DICK’S Sporting Goods (DKS) Q4 2020 earnings summary

Executive summary

• FY2019 net sales rose 3.7% to $8.75B; consolidated same-store sales increased 3.7%, and non-GAAP diluted EPS reached a record $3.69.

• GAAP net income fell to $297.5M from $319.9M; diluted EPS was $3.34 versus $3.24.

• COVID-19 sharply reduced traffic and demand; stores closed temporarily from March 18, 2020, and FY2020 guidance was withdrawn.

Financial highlights

• Q4 FY2019 net sales were $1.96B, gross profit $563.8M, operating income $76.1M and net income $57.5M; diluted EPS was $0.61.

• FY2019 gross profit rose 4.8% to $2.55B; operating income declined to $375.6M from $444.7M.

• Adjusted for hunt restructuring, subsidiary-sale gain, aircraft impairment and litigation settlement, FY2019 non-GAAP operating income was $442.2M and diluted EPS was $3.69.

• Operating cash flow was $404.6M, down $308.1M, primarily from inventory and accounts payable changes tied to strategic category investments.

Outlook and guidance

• FY2020 outlook was withdrawn as the COVID-19 impact on results, cash flows and financial position could not be reasonably estimated.

• Before withdrawal, plans included ~9 new DICK'S stores, 6 Golf Galaxy stores, and relocations of 14 DICK'S and 3 Golf Galaxy locations.

• Planned FY2020 hunt-department removals covered ~440 additional stores, leaving the department in ~12% of remaining stores.

• Prior liquidity expectations anticipated operating cash flow and the revolving facility would cover capital requirements for at least 12 months.