Dick’s Sporting Goods, Inc. reported third quarter earnings tripled to $18.9 million, or 16 cents per diluted share, from $6.2 million, or 5 cents per share. Results exceeded estimated earnings expectations provided on Aug. 20 of 4 to 7 cents a share. Comps in the period gained 1.9%.

On a non-GAAP basis, which excludes merger and integration costs, year-ago earnings were $8 million, or 7 cents a share.

Dick’s SG also raised its full year estimated non-GAAP earnings range from $1.02 to $1.07 per diluted share to $1.04 to $1.09 per diluted share.

Net sales for the third quarter of 2009 increased by 7.1% to $989.8 million due primarily to a 1.9% increase in consolidated comparable store sales, the opening of new stores and the addition of e-commerce sales. The 1.9% consolidated same store sales increase consisted of a 2.2% increase in Dick’s Sporting Goods stores and a 1.5% decline in Golf Galaxy stores.

The company had estimated a 6% to 4% decline in same-store sales.

"While we are pleased with the year-over-year growth in sales and operating margin generated in the third quarter, we believe we benefited from a shift of cold weather product sales from the fourth quarter to the third quarter as a result of colder weather conditions relative to last year," said Edward W. Stack, chairman and CEO. "This was an outstanding quarter for us in a difficult economic climate. Our associates successfully managed inventory and controlled expenses while executing effective merchandising and marketing strategies."

New Stores

In the third quarter, the company opened 11 Dick’s Sporting Goods stores and relocated one Dick’s Sporting Goods store.

In the first three quarters of 2009, the company has opened 24 new Dick’s Sporting Goods stores, relocated one Dick’s Sporting Goods store, opened one new Golf Galaxy store, converted the Golf Shop to a Golf Galaxy store, closed two Chick’s Sporting Goods stores and converted the remaining Chick’s Sporting Goods stores to Dick’s Sporting Goods stores.

As of October 31, 2009, the company operated 420 Dick’s Sporting Goods stores in 40 states, with approximately 23.4 million square feet and 91 Golf Galaxy stores in 31 states, with approximately 1.5 million square feet.

Balance Sheet

Long term debt declined by $291.5 million from the end of the third quarter of 2008 to the end of the third quarter of 2009 due to the repayment of $172.5 million for the company’s senior convertible notes in the first quarter of this year and a $122.2 million decrease in revolving credit borrowings. The inventory per square foot was 8.6% less at the end of the third quarter 2009 compared to the end of the third quarter 2008.

Year-to-Date Results

The company reported consolidated non-GAAP net income for the 39 weeks ended October 31, 2009 of $74.1 million, or 63 cents per diluted share. For the 39 weeks ended Nov. 1, the company reported consolidated non-GAAP net income of $72.0 million, or 62 cents per diluted share. Non-GAAP earnings exclude merger and integration costs.

On a GAAP basis, the company reported consolidated net income for the 39 weeks ended October 31, 2009 of $68.0 million, or 58 cents per diluted share, compared to $65.7 million, or 56 cents per diluted share for the same period last year.

Net sales increased 5.3% to $3,076.2 million primarily due to the opening of new stores and the addition of e-commerce sales, partially offset by a consolidated comparable store sales decrease of 3.0%.

Current 2009 Outlook

"Looking to the fourth quarter, our estimates take into consideration the shift of cold weather product sales from the fourth quarter into the third quarter, planned increased advertising spend and the anniversary of higher levels of guns and ammo sales. Our estimates also recognize the continued uncertain consumer environment, particularly as we head into our largest quarter of the year," said Stack.

    * Full Year 2009
          o Based on an estimated 118 million diluted shares outstanding, the company currently anticipates reporting consolidated earnings per diluted share of approximately $1.04 – 1.09, excluding merger and integration costs. For the full year 2008, the company reported consolidated earnings per diluted share of $1.15, excluding a non-cash impairment charge and merger and integration costs.
          o On a GAAP basis, the company is anticipating reporting consolidated earnings per diluted share of approximately 99 cents – 1.04 in 2009 compared to a net loss of $0.36 per diluted share in 2008.
          o Comparable store sales are currently expected to decrease approximately 4 to 3% compared to a 4.8% decrease in 2008. The comparable store sales calculation for the full year 2009 includes Dick’s Sporting Goods stores and Golf Galaxy stores. The comparable store sales calculation for the full year 2008 includes Dick’s Sporting Goods stores only.
          o The company has completed its new store program, which included opening 24 new Dick’s Sporting Goods stores, relocating one Dick’s Sporting Goods store, opening one new Golf Galaxy store, converting the Golf Shop to a Golf Galaxy store, closing two Chick’s Sporting Goods stores and converting the remaining Chick’s Sporting Goods stores to Dick’s Sporting Goods stores.
    * Fourth Quarter 2009
          o Based on an estimated 120 million diluted shares outstanding, the Company anticipates reporting consolidated earnings per diluted share of approximately 41 – 46 cents per share in the fourth quarter of 2009. In the fourth quarter of 2008, the Company reported non-GAAP earnings per diluted share of 54 cents. On a GAAP basis for the fourth quarter of 2008, the Company reported a loss of 94 cents per diluted share, which included a non-cash impairment charge and merger and integration costs.
          o Comparable store sales are expected to decrease approximately 6 to 4% compared to an 8.6% decrease in the fourth quarter last year. The comparable store sales calculation for the fourth quarter in 2008 and 2009 includes Dick’s Sporting Goods stores and Golf Galaxy stores. It excludes Chick’s Sporting Goods stores converted to Dick’s Sporting Goods stores.
    * Cash Flow
          o In 2009, the company anticipates producing positive operating cash flow, net of capital expenditures, in excess of that generated in 2008. This is expected to be accomplished through continued effective inventory management and the anticipated reduction of net capital expenditures to $100 million in 2009 as compared to $115 million in 2008.

New Accounting Pronouncement

In May 2008, the FASB issued new accounting guidance, which impacts the accounting treatment for convertible debt instruments that allow for either mandatory or optional cash settlements. This accounting standard impacted the company’s senior convertible notes and required the company to recognize additional non-cash interest expense based on the market rate for similar debt instruments without the conversion feature. This guidance was effective for fiscal periods beginning in 2009 and required retrospective application. The company adopted this accounting standard in the first quarter of 2009, and accordingly, the prior periods’ financial statements included herein have been adjusted. Adoption of this standard reduced previously reported earnings per diluted share for the third quarter and full year fiscal 2008 by 1 cent to 4 cents, respectively.

  DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES                       CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED                          (In thousands, except per share data)

                                              13 Weeks Ended                              -----------------------------------------------                              October 31,     % of     November 1,     % of                                  2009       Sales     2008      Sales (1)                              -----------    -------   -----------   --------                                                         Adjusted    Net sales                   $989,816     100.00%     $924,191     100.00%    Cost of goods sold,     including occupancy     and distribution costs      722,985      73.04       671,091      72.61                              -----------    -------   -----------   --------

      GROSS PROFIT               266,831      26.96       253,100      27.39

    Selling, general and     administrative expenses     230,430      23.28       228,861      24.76    Merger and integration     costs                             -          -         3,096       0.33    Pre-opening expenses           4,645       0.47         7,541       0.82                              -----------    -------   -----------   --------

      INCOME FROM OPERATIONS      31,756       3.21        13,602       1.47

    Interest expense, net            173       0.02         4,917       0.53                              -----------    -------   -----------   --------

      INCOME BEFORE INCOME       TAXES                      31,583       3.19         8,685       0.94

    Provision for income     taxes                        12,729       1.29         2,501       0.27                              -----------    -------   -----------   --------

      NET INCOME                 $18,854       1.90%       $6,184       0.67%                              ===========    =======   ===========   ========

    EARNINGS PER COMMON SHARE:      Basic                        $0.17                    $0.06      Diluted                      $0.16                    $0.05

    WEIGHTED AVERAGE COMMON     SHARES OUTSTANDING:      Basic                      113,266                  111,906      Diluted                    118,704                  116,774