Tuesday's Early Winners & Losers: Golf Galaxy Glows

The retailer's shares soar nearly 18% on a bid from Dick's Sporting Goods.
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Golf Galaxy

(GGXY)

surged nearly 18% in after-hours trading Monday on news

Dick's Sporting Goods

(DKS) - Get Report

had

agreed to acquire the specialty golf retailer in a deal valued at $225 million.

Dick's will pay $18.82 for each share of Golf Galaxy, a premium of 19% above the stock's closing price Friday. Golf Galaxy operates 61 stores, Web sites and a catalog. The Eden Prairie, Minn.-based company generated $250 million in sales during the 12 months ended Aug. 26. Dick's expects the acquisition to add to its earnings in fiscal 2007.

Separately, Dick's posted third-quarter net income of $7.8 million, or 14 cents a share, on sales of $708.3 million, a 22% year-over-year increase. The sporting-goods retailer earned $4.2 million, or 8 cents a share, in the same period a year ago. Looking ahead, Dick's expects fourth-quarter earnings of roughly $1.13 to $1.16 a share, including 6 cents a share of stock-option expenses.

For the full fiscal year, the company expects earnings of $1.95 to $1.98 a share, up from its prior guidance of $1.84 to $1.88 a share, including 26 cents of option-related costs. Analysts are expecting $1.88 a share for the year. The earnings outlook doesn't include the acquisition of Golf Galaxy and excludes any merger-related expenses that may be incurred. Shares of Golf Galaxy gained $2.78, to $18.43, in after-hours trading. Dick's Sporting Goods was trading up $2.08, or 4.3%, to $51.

Lawson Software

(LWSN)

stumbled after the St. Paul, Minn.-based company said its board approved a

share repurchase of up to $100 million. The company said it will repurchase the shares through open-market purchases, privately negotiated transactions or transactions structured through investment banking institutions. Lawson had 186.4 million common shares outstanding at the end of the first quarter of fiscal 2007 ended Aug. 31. Shares were trading down 45 cents, or 5.9%, to $7.12.

Dillard's

(DDS) - Get Report

gained after the department store operator swung to a

third-quarter profit. The Little Rock, Ark.-based company posted a profit of $13.6 million, or 17 cents a share, compared with a year-earlier loss of $2.7 million, or 3 cents a share. Analysts polled by Thomson First Call expected a loss of a penny a share for the most-recent period. Sales fell slightly to $1.722 billion from $1.727 billion last year.

Same-store sales, or sales at stores open at least a year, declined 2%. Sales of juniors' and children's apparel, as well as decorative home merchandise, were significantly below trend for the period, Dillard's said. That offset higher-than-expected sales of lingerie and accessories. The company's bottom-line results were aided by a 140-basis-point improvement in gross margins, which Dillard's attributed to fewer markdowns and lower inventory levels. Shares were trading up $2.54, or 8.7%, to $39.21.

NBTY

(NTY)

gained after the nutritional-supplements company reported a rise in fourth-quarter earnings. The Bohemia, N.Y.-based company posted earnings of $37.7 million, or 54 cents a share, up from $11.4 million, or 17 cents a share, a year ago. Sales increased $33 million, or 8%, to $468 million. Wall Street was looking for earnings of 40 cents a share on revenue of $464.3 million. For the full year, NBTY posted earnings of $111.8 million, or $1.62 a share, up from $78.1 million, or $1.13 a share, a year ago. Revenue increased 8% to $1.88 billion. Shares were trading up $1.05, or 3.6%, to $30.60.

China Medical Technologies

(CMED)

gained after the China-based company posted a rise in second-quarter earnings. The medical-device company posted income of 71.6 million yuan, ($9.1 million), or 2.62 yuan (33 cents) an American Depositary Share, up from 42.9 million yuan, or 1.78 yuan per ADS, a year ago. Revenue increased 49.2% to 131.4 million yuan, or $16.6 million.

The company backed its financial targets for fiscal-year 2006 with an estimated range of annual net revenue target of 521 million yuan ($65.9 million) and 533 million yuan ($67.4 million). The estimated range of earnings-per-ADS target remains between 9.61 yuan ($1.22) and 9.90 yuan ($1.25). The company said it plans to offer $100 million of convertible senior subordinated notes and enter into a share-buyback program of $30 million. China Medical said it intends to use the remaining proceeds for general corporate purposes and for the acquisitions of businesses, products and technologies that it believes will compliment its existing business. Shares were trading up $2.35, or 8.4%, to $30.47.

Bob Evans

(BOBE)

sank after the food service and restaurant company

missed fiscal second-quarter targets. The Columbus, Ohio-based chain made $13.5 million, or 37 cents a share, for the quarter ended Oct. 27, compared with the year-ago $13.2 million, or 37 cents a share. Sales rose to $413 million from $392 million a year earlier. Analysts were looking for a 39-cent-a-share profit on sales of $416 million. "While we are pleased with the strong ongoing sales momentum in food products," said CEO Steve Davis, "we are taking a closer look at opportunities to improve the segment's profitability, ranging from short-term tactics such as reducing sales incentives to longer-term investments to enhance productivity in our plants." Shares were trading down $1.73, or 5%, to $32.60.