For the entire fiscal year 2004, Dick's turned in a comp-store sales increase of 2.6%. Total sales for the year ended Jan. 29 increased 43% to about $2.1 billion. The former Galyan's stores, which figured into the company's fourth quarter numbers, will not be included in the annual comp-store base until 13 months after the end of the re-branding and re-merchandising effort, which will probably be by the end of the first half of 2005.
"Certain product lines did very well during the quarter," said Edward W. Stack, chairman and CEO of the retailer, during Monday's earnings conference call. "Such as golf, athletic footware and apparel, and licensed products, especially NFL products. These were partially offset by weaker sales in other categories, especially winter outerwear, snow sports boots and inline skates."
Regarding the Galyan's conversion, "we have converted the point of sale systems in the stores, re-signed the stores, converted the warehouse management system in the former Galyan's distribution center, closed the corporate office and converted all activity onto Dick's systems," added Stack. "We're all on the same platform now. We've also made progress on re-merchandising stores to place more of an emphasis on sporting goods."
During the fourth quarter, Dick's opened five stores and closed four (one Dick's and three Galyan's), bringing the total stores opened for the year to 29, and the total stores closed for the year to six (three Dick's and three Galyan's). The stores that opened in Q4 included ones in Easton, PA, West Mifflin, PA, and Portsmouth, NH, and two in Indianapolis. The Portsmouth store was the only one in a new market for the retailer, not counting the markets, such as Chicago, Atlanta and Denver, that it's entering by converting former Galyan's locations.
Like many others in the retail realm, Dick's is also dealing with the fallout of the recent SEC opinion on accounting and leases. "In connection with the recent attention placed on lease accounting, the company reviewed and discussed with its independent auditors, and concluded our lease accounting policy was not consistent with accounting standards," Dick's said Monday, in a statement released ahead of the conference call. "The company has changed this policy such that the commencement date of the lease term will be the earlier of the date rent payments begin or the date the company takes possession of the property for the initial setup of fixtures and merchandise."
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