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Dick’s Sporting Goods Beats Street, Launches Idol-Designed Fitness Collection

Dick’s Sporting Goods Inc., operator of Dick’s, Gold Galaxy and Field & Stream stores, has had a busy week. On Tuesday it released fourth quarter and full year 2014 earnings that beat Wall Street expectations. On Thursday it launched a women’s fitness and lifestyle collection inspired by American Idol winner and pop superstar Carrie Underwood.

Calia by Carrie Underwood is an exclusive private label fitness and athleisure sportswear collection designed in collaboration with the singer featuring more than 60 apparel and accessory items including socks, underwear, sports bras, shapewear tights, sweaters, tops and more. Prices range from $8-$85. The brand, intended to strengthen its women’s business, is now available on the company’s website and will reportedly displace Adidas and Reebok in Dick’s stores.

Net sales for the three months ended Jan. 31 increased 10.9% to approximately $2.2 billion from the prior year period. Consolidated same store sales increased 3.4%, beating the company’s guidance of 1-3 percent. Same-store sales for Dick’s stores rose by 3.8%, while those for Golf Galaxy decreased by 7.1%.

E-commerce in the quarter was 14.4% of total sales, compared to 12.2% during the fourth quarter of 2013.

Consolidated net income was $155.5 million, or $1.30 per share, rose by 12 percent from $138.6 million, or $1.11 per share, in the prior year period, ahead by 17 percent on a per-share basis, beating prior company guidance of $1.18-$1.28 per share and analyst estimates of $1.22.

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In the fourth quarter, the company opened six new Dick’s Sporting Goods stores and closed two Golf Galaxy stores. As of Jan. 31, the company operated 603 Dick’s Sporting Goods stores in 46 states, with roughly 32.3 million square feet, 78 Golf Galaxy stores in 29 states, with approximately 1.4 million square feet and 10 Field & Stream stores in five states, with approximately 0.5 million square feet.

Net sales for the fiscal year ended Jan. 31 increased by 9.7% to $6.8 billion. Consolidated same-store sales rose by 2.4%. E-commerce penetration for the 52 weeks ended Jan. 31, 2015 was 9.2% of total sales, compared to 7.9% during the 52 weeks ended Feb. 1, 2014.

The company reported fiscal year net income of $347.8 million, or $2.87 per diluted share. Net income, including items related to an asset sale and gold restructuring, was $344.2 million, or $2.84 per diluted share. In the prior year, net income was $337.6 million, or $2.69 per share.

The sporting goods retailer seems to have recovered nicely from 2013, when it was hurt by huge declines in the golf business. Chairman and CEO Ed Stack said in a statement, “The strong performance validates the merchandising and space allocation strategies that we put into place during this past year. Our team also successfully navigated a heavily promotional environment while exceeding our top line and bottom line targets, and our inventory is well-positioned as we head into 2015.”

The company’s board authorized and declared a quarterly dividend in the amount of $0.1375 per share, payable on March 31 to stockholders of record as of March 13, up 10 percent over the company’s previous quarterly per share amount, and equivalent to an annualized rate of $0.55 per share. In total for fiscal 2014, the company repurchased roughly 4.3 million shares of its common stock at an average price of $46.20 per share, for a total cost of $200 million.

For fiscal 2015, the company expects earnings per share of approximately $3.10-$3.20. Consolidated same store sales are currently expected to increase 1-3 percent, compared to a 2.4% increase in fiscal 2014, and the company plans to open approximately 45 Dick’s stores and nine Field & Stream stores in 2015.