FOR IMMEDIATE RELEASE

DICK'S Sporting Goods Reports Record Quarterly Sales and Earnings in Second Quarter 2021; Delivers 19.2% Increase in Same Store Sales, Raises Full Year Guidance and Enhances 2021 Capital Allocation Plan

  • Net sales for the second quarter of 2021 increased 20.7% compared to the second quarter of 2020 and increased 45.0% compared to the second quarter of 2019
  • Company delivered second quarter 2021 earnings per diluted share of $4.53 and non-GAAP earnings per diluted share of $5.08, up 45% and 58% respectively versus earnings per diluted share of $3.12 and non-GAAP earnings per diluted share of $3.21 during the second quarter of 2020
  • Company announces a special dividend of $5.50 per share, a 21% increase in its quarterly dividend to $0.4375 per share and an increase in its planned share repurchases to a minimum of $400 million
  • Company raises its full year 2021 earnings per diluted share guidance to $11.00 to 11.45 and raises its full year 2021 non-GAAP earnings per diluted share guidance to $12.45 to 12.95

PITTSBURGH, August 25, 2021 - DICK'S Sporting Goods, Inc. (NYSE: DKS), the largest U.S. based full-line omni- channel sporting goods retailer, today reported sales and earnings results for the second quarter ended July 31, 2021.

Second Quarter Results

Net sales for the second quarter of 2021 were $3.27 billion, an increase of 20.7% compared to the second quarter of 2020 and a 45.0% increase compared to the second quarter of 2019. Consolidated same store sales for the second quarter of 2021 increased 19.2%, which followed consolidated same store sales increases of 20.7% in the second quarter of 2020 and 3.2% in the second quarter of 2019. eCommerce sales increased 111% compared to the second quarter of 2019 and as planned, decreased 28% compared to the second quarter of 2020, which included a period of temporary store closures. eCommerce penetration has grown from 12% of total net sales in the second quarter of 2019 to 18% for the second quarter of 2021. eCommerce penetration was approximately 30% in the second quarter of 2020.

Driven by strong sales and gross margin rate expansion, the Company reported consolidated net income for the second quarter ended July 31, 2021 of $495.5 million, or $4.53 per diluted share. The Company reported consolidated net income for the second quarter ended August 1, 2020 of $276.8 million, or $3.12 per diluted share, which included approximately $14 million of pre-tax expenses in response to COVID-19. The Company reported consolidated net income for the second quarter ended August 3, 2019 of $112.5 million, or $1.26 per diluted share.

On a non-GAAP basis, the Company reported consolidated net income for the quarter ended July 31, 2021 of $501.2 million, or $5.08 per diluted share, compared to consolidated net income of $281.7 million, or $3.21 per diluted share, for the quarter ended August 1, 2020. Non-GAAP consolidated net income excluded non-cash amortization of the debt discount associated with the Company's convertible senior notes and included the share impact of the convertible note hedge purchased by the Company, which is antidilutive for GAAP purposes, for the quarters ended July 31, 2021 and August 1, 2020. There were no non-GAAP adjustments during the quarter ended August 3, 2019. The GAAP to non-GAAP reconciliations are included in a table later in the release under the heading "GAAP to Non-GAAP Reconciliations."

"We said 2021 was going to be the most transformational year in our history, and so far, it certainly has been. We continue to perform at a very high level and invest in our future to reimagine the athlete experience in our core business and with new concepts," said Ed Stack, Executive Chairman. "I am very pleased with the strength of our business and confident about our growth opportunities."

"Our record-breaking quarterly sales and earnings significantly exceeded our expectations, reflecting continued strong consumer demand across our diverse category portfolio along with the strength of our omni-channel offering and elevated athlete experience. I'd like to thank all our teammates for how they delivered against our core strategies and for their commitment to DICK'S Sporting Goods, which helped make this performance possible," said Lauren Hobart, President and Chief Executive Officer. "Based on the strength of our business and our expectations for continued strong consumer demand, we are pleased to increase our full year sales and earnings outlook for the second time this year."

Balance Sheet

The Company ended the second quarter of 2021 with approximately $2.24 billion in cash and cash equivalents and no outstanding borrowings under its $1.855 billion revolving credit facility.

Total inventory increased 7.2% at the end of the second quarter of 2021 compared to the end of the second quarter of 2020.

Year-to-Date Results

Net sales for the 26 weeks ended July 31, 2021 were $6.19 billion, an increase of 53% compared to the 26 weeks ended August 1, 2020 and a 48% increase compared to the 26 weeks ended August 3, 2019. Consolidated same store sales for the 26 weeks ended July 31, 2021 increased 51% compared to the 2020 period, which followed a consolidated same store sales decrease of 2.3% for the 2020 period and a 1.7% increase for the 2019 period. eCommerce sales increased 124% compared to the 26 weeks ended August 3, 2019, and as planned, eCommerce sales decreased 12% compared to the 26 weeks ended August 1, 2020, which included a period of temporary store closures in March, April and May. eCommerce penetration has grown from 12% of total net sales in the 2019 period to 19% in the 2021 period. eCommerce penetration was approximately 33% in the 26 weeks ended August 1, 2020.

Driven by strong sales and gross margin rate expansion, the Company reported consolidated net income for the 26 weeks ended July 31, 2021 of $857.3 million, or $7.96 per diluted share, compared to consolidated net income for the 26 weeks ended August 1, 2020 of $133.4 million, or $1.53 per diluted share. The Company incurred approximately $15 million of pre-tax incremental safety costs in response to COVID-19 during the 26 weeks ended July 31, 2021. During last year's period, the Company incurred approximately $76 million of pre-tax expenses in response to COVID-19. The Company reported consolidated net income for the 26 weeks ended August 3, 2019 of $170.1 million, or $1.85 per diluted share.

On a non-GAAP basis, the Company reported consolidated net income of $868.3 million, or $8.89 per diluted share, for the 26 weeks ended July 31, 2021, and consolidated net income of $139.1 million, or $1.60 per diluted share, for the 26 weeks ended August 1, 2020. Non-GAAP consolidated net income excluded non-cash amortization of the debt discount associated with the Company's convertible senior notes and included the share impact of the convertible note hedge purchased by the Company, which is antidilutive for GAAP purposes, for the periods ended July 31, 2021 and August 1, 2020. For the 26 weeks ended August 3, 2019, the Company reported consolidated net income of $171.0 million, or $1.86 per diluted share, which excluded a non-cash asset impairment and the favorable settlement of a litigation contingency. The GAAP to non-GAAP reconciliations are included in a table later in the release under the heading "GAAP to Non-GAAP Reconciliations."

Capital Allocation

The Company announces enhancements to its 2021 capital allocation plan, including a special dividend of $5.50 per share, a 21% increase in its quarterly dividend to $0.4375 per share and an increase in its planned share repurchases to a minimum of $400 million.

"This additional cash return to our shareholders demonstrates the confidence we have in our business, the strength of our balance sheet and a commitment to efficiently deploy our cash," said Lauren Hobart, President and Chief Executive Officer. "We continue to remain firmly committed to investing in the profitable growth of our core business."

  • On August 19, 2021, the Company's Board of Directors authorized and declared a special dividend in the amount of $5.50 per share on the Company's Common Stock and Class B Common Stock, which will return over $475 million to shareholders and is expected to be funded from the Company's cash on hand. The dividend is payable in cash on September 24, 2021 to stockholders of record at the close of business on September 10, 2021.
  • Also on August 19, 2021, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $0.4375 per share on the Company's Common Stock and Class B Common Stock. The dividend is payable in cash on September 24, 2021 to stockholders of record at the close of business on September 10, 2021. This dividend represents an increase of 21% over the Company's previous quarterly amount per share and is equivalent to $1.75 per share on an annualized basis.
  • The Company now expects to repurchase a minimum of $400 million of its common stock during 2021, an increase of $200 million from its prior guidance. During the second quarter of 2021, the Company repurchased 0.8 million shares of its common stock at an average price of $93.84 per share, for a total cost of $75.8 million. For the 26 weeks ended July 31, 2021, the Company has repurchased common stock totaling $152.7 million under its share repurchase program. The Company has $879 million remaining under its authorization that extends through June 2024.
  • For the 26 weeks ended July 31, 2021, capital expenditures totaled $167.7 million on a gross basis, or $149.3 million net of construction allowances provided by landlords. For the 26 weeks ended August 1, 2020, capital expenditures totaled $94.3 million on a gross basis, or $63.4 million net of construction allowances provided by landlords. For 2021, the Company anticipates capital expenditures to be in the range of $370 to 395 million on a gross basis and in the range of $300 to 325 million on a net basis.

Full Year 2021 Outlook

The Company's Full Year Outlook for 2021 is presented below:

2021 Outlook

Low End

High End

Midpoint % Change

(in millions, except per share amounts)

2019

2020

2021 (E)

vs 2019

vs 2020

Net Sales

$

8,751

$

9,584

$

11,520

$

11,720

33 %

21 %

Consolidated same store sales

3.7 %

9.9 %

18.0 %

20.0 %

Income before income taxes

$

408

$

712

$

1,580

$

1,640

295 %

126 %

% of Net Sales

4.7 %

7.4 %

13.7 %

14.0 %

Income before income taxes - non-GAAP

$

440

$

733

$

1,610

$

1,670

273 %

124 %

% of Net Sales - non-GAAP

5.0 %

7.6 %

14.0 %

14.2 %

Earnings per diluted share

$

3.34

$

5.72

$

11.00

$

11.45

236 %

96 %

Earnings per diluted share - non-GAAP

$

3.69

$

6.12

$

12.45

$

12.95

244 %

108 %

Weighted average diluted shares

89

93

109.5

109.5

Weighted average diluted shares - non-GAAP

89

89

98.5

98.5

Gross capital expenditures

$

217

$

224

$

370

$

395

Net capital expenditures

$

180

$

167

$

300

$

325

  • Due to the uneven nature of sales and earnings in 2020, the Company planned 2021 off of a 2019 baseline and for the same reason believes it is important to compare 2021 against both 2019 and 2020.
  • The Company's non-GAAP outlook for 2021 and its non-GAAP results for 2020 exclude amortization of the non- cash debt discount on the Company's convertible senior notes and diluted shares that are designed to be offset at settlement by shares delivered from the convertible note hedge purchased by the Company. Non-GAAP results for 2019 exclude hunt restructuring charges, a gain on the sale of subsidiaries, non-cash asset impairments and the favorable settlement of a litigation contingency.
  • As a result of actions taken to support its teammates as well as impacts from its temporary store closures in 2020, the Company incurred approximately $175 million of pre-tax incremental teammate compensation and safety costs. Through the first six months of fiscal 2021, the Company has incurred approximately $15 million of COVID-related safety costs.
  • The Company expects to open six new DICK'S Sporting Goods stores and eight specialty concept stores in 2021, including the conversion of two former Field & Stream stores into Public Lands stores. The Company also expects to relocate 11 DICK'S Sporting Goods stores in 2021.
  • The Company plans to repurchase a minimum of $400 million of its common shares in 2021.

Conference Call Info

The Company will host a conference call today at 10:00 a.m. Eastern Time to discuss the second quarter results. Investors will have the opportunity to listen to the earnings conference call over the internet through the Company's website located at investors.DICKS.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live webcast, it will be archived on the Company's website for approximately twelve months.

Non-GAAP Financial Measures

In addition to reporting the Company's financial results in accordance with generally accepted accounting principles ("GAAP"), the Company reports certain financial results that differ from what is reported under GAAP. These non- GAAP financial measures include consolidated non-GAAP net income, non-GAAP earnings per diluted share, non- GAAP income before income taxes, non-GAAP diluted shares outstanding, and net capital expenditures, which management believes provides investors with useful supplemental information to evaluate the Company's ongoing operations and to compare with past and future periods. Management believes that excluding non-cash debt discount amortization from its convertible senior notes and including the share impact from the convertible note hedge is useful to investors because it provides a more complete view of the economics of the transaction. Management also uses certain non-GAAP measures internally for forecasting, budgeting, and measuring its operating performance. These measures should be viewed as supplementing, and not as an alternative or substitute for, the Company's financial results prepared in accordance with GAAP. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies. A reconciliation of the Company's non-GAAP measures to the most directly comparable GAAP financial measures are provided below and on the Company's website at investors.DICKS.com.

Fiscal 2021 Consolidated Same Store Sales

Consolidated same store sales include stores that were temporarily closed during fiscal 2020 as a result of the COVID-19 pandemic. The method of calculating consolidated same store sales varies across the retail industry, including the treatment of temporary store closures as a result of COVID-19. Accordingly, our method of calculating this metric may not be the same as other retailers' methods. For additional information on consolidated same store sales, please see our most recent Annual Report on Form 10-K for the fiscal year ended January 30, 2021, filed with the Securities and Exchange Commission on March 24, 2021.

Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties

This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties and change based on various important factors, many of which may be beyond the Company's control. The Company's future performance and actual results may differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements should not be relied upon by investors as a prediction of actual results. Forward-looking statements include statements regarding, among other things, the Company's future performance, including 2021 outlook for earnings and sales; capital expenditures; share repurchases and dividends; and anticipated store openings, relocations, and closures.

Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements include, but are not limited to: the impact on our business, operations and financial results due to the duration and scope of the COVID-19 pandemic, including the potential impact due to disruptions in our vendors' supply chains and due to restrictions imposed by federal, state, and local governments in response to increases in the number of COVID-19 cases in areas in which we operate; changes in consumer discretionary spending; the extent to which changes in consumer demand due to the COVID-19 pandemic will continue and whether new trends will emerge after the impact of the COVID-19 pandemic subsides; store closures and other impacts to our business resulting from civil disturbances; investments in omni-channel growth not producing the anticipated benefits within the expected time-frame or at all; risks relating to private brands and new retail concepts; investments in business transformation initiatives not producing the anticipated benefits within the expected time-frame or at all; the amount devoted to strategic investments and the timing and success of those investments; inventory turn; changes in the competitive market and competition amongst retailers, including an increase in promotional activity; changes in consumer demand or shopping patterns and the ability to identify new trends and have the right trending products in stores and online; the impact of a high rate of inflation on our business; changes in existing tax, labor, foreign trade and other laws and regulations, including those imposing new taxes, surcharges, or tariffs; limitations on the availability of attractive retail store sites; unauthorized disclosure of sensitive or confidential customer information; website downtime, disruptions or other problems with the eCommerce platform, including interruptions, delays or downtime caused by high volumes of users or transactions, deficiencies in design or implementation, or platform enhancements; disruptions or other problems with information systems; increasing direct competition from vendors, and increasing product costs due to various reasons, including foreign trade issues, currency exchange rate

Attachments

  • Original document
  • Permalink

Disclaimer

Dick's Sporting Goods Inc. published this content on 25 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 August 2021 13:14:20 UTC.