Matt Fassler – Goldman Sachs Robby Ohmes – Bank of America Merrill Lynch Christopher Horvers – JP Morgan Michael Lasser – Barclays Capital Kate McShane – Citigroup David A. Schick – Stifel Nicolaus Jim Duffy – Thomas Weisel Partners Michael Baker – Deutsche Bank Analyst for John Zolidis – Buckingham Research Jack Murphy – William Blair Eric Tracy – BB&T Capital Markets Kristine Koerber – JMP Securities N. Richard Nelson – Stephens, Inc. Mark Mandel – FTN Equity Sean McGowan – Needham & Company Sam Poser – Sterne, Agee & Leach Dan Wewer – Raymond James & Associates Chris Svezia – Susquehanna Financial Group Reed Anderson – D. A. Davidson & Co. Joe Feldman – Telsey Advisory Group Mitchell Kaiser – Piper Jaffray

Welcome to the second quarter 2009 Dicks Sporting Goods Incorporated earnings conference call. My name is Lauren and I’ll be your operator for today. At this time all participants are in listen only mode. We will conduct a question and answer session towards the end of this conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I’d now like to turn the presentation over to your host for today’s call Anne-Marie Megela, Director of Investor Relations.

Good morning to everyone participating in today’s conference call to discuss the second quarter financial results for Dicks Sporting Goods. Please note that a rebroadcast of today’s call will be archived on the investor relations portion of our website located at www.DicksSportingGoods.com for approximately 30 days. In addition, as detailed in our press release, a dial in replay will also be available for approximately 30 days. In order for us to take advantage of Safe Harbor rules, I would like to remind you that we have included in today’s discussion some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including but not limited to our views and expectation concerning our future results. Such statements relate to future events and expectations and involve known and unknown risks and uncertainties. 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 Form 10K for the year ended January 31, 2009. We disclaim any obligation and do not intend to update these statements. We have also included some non-GAAP financial measures in our discussion today. Our presentation of the most directly comparable GAAP financial measures calculated in accordance with generally accepted accounting principles and our related reconciliation can be found on our website. Leading our call today will be Ed Stack, Chairman and CEO. Ed will discuss our second quarter financial and operating results and review the guidance contained in our press release. Also joining us this morning are Joe Schmidt, President and Chief Operating Officer and Tim Kullman, Executive Vice President Finance Administration, Chief Financial Officer and Treasurer. Joe will review our store development program. Tim will then discuss in more detail our financial results. I’d now like to turn the call over to Ed Stack.

I’m pleased to report that in the second quarter we delivered comp sales and earnings results that exceeded our expectations. We generated net income of $42.4 million or $0.36 per diluted share excluding integration costs as compared to our previous estimate of $0.28 to $0.31 per diluted share. Net sales for the second quarter of ’09 increased by 3.7% to $1.13 billion due primarily to the opening of new stores and the addition of eCommerce sales partially offset by a 4.1% decrease in comparable store sales. The 4.1% consolidated same store sales decline consisted of a 3.2% decrease in Dicks Sporting Goods stores and an 11.1% decline in the Golf Galaxy Stores. As a result of an increase in sales and gross profit dollars as well as better operating leverage, our Dicks Sporting Goods stores generated a $0.02 improvement in earnings in the second quarter this year compared to the second quarter of last year or approximately a 6% increase. This performance which was better than our previous expectations was driven by our effective traffic driving, marketing and merchandising strategy, inventory management and expense controls. Golf Galaxy’s performance was also better than anticipated generating earnings greater than or original expectation of $0.02 per share. This was driven by higher than anticipated sales and improved operating leverage. Once again, our inventory levels were under tight control, down 5.5% per square foot at the end of the second quarter 2009 as compared to the end of the second quarter of ’08 on a consolidated basis. Looking to the rest of 2009 we are increasing the expected number of new stores as well as raising our earnings guidance and expected same store sales. Many of you have heard us say that the difficulties of the current challenging economic environment can also bring opportunities.…

In total for 2009 we now expect to added approximately 24 new Dicks Sporting Goods stores compared to our previous expectation of 20 new stores. As Ed mentioned, we have increased our new store expectations due to our decision to accelerate our growth in the Pacific Northwest. We plan to open a total of six new stores in the Pacific Northwest in the third quarter of which one store was already included in our previous expectation of 20 new stores. Also, we have moved one new store that was originally scheduled for the third quarter of ’09 to be included in our 2010 new store plan. In the second quarter of 2009, we opened a total of four new Dicks Sporting Goods stores and converted our Chick’s Sporting Goods stores to Dicks Sporting Good stores. In the first half of the year we have opened 13 new Dicks Sporting Goods stores, added one Golf Galaxy store, converted the Golf Shop to a Golf Galaxy store, closed two Chick’s Sporting Goods stores and converted the remaining Chick’s Sporting Good stores to Dicks Sporting Goods stores. At the end of the second quarter, we operated 409 Dicks Sporting Goods stores with 22.7 million square feet and 91 Golf Galaxy stores with 1.5 million square feet. New store productivity for the second quarter was 72.5% and includes Dicks Sporting Goods stores only. This is an improvement from the second quarter of last year in which new store productivity was 69.4%. In the third quarter we anticipate opening 11 new stores. At this time we expect all 2009 new store openings to be completed by the end of the third quarter. Roughly 30% of the new Dicks Sporting Goods stores in 2009 are anticipated to be in new areas. I will now turn the call over to Tim to go through our financial performance in more detail.

Sales for the quarter increased by 3.7% to $1.1 billion. Consolidated same store sales were -4.1%. Dicks Sporting Goods stores comp declined 3.2% and Golf Galaxy’s declined 11.15. The comp store sales decline at Dicks Sporting Goods stores was driven in part by a 1.3% decline in transactions and a decline in sales per transaction of 1.9%. Cannibalization impacted comps by less than 1%. Consolidated gross profit of $309.9 million was 27.5% of sales or 193 basis points lower than the second quarter of 2008. This decline was primarily driven by a decrease in the merchandise margin and the deleverage of fixed cost. The merchandise margin decline of 121 basis points was primarily driven by clearance activity at the Golf Galaxy stores and promotions at Dicks Sporting Goods stores. Fixed costs deleveraged 67 basis points. As a result of our expense control efforts, SG&A expense of $238.7 million or 21.19% of sales which was 69 basis points lower than the last year’s second quarter. The $238.7 million in SG&A expenses includes approximately $5 million from the eCommerce business. Pre-opening expenses declined 20 basis points as a percent to sales in the second quarter due to fewer store openings scheduled this year compared to last year. Non-GAAP operating income before integration costs decreased to $69.6 million. As a percent of sales, the non-GAAP operating income margin of 6.18% was 103 basis points lower from the second quarter of 2008. Let’s move to the balance sheet; we ended the quarter with $19.5 million in outstanding borrowings on our $440 million line of credit, even after repayment of $172.5 million from our senior convertible notes in the first quarter of this year. Our borrowing rate is LIBOR plus 75 basis points and averaged 1.32% in the second quarter. Inventory per square foot was…

(Operator Instructions) Your first question comes from Matt Fassler – Goldman Sachs. Matt Fassler – Goldman Sachs: Two questions if I could, the first relates to the promotional tenure of the business, it sounds like you continued to promote to drive business. If you could talk about the consumer’s need for promotions in order to buy and how you would consider the promotional tenure in the second quarter compared to the prior quarter?

I think it’s still the consumer is still looking for a value out there. We tried to provide the customer with what they were looking for. But, a big part of the margin rate deterioration was the clearance activity at Golf Galaxy as we’re getting rid of a significant amount of old stale inventory from the previous team that was running Golf Galaxy. Matt Fassler – Goldman Sachs: How did the margin decline at the core Dicks store, I guess the merchandise margin declined comparing the second quarter from the first?

Relatively the same. Matt Fassler – Goldman Sachs: My second question relates to real estate, it sounds like the incremental expansion is taking out existing competitive capacity that’s come on the market. As you think about conventional growth how are you contemplating traditional store openings now that development in new power centers has moderated? Can you also comment on what you are seeing in terms of the economic equation as you look at rents versus landlord subsidies for your new stores?

What’s happening out there right now is we’ve got a blend of new development and existing real estate. We think the new development piece is going to continue to be difficult. As far as rents, we’re finding that rents are coming down but then on the flip side of that we’ve got rents coming down but there are also landlords seem to be having a bit less capital to invest and we’re being very judicious on how we approach this. Matt Fassler – Goldman Sachs: Is that I guess leading to more upfront investment in new stores and less on the back end from rent or are you simply changing store design in any way to accommodate I guess the smaller subsidies that are available?

We’re not changing the store design and we think there could be some difficulty getting landlord allowances but as we take a look at this we’re getting meaningfully lower rent numbers with us putting some investments in. So, there are no differences on the back end, we may have to put a little bit more money in upfront than we have in the past but the rent savings, if you will, will be immediate.

Your next question comes from Robby Ohmes – Bank of America Merrill Lynch. Robby Ohmes – Bank of America Merrill Lynch: Ed, I was hoping you could give us more color on the categories that did well. I’m especially curious about how guns and ammo performed during the quarter as well as the branded apparel stuff with the Nike and Under Armour in particular and footwear. But, anything else to call out that helped you achieved those much better than expected same store sales. Then, if you would be generous and maybe give us some help on maybe August is going, back to school, that would be great as well.

The gun and ammunition business continues to be positive. We’re very pleased about the whole outdoor category so whether it’s guns, ammunition, water sports, the whole outdoor category has been positive. Some other categories, the footwear business has been better than anticipated but still is slightly negative and the apparel piece has been slightly negative but better than we had anticipated. So, even though we had indicated that the comps were better than we anticipated, they were still -3.2 so there wasn’t a lot in the positive column but as you can see from the performance, we see improvements. As far as August goes, we don’t ever comment on a quarter in progress but we’re confident in the guidance that we just laid out here for the third quarter. Robby Ohmes – Bank of America Merrill Lynch: Ed, within apparel and footwear, are the customers responding more to promoted product or are the highest price point Under Armour and Nike apparel and footwear items still performing well? Any color there you can give us?

I think it’s been a bit bifurcated where you’ve got some of those enthusiast athletes are still buying some of the higher end product and then there’s been some lower end opening price point business has picked up a little bit based on what’s been happening in the economy. We’re providing our customers with the option for either one of those on either end of the spectrum.

Your next question comes from Christopher Horvers – JP Morgan. Christopher Horvers – JP Morgan: Could you talk about on the category side has your thinking on apparel and footwear changed as you think about the next six to 12 months with footwear showing some increased volatility? You did talk about it’s better than you expected but do you think directionally do you worry about those comparisons in the back half of the year?

Actually, we don’t. We think it’s been stable and again, we’re not in the real fashion end of the footwear business. Our footwear business is primarily driven by that core athlete so the kid who is playing basketball and that core runner. Our business is probably going to be a bit more stable in footwear side than some other peoples. Christopher Horvers – JP Morgan: Thinking about Golf Galaxy, nice sequential improvement in comps 2Q versus 1Q. What drives that and is that something that once the promotional posture and you clear the inventory out do you think that could revert to lower levels as you think about the next six to 12 months?

Actually we don’t, we’re pretty confident that the Golf Galaxy business will continue to show improvement. The Dicks Sporting Goods business was meaningfully better than the Golf Galaxy business and the Golf Galaxy business was better in Q2 than it was in Q1. So, what we’ve got planned from assortments and what we’re doing on the promotion side and communication to our customers, we think that we’ll see continued improvement in the Golf Galaxy business. Christopher Horvers – JP Morgan: Finally, as you think about the fourth quarter, within your guidance it does seem to imply a bit of a two year slowdown. Is there something there from the promotional side, is it the guns or is it just being conservative as you think about the holidays?

I think it’s a combination of things. We will be cycling through the gun and ammunition piece which we think those will be difficult comparisons then the consumer out there is still some uncertainty out there based on what is going on in Washington today whether it is through the healthcare reform, taxes, I just think there’s fair amount of uncertainty on how the consumer is going to react when some of these things happen or don’t happen.

Your next question comes from Michael Lasser – Barclays Capital. Michael Lasser – Barclays Capital: Ed, you kind of opened the door to 2010 saying that you expect earnings for next year to be better than this year. Maybe you can discuss a little bit more what’s inherent in that expectation, is that that comps continue to improve and turn positive at some point? Does that also imply that the promotional environment comes a little bit easier so that there’s less pressure on the merchandise margin?

Well, as I said we’re not prepared to give guidance for 2010, all we said is we wanted you to see some of the investments we’re going to make and we anticipate even with the revised guidance for this year we expect 2010 to be better than 2009. Now, there are still a number of uncertainties out there on how the consumer is going to react to some of the programs that are coming out of Washington whether they will be positive or negative. But, we do feel that there continues to be some improvement in our business and we’re going to be going up against easier comparisons as we get in to next year so we just wanted to give a little color to what we have planned. We’re not prepared to go in to any meaningful guidance for 2010. Michael Lasser – Barclays Capital: Then, there’s some changes in the underlying margin for the business where lease rates are coming down but there’s maybe more capital investment needed. At the same time there’s been some pressure on the merchandise margin due to the promotional activity. But, at some point that should ease and perhaps these investments will make customers sticky. I guess what I’m getting at is do you see some sort of change in the long term margin outlook in the business given some of these underlying dynamics?

We don’t see anything meaningfully negative in our margin outlook going for the balance of this year and in to next year assuming that the economic environment remains as stable as it is right now. Michael Lasser – Barclays Capital: One last one, given the change in the competitive landscape some folks are abandoning the business. Does that change your thinking on how the long term market opportunity for the number of Dicks stores? I think historically you talked about 800 so could that number be higher? Then just lastly, are the Steelers going to win the Super Bowl this year?

Let me go to the store count first, we’re not changing our store count right now but as things continue to consolidated there certainly is some upside in the store count. As far as the Steelers winning the Super Bowl, we’re hoping that they do. We’re all Steelers fans here.

Your next question comes from Kate McShane – Citigroup. Kate McShane – Citigroup: Can you talk a little bit about what the competitive environment is like in the Pacific Northwest now that Joe’s is gone?

There’s not a tremendous amount. The only other big box retailer out there is TSA. It was TSA and Joe’s and Joe’s has vacated the business so we think it gives us a great opportunity to go in there and penetrate the Pacific Northwest and we’re doing it a pretty rapid rate. Kate McShane – Citigroup: By the time you enter the region, the liquidation of Joe’s will be over?

Joe’s is closed now, that’s all over. A number of the stores we’re opening there are in former Joe’s locations. Kate McShane – Citigroup: Then, you had mentioned on your last call that during the third quarter we would see some floor space changes that you made at the expense of the fitness space. Can you update us on how the fitness space may have changed in some of your stores?

We’ve reallocated some of the space to the bike business and we’ve taken some space out of fitness and moved our tennis area over there giving more space for our team sports area. That’s been the biggest piece. We’ve done that in over 200 stores so far. Kate McShane – Citigroup: With plans to do it in all 409 stores?

We’re looking at that yes. This has been pretty positively received so we anticipate rolling it out further. Kate McShane – Citigroup: Then my last question is that it looks like there was a meaningful decline in accounts receivables year-over-year. Can you help us understand that decline?

When we open up less stores, we also have less receivables for tenant improvement allowances and construction allowances so that is the primary reduction in accounts receivable.

Your next question comes from David A. Schick – Stifel Nicolaus. David A. Schick – Stifel Nicolaus: The parks service has been talking about a pretty meaningful jump in visits and your business is getting better, can you take out parts of your business that might be affected by that sort of phenomena if you want to call it, sporting goods is kind of cocooning or what the park service is talking about? Can we link anything together there or do you think we can’t pull that’s out of what’s going on with your stores?

I don’t know that I would draw a meaningful comparison although, as I said, the outdoor business, the camping business, the boat business, all that was very positive and I suspect there are a lot of people that are using that equipment in the national parks. David A. Schick – Stifel Nicolaus: Then the footwear related, the hiking footwear and all of that?

I don’t think there’s any meaningful comparison. I wouldn’t draw too much from that.

Your next question comes from Jim Duffy – Thomas Weisel Partners. Jim Duffy – Thomas Weisel Partners: Can you speak to the ticket versus traffic trends in the quarter?

On our comp of -4.1, the transaction decline was 1.3 and the ticket decline was 1.9. Jim Duffy – Thomas Weisel Partners: Then private label trends, do they remain favorable on a year-to-year basis or is the trade down affect benefiting your private label programs at all?

We indicated several quarters ago due to competitive reasons we weren’t going to lay out our private label penetration. But you would look at it as being relatively similar to what it was in the past. Jim Duffy – Thomas Weisel Partners: Then speaking with regards to the store expansion opportunity, I think you mentioned 24 new stores in 2010. If you wanted to accelerate that pace could that happen or is retail development a gating factor at this juncture?

It’s possible that we could accelerate that but right now based on the balance between tenant improvements and the capital we would want to put in, we’re comfortable at relatively 24 right now. Jim Duffy – Thomas Weisel Partners: Then within that 24, what’s the mix of new development versus repurposed real estate?

Right now it looks like it would trend a little more on redevelopment product as opposed to new product. But, there is some new product development in there. We had a real estate committee meeting yesterday and we had a number of sites that came in to the real estate committee that was new development complete with tenant landlord allowances, our traditional real estate. Jim Duffy – Thomas Weisel Partners: Can I ask you to characterize some of the existing real estate where you’re seeing opportunities? Is it closed department stores, old Circuit City stores, what are you finding that fits with your format?

It’s a combination of all of those. It’s old department stores, we’ve got Mervyns, we’ve looked at [inaudible], we’ve got Linens, we’ve got some larger Circuits or some Circuit City that were next to Linens that we were able to put the two sites together. So, it’s really a combination out there. It takes a fair amount of work to get out there and get these deals put together right now. Jim Duffy – Thomas Weisel Partners: Final question, is there a way that you can use your ever strengthening balance sheet here to change the new store model and accelerate the growth?

We could but right now with the environment we’re probably a little more cautious than some. Right now at this date we’re comfortable saying 24 and if things change we could move it up if something comes up opportunistic we could move it up similar to what we did this year when we had the opportunity for the Joe’s stores in the Pacific Northwest.

Your next question comes from Michael Baker – Deutsche Bank. Michael Baker – Deutsche Bank: A couple of questions, one the inventory for foot is down but the rate of decline is sort of leveling off. What should we expect in the third and fourth quarters? Do you start to rebuild some of the inventory?

We look at the third quarter being down nominally over the third quarter of last year and we would look at next year, at the end of the fourth quarter, being relatively flat minus whatever investments we would be making in our ecommerce business. Michael Baker – Deutsche Bank: Then a couple of golf questions, one the Golf Galaxy clearance was that as impactful in the second quarter as it was in the first quarter? And, more importantly, in the third quarter I think you had said in the past it should be done by September, maybe half way through the quarter, so should the margin impact be less tense in the third quarter than it was in the second quarter?

I think at Golf Galaxy it will be relatively similar in the third quarter as it was in the second quarter. The reason being is that as you get further in to the third quarter the business drops off. So, the first two thirds of the third quarter are much higher than the last third of the third quarter if that makes sense. So, the promotional activity as a percent of the total business will be greater in August and September than when you include October. Michael Baker – Deutsche Bank: Finally on the golf business, the golf business within the Dicks stores was that better or worse than the Dicks average comp?

Better.

Your next question comes from Analyst for John Zolidis – Buckingham Research. Analyst for John Zolidis – Buckingham Research: I just wanted to know, how are you planning your promotional activity in the fourth quarter?

Similar to what we did in the first and second quarter. We still think it’s going to be somewhat promotional out there. We’ve bought a number of products for that promotional activity so we don’t see a meaningful change in the third and fourth quarter versus what we saw in the first and second. Analyst for John Zolidis – Buckingham Research: Are you going to be aligning your promotional strategy for Dicks and Golf Galaxy going forward?

No, Golf Galaxy will have a different strategy than Dicks.

Your next question comes from Jack Murphy – William Blair. Jack Murphy – William Blair: I wonder if you could just provide a little bit more color on the expense control, the expense per square foot growing more slowly in the second than the first, can you talk a little bit more about the drivers around that? Then also, your ability to manage that expense control as you reaccelerate the square footage?

If we take a look at the second and what we anticipate in the third and fourth quarters, in the second quarter most of the expense leverage, that 69 basis points of SG&A actually came from store payroll leverage and to a lesser degree from advertising expense. As we indicated in the past, where we are expecting to gain most of our leverage was those two categories as well as pre-opening expenses. Jack Murphy – William Blair: Then just one housekeeping question, I don’t know if you mentioned what you expect your full year tax rate to be?

Full year tax rate will be slightly less than 40%.

Your next question comes from Eric Tracy – BB&T Capital Markets. Eric Tracy – BB&T Capital Markets: Just a follow up on the sort of recycling of the Joe’s doors, I believe there are roughly 30 in total, I’m not sure if you can sort of disclose how many of those you feel like you can take over and sort of the timing around that as we get in to ’10?

We’ll, we’ve announced that we will open a number of those stores this fall so we’ll open a grand total of six. We are looking at other opportunities for 2010. We do have a couple of deals that are pretty close and we’re going to continue to look at the other opportunities up in the Northwest be it Joe’s and/or any other opportunities. Eric Tracy – BB&T Capital Markets: So there is still incremental on top of that six that will be done in Q3 that could flow through?

There will be some but not till spring, the calendar 2010 year. Eric Tracy – BB&T Capital Markets: I think you talked about in the prepared remarks sort of the incremental $30 to $35 million that was delayed this year, sort of restarting that next year. Sort of what is the cadence and timing of when we should think about that happening or manifesting in ’10?

You’d look at that as pretty well flat lined throughout the entire year. We’ll be ready to go with this, we may even get some of this started in this fiscal year but you’d look at it as pretty evenly spaced throughout the year.

Your next question comes from Kristine Koerber – JMP Securities. Kristine Koerber – JMP Securities: A couple of questions, first on Golf Galaxy, the five or so new stores planned for next year, are those all in new markets?

There will be a couple of new markets and a couple of fill in markets. Kristine Koerber – JMP Securities: Then the merchandise adjustment that you’re making over at Golf Galaxy, are you still anticipating completion by the end of the third quarter?

Yes. Kristine Koerber – JMP Securities: Then just lastly, geographically were there any notable trends to the upside or downside across the Dicks stores?

Nothing worth talking about. It was all pretty similar in the second quarter to what we saw in the first quarter.

Your next question comes from N. Richard Nelson – Stephens, Inc. N. Richard Nelson – Stephens, Inc.: Can you quantify the profit impact of Golf Galaxy? I believe your guidance was $0.02 in the quarter compared to $0.08 a year ago and I know you mentioned you beat that expectation.

We indicated in the first quarter that we expected to make about $0.02 on Galaxy in the second quarter this year, we actually made approximately $0.04. That compares to approximately $0.08 in the prior year quarter last year. N. Richard Nelson – Stephens, Inc.: Do you think the industry is actually reviving or is it more specific to Golf Galaxy and the strategies that you’re deploying?

I think there’s a couple of things going on out there. We’re coming up against a little bit easier comparisons to last year. There’s also been a number of the smaller stores that have closed. I think Goldsmith’s call they quantified it, I can’t remember exactly what they said, but there’s been a number of smaller independent golf shops that have gone out of business and there are more that will continue to go out of business. N. Richard Nelson – Stephens, Inc.: Can you also speak to the sales trends since you reassorted the stores?

You’re talking about the Golf Galaxy stores? N. Richard Nelson – Stephens, Inc.: Yes.

We’re still in the process of doing that so it hasn’t been completed yet. We expect that to be done by the end of the third quarter.

Your next question comes from Mark Mandel – FTN Equity. Mark Mandel – FTN Equity: Just looking at the balance sheet, your accounts payable ratio has increased for two consecutive quarters on a year-over-year basis. What can we expect by the end of the year for example?

Well, I think you can still expect that metric to improve. At the end of the year if the inventory, as Ed has already mentioned, is flattish it might be slightly less. Keep in mind that we’re going to be adding eCommerce inventory in to the end of the year for spring orders. So, it’s going to be flat at the end of the year probably to a little less. Mark Mandel – FTN Equity: Can you quantify those eCommerce sales?

eCommerce sales are less than 2% of the business. Mark Mandel – FTN Equity: Recognizing your geographic orientation, have you seen any impact from the shift in the tax free holidays in the southern states?

There was a little but nothing meaningful. Mark Mandel – FTN Equity: Then finally, as far as sale lease back activity can you give us any detail? And, given the situation that the landlords are in, how is that playing out in that effort?

For us sales and lease back activity is restricted to furniture and fixtures. We are not in the process today of self development and then resuming a sales lease back for our real estate.

Your next question comes from Sean McGowan – Needham & Company. Sean McGowan – Needham & Company: A couple of quick questions if I can, the costs that were taken related to merger and acquisition costs in the quarter, is that in line with what you had expected at the beginning of the quarter? And, is there any change in your outlook for the full year? Then second, given the reduction in debt, can you give us some help on what the outlook would be for year-on-year comparisons in interest expense for the balance of the year?

In terms of the interest expense for the year, you can see where it ended up in the quarter. It’s going to be much less than the prior year. We were looking at about $14 million last year and it’s going to be meaningful less than that in the $4.5 to $5 million range.

Your next question comes from Sam Poser – Sterne, Agee & Leach. Sam Poser – Sterne, Agee & Leach: I’ve got a few here, in the Pacific Northwest, are those rents, those deals there significantly better rents than what you were getting in the other stores that you opened during the year given the vacating of those properties?

They’re less than what we’ve been experiencing, yes. Sam Poser – Sterne, Agee & Leach: Then with the merchandise mix change given the adjustment of the fitness areas and so on, will that help overtime, and the other changes you’re making help the margin mix of the company given I would think those are a little lower margin goods being replaced by better margin goods?

Actually, the fitness business margins are really very good. Where we think that we’ll start to see some margin rate improvement is as the gun and ammunition business becomes a smaller percent of our business. As we said, we’re going to be coming around cycling that and we think those are going to be fairly difficult comparisons and those are among the lowest margin rates that we have in guns and ammunition. Sam Poser – Sterne, Agee & Leach: You have a line item of cost of construction and construction in progress on your balance sheet. Can you break that out for us and give us some details what that is?

Most of that is related to some of the construction going on at our new headquarters. As we go through the end of the year what you will see is, depending on when we open, which is either going to be January or February of 2010 we will end up with a capital lease on our books which that construction allowance will be part of. Sam Poser – Sterne, Agee & Leach: Lastly, can you discuss given the changes, the improvement in the accounts payables, can you discuss any differences given the promotional environment? Any changes in the kind of vendor support you’re seeing maybe on a year-over-year basis and your expectations of vendor support in a general sense?

We see no change in vendor support as we take a look at this and we bring meaningful programs to a number of our vendors. They’ve been enthusiastically supporting them so we don’t see any change there.

Your next question comes from Dan Wewer – Raymond James & Associates. Dan Wewer – Raymond James & Associates: Ed, I recognize the 4% drop in same store sales was better than anticipated but it looks like that demand is still somewhat tepid. From your perspective are you actually seeing a pickup in demand for sporting goods or do you think that your original forecast was perhaps overly conservative?

Well, I think the consumer is feeling a little bit better. I won’t say they’re feeling great but I think the consumer is feeling a little bit better. I think we’ve done a good job with our marketing programs and the merchandising assortments that we brought in to the stores and I think we’ve taken some market share. So, I think our merchandising team, stores, marketing team, etc. have just done a very good job of gaining market share. Dan Wewer – Raymond James & Associates: The second question, you noted a significant improvement in golf sales inside the big stores, how much of that is benefitting from the promotions from TaylorMade and Callaway and if they’re subsidizing those promotions for you? In other words, are you able to maintain your original margin goals?

We’re able to retain the vast majority of our original margin goals and certainly the promotional activity and the support that we’ve gotten from and we’ve given the brands that we do business with, it’s really a mutual partnership between the brands that we do business with and us. These promotions have certainly helped the golf business. Dan Wewer – Raymond James & Associates: Then I think the last question I have, also related to Golf Galaxy and the repositioning, will your private brands Maxfli, Slazenger and Walter Hagen, are they going to have a bigger role in the remerchandised stores than they had in the past when it was primarily focusing on brands?

In Golf Galaxy we’ll still be focusing primarily on the key brands. The Golf Galaxy format is really for that enthusiast golfer. We think that the brands play a very important role in that business. Our private label brands will augment some of the aspects of the Golf Galaxy business but Golf Galaxy will still be primarily a branded shop. Dan Wewer – Raymond James & Associates: So the brands like McGregor that have gone away, that’s what’s going to be replaced with your private brands?

Yes.

Your next question comes from Chris Svezia – Susquehanna Financial Group. Chris Svezia – Susquehanna Financial Group: Ed, I just had a question first on the fixed conversion, can you just give us an update in terms of what you’re seeing, what’s working, etc. in those stores that have been converted to the Dicks concept?

We’re very pleased with the performance of the conversions we’ve done in California. Our footwear business has been pretty good, the team sports business has been pretty good. Overall, we’re really quite pleased. We have scaled back some other aspects of the concepts so the beach business isn’t nearly what it was under the Chick’s management team but we had had all of that planned. Right now we’re really pleased and will continue to invest in new stores in Southern California. Chris Svezia – Susquehanna Financial Group: When you think about Southern California and when you think about store openings for next year you talked a lot about Pacific Northwest is Southern California also a piece of that as well when you think about growth in the opportunity?

Obviously our investment in to Southern California with the acquisition of Chick’s we are going to continue to look at Southern California. We’ve opened two of our own stores there this year so we have two brand new Dicks stores that opened in the second quarter and we’ll continue to look at opportunities and how we can continue to invest in the market of Southern California. Chris Svezia – Susquehanna Financial Group: Tim, just two quick questions for you, I guess first on your comments about gross margin trend, I think you said third quarter will be relatively similar to second quarter. Did you make a comment that fourth quarter would be up, was that what I heard?

We said sequentially improved. Chris Svezia – Susquehanna Financial Group: The fourth quarter will be sequentially improved from the third quarter?

Correct. Chris Svezia – Susquehanna Financial Group: But likely still down?

That’s correct. Chris Svezia – Susquehanna Financial Group: On the SG&A side, when you talk about I think you said down in dollars does that include the pre-opening cost associated or is it just strict SG&A?

Both. Chris Svezia – Susquehanna Financial Group: So it includes both?

Yes.

Your next question comes from Reed Anderson – D. A. Davidson & Co. Reed Anderson – D. A. Davidson & Co.: On the eCommerce business Ed, should we think about that from a P&L standpoint is that essentially profit neutral this year or would it be actually running at a little bit of a loss this year?

It could run at a bit of a loss this year as we get it up and running but nothing meaningful. Reed Anderson – D. A. Davidson & Co.: Then you talked about some of the cap ex for next year that you highlighted that would be some of that oriented towards ramping that up. Is that just simply getting infrastructure in place to carry to the next level or is there something beyond that?

There’s people infrastructure, there’s also technology that will be ramping up here for the eCommerce business also. Reed Anderson – D. A. Davidson & Co.: Then on the question earlier on payroll and Tim you had commented the savings there were store payroll, I was curious is that more a reflection of you just really flexing that payroll as much as you can right now in this environment or are there actually some opportunities that are sustainable that you’ve found some ways to run these stores with less people or whatever?

It’s more the fact that we’ve been able to flex in this current environment. You can see how the sales have increased so even though we have flexed the percent of sales lower, we have adjusted the payroll so that it will support the sales we are generating and because of that we are still leveraging. Reed Anderson – D. A. Davidson & Co.: Then lastly, can you just give us an update, the Jordan shop in shops, I think you’ve been pleased with where that was so far, just where are we in terms of number and just any commentary would be great?

The Jordan shops, we’ve been pleased with all the Nike shops. In the Jordan stores we’ve got about 60 stores there right now. Reed Anderson – D. A. Davidson & Co.: Is it conceivable that you would add more or is that kind of where you want to be right now?

It would be conceivable we would add more. Reed Anderson – D. A. Davidson & Co.: This year or are we looking at next year?

It would be next year.

Your next question comes from Joe Feldman – Telsey Advisory Group. Joe Feldman – Telsey Advisory Group: I had a couple of quick questions for you, in terms of the store productivity, it was great to hear that it was up a little bit. I’m just curious what you guys think was driving that? Did you do anything different with pre-opening or with the promotional environment? Anything that you saw that drove the uptick?

We did get a bit more aggressive in our pre-advertising campaigns being closer to what we use to do two and three years ago as opposed to the way we’ve been doing it. We had cut back some of that pre-opening advertising and we layered that back in and its certainly been helpful. Joe Feldman – Telsey Advisory Group: Then on the golf business, we like to look at the rounds played and it seemed like it was holding up fairly well year-to-date although it recently down ticked a little. I guess we were interested to hear how you think about golf and the trends and are the improving trends you’re seeing truly sustainable or do you think it’s just a bit of an aberration?

Well, we think the trends that we’re seeing are sustainable and we think there’s a market share shift coming to us in both Dicks and Golf Galaxy as we take market share from some competitors then also as some other small independent competitors are going out of business. Joe Feldman – Telsey Advisory Group: Then the last question, a little more kind of longer term in nature, just thinking about the store potential, at some point I would think you guys would want to start opening smaller boxes. I guess I was just kind of wondering if you thought about that yet and at what point do you think you do need to open smaller boxes, if at all? I would think at some point productivity would be more enhanced, maybe you can squeeze out a certain category that would help you get in to certain markets that you otherwise wouldn’t be in. Just any thoughts about that? I know you have a large box but maybe even having a smaller box going forward?

At the present time we’re not looking to opening up any smaller box stores as a matter of strategy. We feel that the box that we have today and as we continue to look at optimizing space requirements for these particular sports and categories but we’re not talking about opening any smaller boxes right now.

Your next question comes from Mitchell Kaiser – Piper Jaffray. Mitchell Kaiser – Piper Jaffray: On the merchandise margins, could you help me with Q2, just what it was in terms of clearance and how that should look going forward as well? I apologize if you mentioned that earlier.

We haven’t commented and for competitive reasons we’re not going to do that. But, our clearance inventory is actually down about 7% versus last year and we expect it to be able to remain kind of in that zone and we don’t expect to have the clearance activity to become any more meaningful than it has in the past couple of quarters. Mitchell Kaiser – Piper Jaffray: So then Tim’s comment on the margins down similar rates Q2 to Q3 was that the merchandise margin you were talking about or the aggregate gross margin?

The question was the gross margin, that was what I was speaking to. Mitchell Kaiser – Piper Jaffray: Then you mentioned the investment in cap ex for 2010, would you be willing to share a number what the growth in that number might look like then?

Not at this point. We wanted to give everybody a look at what those expenses would be associated with these initiatives we’re putting in place but from a cap ex number we’re not going to provide 2010 guidance. But, we thought it would be appropriate to give you guys that look of some of the things we’re going to be doing in 2010 and how confident we feel about our business. Mitchell Kaiser – Piper Jaffray: So then looking at 2009 certainly the new stores, the 24, anything in terms of kind of one time investments that you made?

In 2009? Mitchell Kaiser – Piper Jaffray: Yes, in this year.

Nothing, no.

Your next question comes from Matt Fassler – Goldman Sachs. Matt Fassler – Goldman Sachs: Just a couple of follow ups here, can you give us a sense as to what you saw by market from the geographical perspective whether they were particularly strong or softer parts of the country for you?

Matt, to kind of get in to this for competitive reasons we’ve never done that. But, similar to what we’ve talked about before, some of the areas of the country that have been harder hit by either the automotive industry or by the housing industry you could draw a correlation that those are the markets that have been a bit more difficult from a performance standpoint. Matt Fassler – Goldman Sachs: Also, your performance in California it sounds like you were happy with how you did there. As we try to quantify that, when you talk about the new space productivity number for the Dicks business since you transitioned Chick’s in to the core store group, is that included in the new spaced productivity or are those truly new ground up stores that you consider in those numbers?

Since we’ve converted they are included in the 72.5%. Matt Fassler – Goldman Sachs: Has that helped those numbers given their level of productivity?

It hasn’t hurt the numbers. Matt Fassler – Goldman Sachs: Then the Internet business, just to get a sense, is that number included in the comps or is that out of the comps still?

It is not include in the comps. Matt Fassler – Goldman Sachs: What about next year?

After 13 months of the sales being recorded by Dicks Sporting Goods, 13 months after that they will go in to the comps just like a new store will. Matt Fassler – Goldman Sachs: Is that business growing at a faster rate than the overall company, slower rate, any color on its progress?

As of right now it’s a bit slower and a big issue with that we believe is because of Nexus Matt. There’s a number of states where last year we did not have to charge sales tax or GSI did not have to charge sales tax but since we have operations in those states we have to charge sales tax now so that’s had some negative impact in the business which was planned for and is certainly in our guidance.

Your next question comes from Michael Baker – Deutsche Bank. Michael Baker – Deutsche Bank: A couple of quick follow ups, one the $30 to $35 million in expenses as you said on the call that you talked about, you did say expense in the prepared remarks, is that expense that goes through the income statement or cap ex?

It goes through the income statement. Michael Baker – Deutsche Bank: Mix I think impacted your gross margin a little bit last quarter, you didn’t highlight that this quarter can we assume mix had no impact?

Very little, meaningless. Michael Baker – Deutsche Bank: Lastly, as you did last quarter can you just aggregate – you do average in the fixed costs between rent and occupancy and then distribution and I think last time you said they were about even in terms of their deleverage, is that different this quarter?

We said this quarter that the fixed costs, primarily occupancy, were 67 basis points deleveraged.

Your next question comes from Sam Poser – Sterne, Agee & Leach. Sam Poser – Sterne, Agee & Leach: Just a follow up on the Pacific Northwest, how many stores do you see of the 31 GI Joe’s that went out, how many stores do you foresee in the neighborhood? And, how many in that neighborhood are within the guidance of next year?

We’ve got these that we’ve done right now, we’re working on several more but of the 31 we may have close to that many in that area but there are a number of the GI Joe stores that we would not want the real estate that they were operating in. Sam Poser – Sterne, Agee & Leach: So you see lots of opportunity in the Pacific Northwest?

We see a lot of opportunity in the Pacific Northwest, yes. Sam Poser – Sterne, Agee & Leach: You mentioned on a previous call you wanted to have about 70 stores in Texas, when do you see that growth reaccelerating or are you waiting on anything specific to happen there?

We still continue to invest in Texas so it’s just a matter of real estate. We’re not staying away from Texas for any other reason than just making sure we can find the appropriate real estate.

There are no further questions in queue. I’ll now turn the call back over to Mr. Ed Stack for closing remarks.

I’d like to thank everyone for joining us on our Q2 conference call. We look forward to seeing everyone when we release our Q3 earnings.

Thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Good day.