DICK’S Sporting Goods (DKS) Q4 2014 earnings summary

Executive summary

• FY2013 net sales rose 6% to $6.21B and net income rose 16% to $337.6M; diluted EPS was $2.69, with the year comprising 52 weeks versus 53 weeks in FY2012.

• Growth initiatives centered on omni-channel capabilities, store expansion, customer experience, marketing and the Field & Stream concept.

Financial highlights

• Net sales were $6,213.2M versus $5,836.1M; operating income was $536.8M versus $523.7M, and net income was $337.6M versus $290.7M.

• Gross profit was $1,944.0M; gross margin was 31.29% versus 31.48%, as occupancy and shipping costs offset merchandise margin expansion.

• Adjusted net income, excluding the JJB investment recovery and aircraft impairment, was $338.0M; adjusted EBITDA was $699.6M versus $653.3M in FY2012.

• Cash from operations was $403.9M; capital expenditures were $285.7M, up from $219.0M in FY2012.

Outlook and guidance

• Long-term targets were $10B in sales and a 10.5% operating margin by end-2017.

• Plans called for more than 800 core stores by 2017 and approximately 55 Field & Stream locations, including approximately eight openings in FY2014.

• Cash flows and available credit were expected to cover current capital requirements through FY2014; faster expansion or acquisitions could require additional funding.