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In order for us to take advantage of the safe harbor rules, I would like to remind you that today's discussion includes some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which includes but are not limited to our views and expectations concerning our future results.Such statements relate to future events and expectations and involved known and unknown risk and uncertainty. Our actual results or actions may differ materially from those projected in the forward-looking statements. For a summary of risk factors that could cause results to differ materially from those expressed in the forward-looking statements, please refer to our periodic reports filed with the SEC, including the company's annual report on From 10(k) for the year ended January 29, 2011. We disclaim any obligation and do not intend to update these statements except as required by the securities law. We've also included some non-GAAP financial measures in our discussion today. Our presentation of the most directly comparable financial measures, calculated in accordance with generally accepted accounting principles and related reconciliations can be found on the Investor Relations portion of our website at dickssportinggoods.com. Leading our call today will be Ed Stack, Chairman and Chief Executive Officer. Ed will review our fourth quarter and full year financial and operating results, 2012 guidance, and discuss our growth strategy. Following this Joe Schmidt, our President and Chief Operating Officer will outline our store and e-commerce development program. After Joe's comments, Tim Kullman, our Executive Vice President of Finance and Administration and Chief Financial Officer, will provide greater detail regarding our financial results. I'll now turn it over to Ed Stack. Edward W. Stack Thank you Anne-Marie, and thanks to all of you for joining us today. In the fourth quarter, we generated a 6.1% increase in sales over the fourth quarter of 2010, expanded our operating margins by 112 basis points, and generated record earnings of $0.88 per diluted share, a 16% increase over the non-GAAP earnings per diluted share of $0.76 in the fourth quarter of last year. All of this was accomplished even with an abnormally warm winter season.
Additionally, in the quarter, we maintained an exceptionally strong balance sheet with our cash balance growing $188 million over last year. We initiated our first-ever dividend, and we announced a 12-month share repurchase program. The 6.1% increase in sales for the fourth quarter was driven by the growth of our store network by 0.1% increase in consolidated same-store sales, on top of a 9.3% increase in the fourth quarter of last year.Same-store sales in the fourth quarter 2011 for Dick's Sporting Goods were down 2.5%. Golf Galaxy same-store sales were up 9%. And e-commerce sales were up 52%. The 2.5% same-store sales decline at Dick's was primarily driven by lower sales and cold weather accessories, cold weather apparel and boots due to the unseasonably warm weather. Partially offsetting this decline was continued strength in athletic apparel and footwear. On the inventory front, we ended the year with an increase in inventory per square foot of 6.2%. A little more than half of this increase was due to the lower-than-anticipated sales of cold weather related product. Also contributing to the higher inventory level was an increase in baseball inventory, due in large part to the anticipated pick-up in sales from the recent VAT regulation change. We pulled forward spring cleats and an increase in inventory for our e-commerce business as we anticipate growing sales momentum. Importantly, clearance inventory per square foot was down 2.1% at the end of 2012 compared to 2011. We continue to make progress in advancing our three growth drivers, which are to expand our store base, strengthen our e-commerce business, and continue to develop our margin rate accelerators. As to store expansion, we've opened new Dick's Sporting Goods stores at the rate of 8.1% in 2011. In 2012, we expect to open approximately 40 Dick's Sporting Goods stores, reflecting a slightly higher growth rate. Looking at the longer-term, we believe we have the potential to open more than 400 additional stores over the next several years, giving us approximately 900 total stores in the United States. Read the rest of this transcript for free on seekingalpha.com