Dick’s weathering downturn

PITTSBURGH Dick’s Sporting Goods reported a fourth quarter loss of $104.4 million, or 93 cents a share, but the numbers are not as bad as they seem if charges related to two acquisitions are factored in to the equation. Dick’s incurred a $193.4 million non-cash impairment charge related to the acquisition of Golf Galaxy and Chick’s Sporting Goods, which served to depress reported earnings. Excluding the charge, the company generated fourth-quarter net income of $63.4 million or 55 cents a share. Fourth-quarter sales decreased slightly to $1.2 billion, largely because of an 8.6% decrease in same-store sales. The company’s Golf Galaxy stores were especially hard hit with same-store sales that declined nearly 21%.

According to Dick’s chairman and CEO Ed Stack, the company executed well in the fourth quarter, ended the period with no borrowings against its line of credit, reduced inventory levels and managed to leverage expenses. Even so, Stack maintained a cautious view of business conditions going forward, which has tended to be the case lately with all retailers reporting year-end results and commenting on the outlook for 2009.

"As we plan our business for 2009, we are not anticipating any improvement in the macro economic conditions compared to what we experienced in the fourth quarter,” Stack said. “We will continue to remain focused on servicing core athletes and outdoor enthusiasts, carefully managing inventory levels, tightly controlling expenses, and modestly growing our store base.”

Dick’s ended the year with 384 full line sporting goods stores, 89 Golf Galaxy stores and 14 Chick’s Sporting Goods stores.