Sporting goods retailer Dick's reports for Q1 2005 – Loss on merger costs
18 May '05
6 min read
The conversion, re-merchandising, and grand re-opening of the former Galyan's stores to Dick's stores is essentially complete. We expect to be operating the former Galyan's stores with the same merchandise assortments, financial discipline and customer service expectations as we have for the rest of our stores. Since the conversion is completed, the former Galyan's stores will be included in the comp store sales base beginning in the second quarter of fiscal 2006. The Company anticipates closing the final store due to the conversion in the second quarter of 2005.
The Company continues to expect total merger integration and store closing costs of approximately $70 million, of which $20 million was incurred in 2004. The Company estimates future merger costs of $5.5 million in the second quarter, and $39 million pre-tax for fiscal 2005, of which $32.5 million was incurred in the first quarter of 2005. The balance of the costs, which relate to future lease payments on closed stores, will be incurred in 2006 and beyond. Merger integration and store closing costs primarily include the expense of closing Dick's stores, advertising the re-branding of Galyan's stores, recruiting, system conversion costs, and duplicative costs such as corporate occupancy.
2005 Outlook
The Company's current outlook for 2005 is based on current expectations and includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the EExchange Act as described later in this release. Although the Company believes that comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
marketing@alchempro.com
