Dick's Sporting Goods 2005 Annual Report Download - page 7

dick’s sporting goods, inc. 2005 annual report
optimize our growing infrastructure and speed merchandise
to our selling floors. We also continued to develop and provide
Dick’s own training programs to store associates, and to extend
our tradition of opening new Dick’s locations with an experi-
enced Dick’s store manager. These initiatives help ensure
that our team is well-versed in delivering excellent service
and offering up-to-date product knowledge to our customers.
Finally, we fortified our ability to pursue future growth
opportunities by ending the year with no borrowings
on our revolving credit facility, a reduction of $76 million
compared with last year.
Outpacing the Competition
If I were to characterize the past year in a word, I would
say “performance.” Indeed, 2005 was a period during which
our Company delivered exceptional operating and financial
results, while taking steps to ensure that we can continue to
outpace our competitors in the coming years. Our ability to
deliver these accomplishments is the direct result of the
way we think and function at Dick’s, which I liken to a great
athlete: continually developing our strengths and skills, and
perpetually preparing for the challenges and opportunities
that lie ahead. We believe that one of these opportunities
is to drive our continued earnings growth. With this in mind,
we are focused on increasing our operating margin by
approximately 30 basis points annually, thereby fueling an
estimated annual earnings growth rate of approximately
20 percent for our Company.
As we move forward, I would like to thank our employees
for their dedication and hard work over the past year. I would
also like to thank our vendors for their partnership, our
customers for their patronage, and our shareholders for
their support. Rest assured that we will continue to focus
on delivering a level of performance that enables Dick’s to
excel within our industry.
Edward W. Stack
Chairman and Chief Executive Officer
Performance
Completed integration of Galyan’s acquisition
one quarter ahead of plan
Delivered improved gross, operating, EBITDA and
net income margins
Increased comparable store sales by 2.6%,
marking our sixth consecutive year of posting a
gain of greater than 2% in this metric
Improved our merchandise margin, leveraging
our growing purchasing power and driving sales
in our more than 10 private-label brands, which in
2005 accounted for a record 12% of total sales
Achieved $20 million in synergies resulting
from the Galyan’s acquisition
Ended 2005 with no borrowings on
our revolving credit facility, a reduction of
$76 million compared with last year
Ended the year as the largest full-line sporting
goods retailer in the nation with $2.6 billion
in sales, and once again as the most profitable
publicly held full-line sporting goods retailer
in the nation4
Growth
Converted 44 Galyan’s stores into Dick’s Sporting
Goods stores, positioning us in a number of key
new markets, and increasing our presence in
several existing markets
Opened 26 new Dick’s Sporting Goods stores that
enabled us to enter nine new markets, including
our first store in Florida, our 34th state
Marked the largest single quarter store opening
campaign in our history in the third quarter,
opening 16 new locations and relocating three
additional locations
Began servicing more stores from our
recently expanded Smithton, Pennsylvania
distribution center
4As measured by income from continuing operations and
adjusted for non-recurring items
2005 ACCOMPLISHMENTS
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