- Dick’s Sporting Goods Inc (Dick’s)
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The ticker symbol used by Dick’s Sporting Goods, Inc. is DKS. It is a public company traded in the New York stock Exchange (NYSE)
The company’s website is http://www.dickssportinggoods.com with links to New Releases, Investor Relations, Financial Information, Corporate history/profile, Executives, Products/ services, Employment opportunities.
The company was founded in 1948 by one 18 year old Dick Stack who was a salesman at a small army and navy store in Binghamton, New York. He was given $ 300 by his grandmother and he opened a small bait and tackle shop in Binghamton.
He expanded the company and by 1958 the company had taken shape and that is how Dick’s Sporting Goods, Inc. came to be.
Dick’s Sporting Goods, Inc. is a full line sporting goods retailer that sells a variety of well known sporting goods, equipment, kits and foot ware in a specialty store environment.
Some of the brands that the company sells are among others Nike, North Face Columbia, Adidas, Callaway and Under armour. It also merchandises private label goods which are retailed under names such as Ativa, and Walter Hagen. These two private label-products are exclusively available in its stores
Apart from retailing, Dick’s Sporting Goods, Inc. store also offer after sales services such as golf grip replacement, bicycle repair and maintenance, home delivery and the assembly of fitness equipment.
The top competitors to Dick’s Sporting Goods, Inc. include Foot Locker, Sports Authority, Wall-Mart, Big 5 Sporting Goods Corporation, Hibbet Sports, Inc. Cabela’s. Incorporated, Gander Mountain Company, Sport Chalet, Inc., Win mark Corporation, Zimiez, Inc.
The CEO of Dick’s Sporting Goods, Inc is Edward W. Stack who is also the chairman of the board; he has been an officer of the company since 1984. He is aged 52.
He took over from his father Richard ODicko Stack when he retired from the company. Mr. Stack has been in the company on a full time basis in several positions including President, Store Manager and Merchandise Manager.
He earns a total of $11,145,106 and also has exercisable stock options in which 201,000 have been exercised worth $9,531,420.
William J. Colombo is the President, Chief Operating Officer and Director of the company. He is aged 51.
Mr. Colombo became President and COO in 2002. He served as President of disports.comLLC a subsidiary of Dick’s Sporting Goods, Inc. from late 1998 to 2000.
From 1995 to 1998, he was Chief Operating Officer and an Executive vice President.
Before joining the company he was with J.C Penney Company Inc (a NYSE listed company) from 1977-1988.
He is also a Director of Gibraltar Industries (listed on NASDAQ)
He earns $ 1,865, 259,259 with exercisable options of 300,000 worth $ 13,917,152.
Dick’s Sporting Goods, Inc, top management
Edward W Stack- male- Chairman of board, CEO
William J Colombo –male- President, COO, Director.
Timothy E Kullman- male – CFO, Senior VP
Gwendolyn K Manto- female – Executive vice President, Chief merchandising Officer
Joseph Schmidt- male – Executive VP- operations
Lynch Mathew – male – Senior VP, Chief Information Officer
From the above analysis it is clear that there is only one senior female executive in Dick’s Sporting Goods, Inc. management.
The fiscal year of the company starts from February and ends on January.
The stock movements of the company have been relatively stable as there have been no major changes.
The current price of the company’s stock as at 9.44 am on November 19, 2007 in the NYSE was $ 28.70.
The 52 week high for the company’s stock is $36.78 while the 52 week low is $ 24.00. This data is from http://financegoogle.com/finance?q=DKS.
The current price of $ 28.70 is based on an average volume 1.76 million shares.
The company has not been paying dividends in the recent past. The basic EPS of the company in the year 2006 was $ 2.20 while the diluted EPS for the same period was $2.03.
It is projected that the earnings will grow by 0.06 during the current quarter to October 2007, for the whole year it is projected to be $ 1.25.
The company is audited by Deloitte and Touché LLP, Pittsburgh Pennsylvania.
The opinion issued by the auditors of the company is unqualified. This means that the financial statements represent a true and fair view of the company’s situation and void material misstatements.
The auditors also expressed an unqualified opinion on the effectiveness of the company’s internal controls. This indicates that the auditors believe that the internal controls put in place by the management are working.
The titles of each of the four financial statements in the annual report are;
Consolidated statements for the fiscal years ended February 3, 2007 January 28, 2006 and January 29, 2005.
Consolidated balance sheets as of February 3, 2007 and January 28, 2006. Consolidated statements of changes in stockholders equity for the fiscal years ended February 3, 2007 January 28, 2006 and January 29, 2005.
Consolidated statements of cash flows for the fiscal years ended February 3, 2007, January 28 2006 and January 29 2005.
Summary of significant Accounting policies
Principles of consolidation
Use of estimates in the preparation of financial statements
Cash and cash equivalents cash management
Property and equipment
Goodwill and intangible assets
Deferred revenue and other liabilities
Merger, integration and store closing costs.
Earnings per share
Stock- based compensation
Fair value of financial instruments
Newly issued accounting pronouncements
- ii) Acquisition
iii) Goodwill and other intangible assets
- iv) Store and corporate office closings
- v) Property and equipment
- vi) Accrued expenses
Senior convertible notes
Revolving credit agreement
Capital Lease Obligations.
viii) Operating leases
- ix) Stock based compensation and Employee stock plans
Stock option plans
Employee stock purchase plan
Common stock class B common stock and preferred stock
- x) Income taxes
- xi) Interest expenses, net
xii) Earnings per common share
xiv) Retirement savings plan
- xv) Commitments and contingencies
xvi) Subsequent event
xvii) Quarterly financial information (Unaudited)
The inventories for year ended February 3, 2007 is $ 641,464,000. It is valued at the lower of cost of weighted average cost or market. Inventory costs consist of the direct cost of merchandize including freight.
(a)The percentage of property plant and equipment of total assets.
As at February 3, 2007 =$433,071,000
- b) According to the 2006 statements the composition of PPE was as follows;
Building and land $31, 820, 00
Leasehold improvements $ 374,879,000
Furniture fixtures ad equipment $ 330,757,000
It is evident that leasehold property is the most significant PPE
- c) The company has not invested significantly is land and buildings combined =$ 31,820,000 as compared to total assets of $1,187,789,000 in 2006.
- d) Buildings and land
Furniture, fixtures and equipment
PPE is stated at cost and includes capitalized leases. The amortization and depreciation is in straight line basis.
Buildings 40 years
Leasehold improvements 10-25 year
Furniture fixtures equipment 3-7 years
Vehicles 5 years
The nature of the business is included in the letter to shareholders explaining to them what exactly the company does. Any acquisition and disposals should also be included. The strategies that the company uses in order to be competitive are also included.
The risk factors that may greatly affect the company’s profits and operations should be in the letter to the shareholders. Any ongoing or settled legal proceedings that could affect significantly the company also should be included. Any matter to be discussed and voted on by the shareholders and the price of stock (high and lows) should be indicated.
The management discussion and analysis helps the management to explain the various aspects of the company like performance any acquisition and the general operations.
There was improved earning as compared to previous years due to the increase in store sales was mainly due to the improving sales from the apparel children sporting software merchandizing hunting camping and guns. In the financial year 2007, the company is planning to expand by opening 45 new Dick’s stores and 17 new Golf Galaxy store. The financial statements were prepared according to the GAAP of the USA.
|Return assets =net income
|Debt to assets=total debt
Ratio total assets
|Return on = net income
Equity shareholders equity
|Gross margin=gross profit
net income before interest
|Inventory = sales
= net credit sales
average accounts receivable
|Average number of days to collect accounts receivables =
accounts receivable x number of days
total credit sales
|39,687,000 x 365
|Current Ratio = current assets
All the major ratios like P/E, return on assets, return on equity, gross margin ratio, return on sales and current ratio have increased from the previous financial years’ amounts. This shows improved profitability and management of available resources. Debt to assets ratio has declined from the 2005 figures meaning less financial risk to the company. The inventory turnover ratio decreased indicating that the movement of stock slowed a little bit.
McGraw-Hill Higher Education (2007). Fundamental Financial & Management Accounting Concepts retrieved on 22/11/2007 from http://highered.mcgraw-hill.com/sites/0072846003/student_view0/chapter4/
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