||
(i) | $750,000 of the Severance shall be payable in 26 installments of $28,846.16 each. These Severance installments shall be paid every two weeks beginning on Employer’s first regular pay date after the Effective Date. |
(ii) | $17,000.00 of the Severance shall be paid in a single lump sum payment on the first regular pay date after the Effective Date. |
TERI L. LIST-STOLL | DICK’S SPORTING GOODS, INC. | |
/s/ TERI L. LIST-STOLL | /s/ HOLLY R. TYSON | |
Holly R. Tyson Chief Human Resources Officer | ||
Date: August 31, 2016 | Date: September 1, 2016 |
www.DicksSportingGoods.com | 345 Court Street · Coraopolis, PA 15108 |
Main Phone: 724-273-3400 |
• | Non-Compete Agreement |
• | Sign-on Bonus Agreement |
• | Relocation Agreement |
/s/ EDWARD W. STACK | ||
Edward W. Stack | ||
Chairman & Chief Executive Officer |
/s/ HOLLY R. TYSON | June 20, 2016 | |
Signature | Date |
www.DicksSportingGoods.com | 345 Court Street · Coraopolis, PA 15108 |
Main Phone: 724-273-3400 |
/s/ ANDRÉ J. HAWAUX | ||
André J. Hawaux | ||
Executive Vice President, Chief Operating Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Dick's Sporting Goods, Inc. (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ EDWARD W. STACK | Date: November 21, 2016 |
Edward W. Stack | |
Chairman and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Dick's Sporting Goods, Inc. (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ LEE J. BELITSKY | Date: November 21, 2016 |
Lee J. Belitsky | |
Executive Vice President – Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ EDWARD W. STACK | Date: November 21, 2016 |
Edward W. Stack | |
Chairman and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ LEE J. BELITSKY | Date: November 21, 2016 |
Lee J. Belitsky | |
Executive Vice President – Chief Financial Officer |
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