Dick's Sporting Goods 2013 Annual Report Download - page 55

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29
Other Income
Other income was $12.2 million for fiscal 2013 compared to $4.6 million for fiscal 2012. The Company recognizes investment
income to reflect changes in the investment value of assets held in its deferred compensation plans with a corresponding charge
to selling, general and administrative costs for the same amount. The Company recognized investment income totaling $6.0
million in fiscal 2013 compared to $3.2 million for fiscal 2012 due to an overall improvement in the equity markets, which
impacted the deferred compensation plan investment values. During the first quarter of 2013, the Company recorded $4.3
million related to the partial recovery of the Company's investment in JJB Sports, which it had previously fully impaired.
Income Taxes
The Company's effective tax rate was 38.2% for fiscal 2013 as compared to 40.7% for fiscal 2012. During fiscal 2012, the
Company determined that a valuation allowance totaling $7.9 million was required for a portion of the deferred tax asset
related to a $32.4 million net capital loss carryforward resulting from the impairment of its investment in JJB Sports, as the
Company did not believe that it was more likely than not that the Company would generate sufficient capital gains in future
periods to recognize that portion of the expected net capital loss. During the first quarter of fiscal 2013, the Company
determined that it would recover $4.3 million of its investment in JJB Sports. There is no related tax expense, as the Company
reversed a portion of the deferred tax valuation allowance it recorded during fiscal 2012 for net capital loss carryforwards it did
not expect to realize at that time.
Fiscal 2012 (53 weeks) Compared to Fiscal 2011 (52 weeks)
Net Income
The Company reported net income for the year ended February 2, 2013 of $290.7 million, or $2.31 per diluted share, as
compared to net income of $263.9 million, or $2.10 per diluted share, in fiscal 2011. Fiscal 2012 net income included a charge
of $27.6 million, net of tax, or $0.22 per diluted share, related to the Company's impairment of its investment in JJB Sports.
Additionally, fiscal 2012 included approximately $0.03 per diluted share for the 53rd week. Fiscal 2011 net income included a
gain on sale of investment of $8.7 million, net of tax, or $0.07 per diluted share, and an increase to net income of $1.3 million,
net of tax, or $0.01 per diluted share, resulting from a partial reversal of litigation settlement costs previously accrued during
fiscal 2010.
Net Sales
Net sales increased 12% to $5,836.1 million in fiscal 2012 from $5,211.8 million in fiscal 2011 due primarily to a 4.3%
increase in consolidated same store sales measured on a 52-week to 52-week basis, growth of our store network and the
inclusion of the 53rd week of sales. Sales during the 53rd week of fiscal 2012 totaled approximately $74 million. The 4.3%
consolidated same store sales increase consisted of a 2.4% increase at Dick's Sporting Goods and a 5.5% increase at Golf
Galaxy. eCommerce sales penetration was 5.3% of total sales in fiscal 2012 compared to 4.0% of total sales in fiscal 2011.
The increase in consolidated same store sales was broad based, with larger increases in athletic apparel, hunting, athletic
footwear, golf, accessories and team sports, partially offset by a sales decrease in outerwear and cold weather accessories due to
a second consecutive warm winter season and a decline in sales of large fitness equipment, such as treadmills and ellipticals.
The same store sales increase at Dick's Sporting Goods was driven by an increase in sales per transaction of approximately
3.3%, offset by a decrease in transactions of approximately 0.9%. Based upon our fiscal 2012 sales mix, every 1% change in
consolidated same store sales would have impacted fiscal 2012 earnings before income taxes by approximately $17 million.
Store Count
During fiscal 2012, the Company opened 38 new Dick's Sporting Goods stores and two new True Runner stores. Additionally,
the Company relocated five Dick's Sporting Goods stores and repositioned one Golf Galaxy store. As of February 2, 2013, the
Company operated 518 Dick's Sporting Goods stores in 44 states and 81 Golf Galaxy stores in 30 states, with approximately
29.6 million square feet on a consolidated basis.
Income from Operations
Income from operations increased $91.7 million to $523.7 million in fiscal 2012 from $432.0 million in fiscal 2011.