Dick's Sporting Goods 2011 Annual Report Download - page 54

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of approximately $9.8 million, net of tax, or $0.08 per diluted share and a litigation
settlement charge of approximately $6.5 million, net of tax, or $0.05 per diluted share.
Net sales increased 7% to $5,211.8 million in fiscal 2011 from $4,871.5 million in fiscal 2010 due
primarily to a 2.0% increase in consolidated same store sales and the growth of our store network.
Gross profit increased to 30.60% in fiscal 2011 as a percentage of net sales from 29.75% in fiscal
2010 due primarily to higher merchandise margins and leverage of fixed occupancy costs.
In fiscal 2011, the Company:
Declared an annual cash dividend of $0.50 per share, the first ever such dividend.
Executed a new credit agreement that increases the Company’s borrowing capacity to
$500 million and allows for a $250 million increase in the total capacity, subject to the
satisfaction of certain conditions.
Authorized a one-year share repurchase program of up to $200 million of the Company’s
common stock. Pursuant to this program, the Company repurchased 30,600 shares of
common stock for $1.2 million in fiscal 2011.
Began construction on a fourth distribution center, which we expect will increase the
Company’s total distribution capacity to approximately 750 stores.
Results of Operations
The following table presents for the periods indicated selected items in the Consolidated Statements of
Income as a percentage of the Company’s net sales, as well as the basis point change in percentage of
net sales from the prior year:
Basis Point Basis Point
Increase / Increase /
(Decrease) in (Decrease) in
Percentage of Percentage of
Net Sales Net Sales
Fiscal Year from Prior Year from Prior Year
2011 2010 2009 2010-2011 2009-2010
Net sales(1) 100.00% 100.00% 100.00% N/A N/A
Cost of goods sold, including
occupancy and distribution
costs(2) 69.40 70.25 72.42 (85) (217)
Gross profit 30.60 29.75 27.58 85 217
Selling, general and administrative
expenses(3) 22.03 23.18 22.03 (115) 115
Merger and integration costs(4) - - 0.23 - (23)
Pre-opening expenses(5) 0.28 0.22 0.21 6 1
Income from operations 8.29 6.35 5.11 194 124
Gain on sale of investment(6) (0.27) - - (27) -
Interest expense(7) 0.27 0.29 0.10 (2) 19
Other expense (income)(8) - (0.05) (0.05) 5 -
Income before income taxes 8.29 6.11 5.06 218 105
Provision for income taxes 3.23 2.37 1.99 86 38
Net income 5.06% 3.74% 3.07% 132 67
(1) Revenue from retail sales is recognized at the point of sale, net of sales tax. Revenue from e-commerce sales
is recognized upon shipment of merchandise and any service-related revenue is recognized as the services are
32 Dick’s Sporting Goods, Inc. 2011 Annual Report