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This sporting goods retailer's strong growth accelerated in 2013, with its eCommerce growing 65% to over $480 million. Also, the company is driven to deliver superior financial and operational results, including growing its sales to $10 billion and increasing its operating margin to 10.5% by the end of 2017.

The Stock In Focus

Founded in 1948, DICK'S Sporting Goods Inc. (DKS) is an authentic full-line sports and fitness specialty omni-channel retailer offering a broad assortment of high quality, competitively-priced brand name sporting goods equipment, apparel and footwear in a specialty store environment.

DICK'S also owns and operates Golf Galaxy, Field & Stream and True Runner specialty stores. It offers its products through a content-rich eCommerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront.

Store Network

Growth in its number of stores and selling square footage, positive same store sales and its strong gross profit margins have been the indispensable factors that have historically influenced the company's profitability and success. In the last five years, the company has grown from 420 Dick's Sporting Goods stores as of October 31, 2009 to 597 Dick's Sporting Goods stores as of November 1, 2014.

Dick's opened its first two Field & Stream specialty stores in 2013 and laid plans to grow this chain to a total of about 55 locations by 2017. The company seeks to expand its presence through opening of new stores and have the potential to reach about 1,100 Dick's Sporting Goods locations, including smaller-market locations across the United States.

During the third quarter of 2014, the company opened 24 new DICK'S Sporting Goods stores, one new Golf Galaxy store and seven new Field & Stream stores. The company also relocated one DICK'S Sporting Goods store and one Golf Galaxy store, remodeled five DICK'S Sporting Goods stores and closed one DICK'S Sporting Goods store.

As of November 1, 2014, the company operated 597 DICK'S Sporting Goods stores in 46 states, with about 32.0 million square feet and 80 Golf Galaxy stores in 29 states, with about 1.4 million square feet. October 31, 2014, the company opened its 14th store in Missouri and 597th store nationwide at Wentzville Crossing.

The company is growing it operations by pursuing attractive growth opportunities, and is focused on continuous improvement in each of its business. Hence, the company is impelled to deliver superior financial and operational results, including growing its sales to $10 billion and increasing its operating margin to 10.5% by the end of 2017.

Q4, FY14 Guidance

For the fourth quarter, the company currently expects consolidated earnings per share to be about $1.18 - $1.28. Consolidated same store sales are expected to increase about 1% - 3%. Analysts project fourth-quarter earnings of $1.21 per share.

For fiscal 2014, the company now projects adjusted earnings per share of around $2.75 - $2.85, excluding a gain on the sale of an asset and golf restructuring charges. Consolidated same store sales are now forecast to increase about 1% - 2%. Analysts estimate annual earnings of $2.79 per share.

Earlier, the company expected full-year 2014 adjusted non-GAAP earnings in the range of $2.70 - $2.85 per share, and same store sales growth in a range of 1% - 3%, compared to a 1.9% increase in fiscal 2013.

Latest Q3 Results

The company reported a marginal decline in the third-quarter profit, amid weakness in golf and hunting segments. Earnings per share and revenues rose and came in line with analysts' estimates.

"Our third quarter earnings were at the higher end of our guidance, but continued pressures in golf and hunting kept our comp sales at the lower end of our expectations," said Edward Stack, chairman and CEO.

The company's third-quarter net income decreased 1.5% to $49.21 million from $49.98 million in the previous year. Meanwhile earnings per share improved to $0.41 from $0.40 per share in the prior-year period.

On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 9% to $1.53 billion from $1.40 billion a year earlier, and met 22 analysts' expected revenues of $1.53 billion.

Consolidated same store sales were up 1.1%. For the year-ago quarter, consolidated same store sales increased 3.3%, adjusted for the shifted retail calendar due to the 53rd week in 2012.

Same store sales for Dick's Sporting Goods increased 1.7%, while Golf Galaxy was down 8.9%. eCommerce penetration for the recent quarter was 7.3% of total sales, compared to 6.5% in the preceding year.

Year-To-Date Highlights

Net sales for the 39 weeks ended November 1, 2014 increased 9% to $4.7 billion, due primarily to the growth of store network and a 2.0% increase in consolidated same store sales.

The 2.0% increase in consolidated same store sales contributed $82.5 million of the increase in revenue for the 39 weeks ended November 1, 2014. The remaining $306.2 million increase in the company's non-comparable sales is primarily attributable to new stores.

The 2.0% increase in consolidated same store sales consisted of an increase of 2.8% at Dick's Sporting Goods and a decrease of 9.6% at Golf Galaxy. eCommerce sales penetration was 6.8% of total sales during the current period versus 6.0% of total sales during the 39 weeks ended November 2, 2013, representing an approximate increase of 24% in eCommerce sales across both Dick's Sporting Goods and Golf Galaxy.

The increase in consolidated same store sales was primarily driven by increases in athletic apparel, team sports and outdoor equipment, partially offset by declines in the golf and hunting businesses. The same store sales increase at Dick's Sporting Goods is attributable to an increase of 2.4% in sales per transaction and an increase in transactions of about 0.4%. Every 1% change in consolidated same store sales, which consists of brick and mortar and online sales, would impact earnings before income taxes for the current period by about $14.0 million.

Net income was $188.7 million for the 39 weeks ended November 1, 2014, or $1.55 per share, compared to $199.0 million or $1.58 per share last year.

Golf Restructuring

The company continue to see headwinds in its hunting and golf businesses. Specifically the hunting business comped down high single digits. It expected hunting business to continue to trend down in the third quarter and then flatten out in the fourth quarter.

Golf continued to be its most challenging business. The company's significant promotional activity, particularly around Father's Day led to better than expected sales but negatively impacted merchants. Golf Galaxy caps were down 9.3% and its Dicks golf business was down somewhat less. In order to realign this business more closely with current and expected golf demand, Dick's decided to reduce its cost structure.

Hence, the company eliminated specific positions in its Golf area within DICK stores.

Annual Financial Highlights

Net income for fiscal 2013 was $337.9 million or $2.69 per share in 2013 compared to $290.7 million or $2.53 per share in 2012, $263.9 million or $2.10 per share in 2011, $182.1 million or $1.50 per share in 2010, and $135.4 million or $1.15 per share in 2009.

The company's net sales for fiscal 2013 increased to $6.21 billion from $5.84 billion in 2012, $5.21 billion in 2011, $4.87 billion in 2010, and $4.41 billion in 2009.