Judging by its second-quarter results, the integration of Galyan's by Dick's Sporting Goods (NYSE:DKS) appears to be going well. But has the merger enhanced Dick's overall competitiveness in the cutthroat sporting goods industry?

For the quarter, net sales grew 18%, while same-store sales jumped an impressive 6.5%. Galyan's stores were included in the comparable store calculations for the first time, so it will now be easier to discern how the company as a whole is performing. Earnings advanced 25% and beat management's earlier projections by a few cents. Better yet, management upped its full-year guidance by $0.03 on each end, to a new range of $1.84-$1.88, for a forward P/E of about 22. It also expects comps to advance about 4%, and expects to open an additional 40 stores for the entire year; Dick's currently has 268 stores nationwide.

Certain investors took a more bearish view on the strong same-store sales, arguing that Dick's was up against easy comparisons from last year's second quarter. They're also skeptical about paying more than 20 times earnings for a retailer in this very competitive industry. Investor interest still appears intact, as evidenced by Dick's somewhat lofty multiple and the recent buyout of a former publicly traded Sports Authority by a private equity shop and certain senior managers.

Dick's has earned a reputation as one of the more disciplined sporting goods firms, thanks to a rather seamless integration (so far) of Galyan's and recent debt reduction taken on to make the purchase. It also has solid cash flow generation capabilities, a great track record of profitable growth, and robust growth prospects. But the competition is hot on its trail.

Cabela's (NYSE:CAB) and Gander Mountain (NASDAQ:GMTN) are two fast-growing competitors, though they sell a wider assortment of goods aimed at outdoor hunting, fishing, and camping enthusiasts, in similar fashion to privately held Bass Pro Shops (which is 13% owned by publicly traded Gaylord Entertainment (NYSE:GET). More direct but smaller sporting goods retailers include Big 5 Sporting Goods (NASDAQ:BGFV) and Hibbett Sporting Goods (NASDAQ:HIBB).

As you can probably tell, the industry is crowded, and investors tend to punish the stocks at the first sign of any weakness in comparable store trends. As such, I'll side with the skeptics about the ability to earn outsized returns in the industry over the longer term. Dick's acquisition of Galyan's has helped, but its is not enough to fend off the competition indefinitely.

In conclusion, the multiple at Dick's has been and continues to be a bit too rich for my blood. Unfortunately, that means I have missed out on an impressive stock chart since the company's 2002 IPO. Nonetheless, I'll hold out for an earnings miss (or weak comps for a bigger margin of safety) to compensate for some of my concerns about the industry.

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to further discuss any companies mentioned. The Fool has an ironclad disclosure policy.