DICK'S Sporting Goods (DKS) 8 Mar 222021 Q4 Earnings call transcript

Hello, and welcome to the DICK'S Sporting Goods Fourth Quarter Earnings Call. My name Charlie and I will be coordinating your call today. [Operator Instructions] I will now hand you over to your host, Nate Gilch, Senior Director of Investor Relations, to begin. Nate, please

Good morning, everyone, and thank you for joining us to discuss our fourth quarter and full year 2021 results. be and our Navdeep Chief Chief Officer. will Hobart, Chairman; Gupta, call Financial President our Executive today's Ed Executive Stack, Lauren our On Officer; and Investor call XX approximately archived A investors.dicks.com months. will of located at today's in playback our Relations website for be

various information. annual with actual Any reminder, to conjunction last results considered statements refer Relations Investor to no materially these our finally, will statements. made to in to to statements during earnings risk are we that find XX-K call. should website release in uncertainties of a our admin factor any making forward-looking And differ and call. As a report which referenced in including a our discussions or and measures could obligation cautionary such few be these SEC, statements statements filings cautionary non-GAAP items. be Please on subject Form risks today's cause of our financial update and the our assume with We from any reconciliation this statements forward-looking in

sales will results fiscal calculated a XXXX be X-K in available full that XXXX. will our locations in and on for consolidated for our sales. for Beginning today, same-store our store relocated calculations, determining presents full same-store of consistent to fiscal calculation Investor be with provided sales on XXth that same-store month beginning reporting The same of relocated website. in QX practices. note operations. manner calculated excluded in in XXXX, our consolidated we In holistic consolidated a First, Relations our table relocated Prior fiscal XXXX, same-store until table same-store the fiscal the year method have filed remain market. also Beginning will locations view been will we have store update sales each sales store an quarterly our commenced its XXXX,

that shares diluted higher adopt not net in materially of per convertible will GAAP basis. impact and in do GAAP our effect XXXX, new a the we beginning rules senior these diluted QX, notes on also our earnings the Second, impact of expense share. changes to will resulting interest expect We due accounting lower

intent delivered this principal that effect of our we settlements, to can shares additional we bond the to reflecting the you notes closely debt the this, release and dilutive not Given notes details that Accordingly, as a our in more refer cash settle will reflects underlying our economics to morning. on the by we the issued do expect the be have press settlement. hedge believe that of

the an Investor for company, are new our investors Eastern at your before The Next, is earnings to XX, that, over future first of will I prospective that website to posted I XXXX, intent May our want provide serve call to differentiation. tentatively resource lastly, strategy planning today. to turn current highlight to publish Time. was and to the of our competitive XX market scheduling and with call purposes, this on we XXXX Relations presentation a earnings And a a.m. with now opens presentation subsequent results quarter Ed. investor as our And earlier overview

record sales Thanks, and Good We exceptionally morning, XXXX an everyone. Nate. strong earnings. had delivered and

X.X% Our from increase increase was consolidated prior XXXX. a which the same-store sales X.X% increased of top on XX.X%, in and year

last $XX.XX XXX% increase per a and represented Our over over year increase XXX% of share non-GAAP diluted earnings a XXXX.

and merchandise service and driving assortment, is competitive experiences. sustainable in-store transformational brand journey model, current the sales advantages that digital result we is an deliberate across Our a relationships, athlete-first approach, With significant growth. of have profitability commerce multiyear success built our

same Virtually nothing as capabilities, advance it our is We five the ago. omnichannel was technology personalization science, our data our also strategy. including years have invested growth to business in about

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our Our trajectory a market We'll to on our new continue and strategies set are working take business lead. and for share we've growth. extend

entering management best XXXX are we've stronger team had have and ever. We than overall ever the

I couldn't future excited the about Looking be ahead, business. more of our

thank to their now dedication of teammates to I'll over to like turn call the our work I'd concluding, unwavering business. our hard for Before Lauren. all and

who what team. Thank of you, thanks good and to is to accomplished great hard exceptional this been our want and morning, athletes incredible our our year I past for Ed, and echo everyone. none make our team has Ed's us people work without to passion, would dedication and At it business. DICK'S, our have been their possible to

our history. we the in largest results. delivered quarter In Now on to sales QX, our company's

of in sales record were year same-store and a the X.X% driven same sales quarterly increase $X.XX by consolidated was X%, top a nearly increase billion XXXX. in of Our XX.X% a period on which QX of of increase last

categories to brand growth QX demand. as supported us transactions continue meet average and Our consumer omnichannel in execution helped key world-class and strong comps portfolio, and both in platform ticket category increases by robust diverse our were and

this we counts X athletes athlete million for another quarter athletes strong, acquired of Our new approximately remain added during total the X.X and year. new million a

Our promotion drive granular higher merchandise to highly management and significantly our combined margin us product disciplined enabling rates. with is assortment differentiated

represented there we and basis versus Led major store expanded by or promotions, and XXX% of XX% over strong points over EBT In our by QX margin XXX period year share XXX our non-GAAP total, XXXX. XXXX. the quarter, margin, achieved and nearly no sales increase per of merchandise rate $X.XX we a were of earnings versus increase XXXX non-GAAP a the same quarter diluted site-wide During by margin XX%. merchandise points fourth and basis last

that's we've sales years, and the on driving over indicated, journey in transformational been a five profitability. growth Ed past sustainable As

our During we communities highly partners meaningfully and our differentiated engaging this our improved everything of culture enhanced We we including our access relationships teammates, merchandise do. implemented the highly leaned We stronger with assortment, drive product. to experiences. an to brand service key developing center focused time, into on and at put even in-store and athletes greater model

has our and in pursue significantly are two category with and We've the a growth is as improved sporting results a confidence improved and the our our our gaining market retailer, the our robust investment-grade portfolio And changes to completion $X.X invested pandemic key ample and Finally, momentum data agenda. of technology, we personalization fragmented we U.S. over largest long-term positioned and were Virtually well growth We're share XXXX company. meaningfully These before lead extend industry. large, performance our in versus And with business. the we levels. in and pre-COVID issuance, goods years. capabilities. entire entering growing sales flexibility accelerated driving higher omnichannel past categories. in rebaselined transformational continue share debt our DICK'S incredible science and digital to marketing platform our considerable gained have recent further billion well

our build establishes new the in detail within in address earnings remarks. guidance foundation our will Importantly, which Navdeep we sales a upon will years ahead. greater outlook his and XXXX

XXXX focus in our strategies accelerate business long-term existing continue profitable on Our is and our to to enhancing enable core growth.

digital both experience, stores the forward of serving continue our in-store omnichannel fulfilment. our industry-leading hub to distribution First, providing for over XXX of be will athletes and our points

enhance XXXX, store, our up in-store XX% ship During online in pickup decks, increase comped sales XX% In QX. model sales our to XXXX, to through client provide try total elements and premium fulfilled or products approximately curbside. HitTrax golf from our software full-service of cages, They shops and as enabled stores our experiential over we batting our either opportunities will and of simulators. footwear continue such our through service

pickup continue e-commerce and to and invest technology drive will store profitability enhance in to fulfilment our our We business. also of in-store capabilities

our Backed experience the to will continue service, making by we serve to more however they them. our also inspiring athletes instilling ScoreCard their and product whenever, confidence purchase in for in our science easier investments by adding wherever and Beyond want, find our even and and personalization continue improve athletes stores, best for our it to will program, we their data loyalty. digital

Next within merchandising.

sports with and relationships important golf. brands key ever, team on we athletic growth drive will build Our are and and stronger our footwear, apparel, categories, including than in momentum

In our groundbreaking response athlete Nike and forward store and evolving the and an footprint by connected needs We create is ability strategic our athletes. new continually our to across in highly encouraged our announced by entire the unmatched with and working Nike XXXX, national to valued sport, been are portfolio we the We've to brand an we rooted for online athletes a partnership partners. to experience anticipate serve. fulfil of with showcase look

we ahead, will of new experience athlete we growth unparalleled time, brand our across physical drive with At to big brand the big our digital to will and segments bets and athlete continue Looking feedback same vertical categories. in all make deliver to an partners leverage and properties. insights

discussed on of source vertical previous significant we've and a become strength As our calls, growth. have brands

and represented vertical golf, brands outdoor our brands XXXX, together, fitness largest sales, and sports, $X.X our in billion in During eclipsed team equipment.

In of record investments, House our results pleased on deliberate Sports, key our business. meeting the team. result reiterate to of refine concepts very grow Galaxy of and experiences, learning’s Lands. into was Performance early our tremendous from Finally, DICK'S Golf analysing, and Public to execution the while core our we in We're our remain and closing, of new our needs by concepts that Center evolving including our and these XXXX the to understanding continue excited athletes I the want pulling performance emphasis and

believe are Navdeep now potential and in long-term no business more lead the We the and I'll detail. in one marketplace. confident the better call about to to results to review over outlook of that positioned very turn ongoing our financial growth our is

everyone. Lauren, and you, good Thank morning,

XX.X% brief billion. of XXXX our year Let's Consolidated increased full review begin to results. $XX.XX with a sales

sales a As XX.X%. increase X.X% top XXXX. last X.X% in Ed noted, of a increase record-setting increased This on year was a consolidated and same-store

last As year. XX.XX% from by full year occupancy was fixed points of year. basis a percentage points. was for XXX basis online current Gross and in merchandise points basis costs of improved to This and driven our billion XXX expansion in profit margin sales, XXX leverage improvement sales of the XX% XXXX of net $X.XX net on rate or

were sales shipping partially $X.XX items resulting and offset from billion expenses This brick-and-mortar sales to brick-and-mortar to year sales by included global compensation lower our $XXX the year, last temporary year, safety sales. operating XXX primarily higher basis to inventory costs. saw as sales store of last availability. points and the in of following the cost store of also closures. due XX.XX% prioritization These leveraged a sales supply sustained million, support costs, million as SG&A In dollars reduction growth primarily and increases our in to increased net We from temporary or were chain closures. freight SG&A year's strength percentage current of expense significant was following as expense higher prior our and penetration, $XXX due well last year's increase. COVID-related disruptions SG&A due

or $X.XX wages, and sales However, from non-GAAP a net XXX% year-over-year our last to per last compensation compares $X.XX non-GAAP higher earnings increase same earnings costs. the margin $X.XX in including XXX% COVID-related This share $X.XX by year's per total, share or of strong a earnings was period current last hourly per and year, increasing expansion, and a reinvesting non-GAAP teammates increased annual non-GAAP and year. our and rate we longer-term our merit sales EBT of XXX diluted In $XX.XX. increase. merchandise accelerating year, XX.XX% program hourly was of a transitioned points to in the Driven basis XXXX, billion billion focus, diluted diluted with partially share

results. to Now moving our QX

pleased are to of X.X% to billion. $X.XX consolidated report We a sales increase

period same a Consolidated sales increased same-store the history. of XX.X% X.X% year in X.X% on a was largest sales top this said, in XXXX. quarter our last Lauren increase QX of increase in and the As

increase driven by apparel growth comps and were When strong X.X% in our increased three consolidated hardlines, a and apparel of transactions. XX.X%, team primary in XXXX, well in ticket as a sales Our driven X.X% to footwear. categories footwear across by growth sports, balanced compared increase as average and

compared stores XX% XX% to delivered brick-and-mortar approximately with the footage. up same versus XXXX and roughly increase comped when a Our square sales XXXX

manage to our the quarter. our has XXXX Compared versus minimize reflects E-commerce of quarter. promotion which better site-wide last of on from e-commerce business XX% XX%, our current decision expected, percentage a to XX% XX% sales was penetration to to XX% sales, inventory As last decreased increase XX% in top of XXXX, grown e-commerce and as in year, deliberate XXXX. our in was a throughout sales online This increased year. QX net

Now XXX XXX promotions, basis profit fourth the moving year. Gross basis gross $X.XX points to improved to pure assortment sales profit. billion disciplined quarter was and differentiated strategies. increasingly rate last our XX.XX% points, This merchandise improvement of driven of in by the or to due expansion promotional was result net of and primarily margin compared

In addition, a supply be reduced in to environment. which the in categories certain marketplace continue promotional resulted constrained,

saw also sales mix. favorable a We

rate XXX as This chain availability. mix improved from million, pandemic, points percentage as As higher partially costs and favourable Compared expected, as XXX In occupancy cost quarter, points. sports to well due last included basis expansion prior $XX DICK'S of freight were improvement we prioritization comeback safety start costs $XXX.X to net in XXXX, by offset primarily make non-GAAP compared which margin year, gross fixed net improvements sales. a to of primarily were profit global XX promotions of and resulting merchandise sales the donation supply $XX COVID-related leverage to of QX. the increase $XX offset basis program and to sales in expenses in SG&A well support was dollars costs, struggling by on million points to SG&A SG&A freight year these sales leveraged was the growth of million current million due costs. higher and most inventory sales. XX.XX% in driven or increases help compensation partially of jump to due as on basis by year a disruptions our product youth to Foundation to made as basis, increased

delivered COVID-related teammates sales year, points, increase XXXX, and the our store non-GAAP to support last in basis, we partially increased basis a as to on in As previously, percentage I costs. transitioned the focus, net compensation reinvesting increase a be as points mentioned XXX% in with in year's non-GAAP we due XX% expenses of earnings a percentage on year-over-year In per earnings year, of share diluted diluted basis XXX or GAAP a last diluted a million basis net sales. share noncash related shares issued a designed earnings interest increase by to per This per calculation, current longer-term programs operating hourly of to the primarily a expense payroll to SG&A offset Compared points non-GAAP diluted investments or same Driven basis, of XXXX, increase. XXXX, higher additional diluted or share EBT $XXX increased advertising but margin million $X.XX well convertible non-GAAP are concepts. notes million wage On our net sales support as non-GAAP to as share and and well $X.XX. $X.XX hourly a strong last sales of expansion, million our bond in hedge to rate total, of was non-GAAP the to rate year. a GAAP $XXX.X XX.X merchandise XX.XX% and compares QX settlement to as by our are period $X.X share diluted in sales per This earnings new million both expense our required and we the in approximately were Compared that XXXX. $X.XX. EBT included $XXX.X as XXX from our

can press additional morning. refer we on the details to table this of you reconciliation For that issued release this, our non-GAAP

senior long-term raising complete through Now cash our investment-grade unsecured of balance the our billion In $X.X issuance debt sheet. notes. January, to very looking to were pleased transaction, we our inaugural of

flexibility We of have as equivalents billion $XXX facility. investing business QX cash to our we billion new continue of our further $X.XX approximately position, providing the on notes. result, repay our senior borrowings cash financial $X.X us well million in convertible as a unsecured no and the strengthened As with and ended credit

of year. quarter last Our to QX compared levels ended increased XX.X% inventory

demand inventory to aggressively over cost. continue Looking meet ahead, product and we to chase availability prioritize

impact we expenses elevated part this, within of have XXXX continue and our freight outlook. As of included to expect this the

expenditures allocation. $XX.X million capital capital million quarterly to we and paid were fourth $XX.X dividends. Turning quarter in Net our

X.X of our an average we repurchased million quarter, of at for approximately $XXX.XX. the During $XXX stock price shares also million

We program. share remaining billion $X $X.XX have new repurchase approximately our billion under

$X.X to we For have through repurchases the share dividends. year, and returned billion shareholders approximately the

foundation move let to record earnings. our Now ahead. upon the we build years consecutive sales in X provide me XXXX in outlook will and XXXX our fiscal and expectations new XXXX a for Coming up years XXXX, which

As Ed strategies on working us said, trajectory. our new and a they are set have

to growth in per strategies. $X.X earnings the decline some anticipate promotional deleverage with on and debt. the fund $XX.XX $XX.XX. long-term normalization points be assumes modest is In EBT sales and expected billion on primarily XXX XXXX This be our the in at in allocation X.X% the SG&A of the million throughout negative At approximately This detail. billion freight range is improve of of the us sequentially XXXX XXXX landscape, this, XX.X% same-store basis to to fixed expenses gross midpoint. margin range new to deleverage Within comps increase comp top are includes and to interest a quarterly is capital This sales and in earnings basis. range X% be increase details pretax in expected of as-reported review Let expense expected Consolidated with and share on non-GAAP we expenses. of sales now approximately total, technology expected in flat, $XX advertising, billion. XX.X%. midpoint, higher is to to of diluted $X.X expense the approximately is expected to year. expected a EBT talent associated to of margin $X.XX our and to be

effective tax XX is diluted an on guidance XX%. outstanding of shares based approximately rate average million and earnings Our

well of store million, new net expenditures plan allocation capital stores, concentrated existing in in investments be capital million to growth. includes $XXX which Our as ongoing in will improvements $XXX technology our as

to of share we our quarterly dividends $X.XX annualized returning today XX% to of basis. increase an on capital terms shareholders, per or in $X.XXXX In announced the

of $XXX In addition, our guidance. which of repurchases, plan EPS our million share in effect includes minimum a the included of is

beyond strong However, repurchase opportunistically cash flow our the to will expected million. using shares $XXX consider we free

growth change I'd from to QX Beginning and an like in be upcoming penetration take moving will e-commerce metrics. XXXX, disclosures. our highlight away moment concluding, to Before sales a in we providing

across the and difference shopping athletes consumer and increasingly are shop. is sale margins believe athletes similar our attribute a sense with same transaction, omnichannel even Our approach, online channels makes EBT represents try view channel. being and however a and relevant to they single to no versus transaction a whenever, longer the less of it multiple an modeling on regardless best to want the centers from We our specific in-person around business of wherever the of serving perspective. our And which

you related we as to delayed announced make As of but COVID-XX previously a know, intent temporary XXXX in closures. this store result our shift and

same-store We XXXX our introduction. are with updated extremely method, in Nate sales closing, with In his as we an results. pleased will consolidated to results continue described provide

Operator, open are this prepared We in comments. This Goods. concludes for your in now questions. you looking term. DICK'S forward for over Sporting to line our you and may continuing interest now longer the XXXX success Thank the

Our Instructions] Gutman question Stanley. [Operator from of comes Morgan first Simeon

ahead. Your line Please is open. go

for new is the My company. base first on question margin the

a foundation. You've it being about talked

what more than should new is normal assumptions, the 'XX, sounds if gross for away, and some? in are expecting Are in markdowns. why the I to this it's the in supply feel go the it margin? What of margin? eventually we you One puts or of and that's confident normalization guess some takes chain gross like promotions

that Thank our time do really Simeon. believe really but the you of we environment. for promotional margin such are what's not vast products standpoint, to have in of expect over that complete improvements do I'll a take some we We and are sustainable. merch highly subject change is majority driving margin a promotions, question. that [Indiscernible] merchandising our From now differentiated that the that, normalization assortment

managing be the looking right what promotions gains able every so significant we continued And mean, day pricing customers than will what be business, our we do, and were and some? our I and to more at prices versus pre-pandemic. drive we our where our expect margin we if for it's as to to

Is there feel at be confident Is the And something just direct you this the that level? basically there then normal? follow-up. using higher why maybe how reason this you're markup? something we've where is the around that circular should permanently reached initial can bottom-up a new Like around what confident we you're

Yes, Simeon.

it's key a think few things. I

understanding now. promotion and like, to it same subject or we our also promotional subject environment total are being products First because many used product digital a a to level what weeks market what print-based evolved the messaging. granular offers personalized more more not promotional that because terms from assortment we the much to environment. pricing high-heat a of fully on differentiated be marketing of from is stepped now mix be business not we some a products, all, more at would also I and as much make where site-wide mentioned, and flexible and a the But of desirable a in to is be they're plan away to on have the have with have our time, decisions customer of can direct And before was store-wide going we

there we up our in set are absolutely higher going things retain gross us margin to that feel So permanently to level. are structural this

from comes question of Barclays. Adrienne next Yih The

Please ahead. go open. is line Your

quick year partnership the then of the COGS two, the a of of the different? of, other distributor then give additional in Nike finish It's there Navdeep, however what "marketplace more heard key in chain commendable detail a XXXX? of, kind as supply in percent ones. What two number prices? the you look Lauren, does any on another I Any we've And their your target is Or of was future"? want you your advertising one, Will you, do partnership. market it you. terms is demand of the team. to stores creation on for And details Congrats us can light on any forecasting? oil especially anticipate What And on guess, partners. question the the or from total my on for budget? rollout, higher Nike demand to terms for number the in to outlook first impact on impact XXXX that as

Adrienne. Thanks,

off the So the relationship that partnership, it's over is past several years customer and an starting Nike and we with and most are recently a for We the that with together our both in and at is. our say connected of to Nike incredibly to reinventing membership become started unlocks would I tremendous program, experiences where strategic them, what experience DICK'S amount that consumers can access opt in high, with membership, Nike products content. all-time and

I that, really And will have that's of and all I reinvent in to co-marketing so we believe spend experience. partners. the of continue do Nike, our true innovate with as say would consumer we strategic

We have many strategic partners.

what mix. of with If look TaylorMade. strategic tremendous partnerships specific Armour they Callaway they Nike this co-creation year, XX% Under percentage your answer at question with past our model and of our To sales Navdeep? and and and for Adidas you were about were

your Adrienne, for question. thanks

answer we I they budget, think together. are geopolitical I'll right maybe now. situations both what were the our When not created questions

continue watch situations how to evolve. we'll So these

about the We oil with In strongly the and that the feel come terms start I'll of prices. I'll demand, demand. then to

use have changes, as lasting. out, athletes greater on macro allocations the elevated. what changes participation our of lifestyle brand I seeing that outdoor have, remain that have well we a We as in on internally in of to on when the the terms you us can that we the optimistic were time and our of that still budget to that we this created. closely budgets built and that activities of demand in prices at as even both the expectation, kind monitor we have situation very we the we are the we Lauren partnerships made But The -- the have in capture those lot in we very in budget, health When in confidence as the based casualization of at on all we'll QX expectations. right, -- the And that of to created of as the are financial and we year part be sustained trend what through place we given well was all fitness, the the our has gives terms year, – looked a and the when getting prices seen demand, this the the terms beginning called market focus the of guidance look evolves at workplace, capabilities imagine, continued that are able as XXXX. are the as level the the

next comes Paul Citi. from The Lejuez of question

open. ahead. go Your line is Please

XXXX categories XXXX? by April we as you in around you -- provide curious in about first guys levels? most 'XX. mentioned in just the Can I period about are in just you then know. terms Anything what specifically, anniversary talk of about about a performance the you're can versus And more you sit category And how are category you bit thinking performance second half little in Which how quarter. March, color planning? thinking versus your half? growth comp 'XX each how And second, think you above sequential improvement

take first, and I'll You the take Navdeep, second. the

I'll Navdeep. sequentially the improve. comps is take question. This first guidance, our called expecting the I out are we Like in to

is out, The factors May frame. which of was stimulus I impact. I the time think called March would the the you more through in say, impact, one much the stimulus

We in that to at as position, XXXX. to as guidance improve. the finished as been the in expectation included that as, we strongly has of of And end well lap so will inventory kind QX we QX, look we continue our of as believe that

as peak inventory our build to continuing are we selling However, season go the here. we into

that improve as our from what expect we as we have position inventory the the stimulus move of money comps the the that last sequentially is So we year. as year lapping to well through out called we believe

category of in our number meaningfully hunt, business We golf. I versus our XXXX is out over XXXX, result rebaselined what in increased category strength year regarding single that played. our exception in in long-term significantly incredible And this our performance strategy. core golf point with footwear sales athletic in it's past which saw, of to every important has single we a apparel, of teams say I'll every But over XXXX really and sports the XXXX, note I athletic category have so -- a had rounds a is -- higher. record would even think

bikes, confidence higher then on, in are while have categories. they we of they XXXX. in of fitness were some going than in significantly surging categories" lot "pandemic So like a those some and And the there's rightsizing

comes question Warren Cheng from next of Evercore. The

Your is line Please ahead. go open.

I to just Simeon's I you your a side, that normalization to It there's other be going to some to normalize hearing on elevated gross the ask just direction. margin in make this sounds to But potentially question, like expense flip wanted freight then structure going and want year. correctly. promotions and sure I'm the that's follow-up expect

hearing the margin on that a a this new going of -- basis, So gross I proxy you've for am sustainable correctly guidance rough is net XXX, forward? the structure down that's given kind

question. Warren, Navdeep. this this is I'll take

remain terms elevated expect of is freight that we expenses, to freight the what in the out XXXX. expenses we in So have called

midpoint environment that expenses deleverage the on primarily of and have the are of expecting as gross out is comp in the well of to So with margin related a we we of reduction see the some that there's the given. expenses. least At decline we we as in out the normalization the The not called now, much have playing fixed that that promotions can't freight guidance marketplace. in

this think Warren, also opening a from the want do in our rates. across base board, is sales and mentioned Navdeep future, in But can margin we I our his we new which grow remarks, mention do that to the

before how had are highlighted to brand partnership there more smaller question, your some of is or my then second you're And about conversations little conversations maybe of the just from haven't material three, having outside brands I sense want those two you follow you in are ask that or now up past? getting that you going can kind give look just of us

Our an at brand high. relationships are all-time

across in apparel, athletic we team partner categories, We athletic strategic with are having sports. that's footwear, key incredibly key every discussions and brand have

on and We better always some brands, an are expectation with this with at would partners we narrowing relationships -- our distribution, as have and working with high. the elevated board, also But across consumer -- reason that We're we over I are to to part and the we continue bets reinvent of players. are have, working brand allocation are say and is getting new emerging for they take all-time our them experience. the emerging

Sachs. Kate comes next Goldman question McShane The from of

Your line is Please open. go ahead.

your over much you And you and is us the about bit a mentioned you've do for of wondered how there. of you what XXXX. you've your have play in Sporting DICK'S outlook label inflation kind your has ago. centered did market also to second in the changing gains. build assumptions and question then market been a Our Goods the ticket years different the guide assortment comp little to question success seen into the with assortment our talk any much if than share How could you five comp around brand big assumptions We comes 'XX, think versus private share

first Navdeep. This the one. take is I'll

of terms for build the FY 'XX. In

So maybe what saw I'll in begin a with bit we little QX.

our the a in increase in and our our you'll in we promotional actually, by ticket our the if was But is further, saw transactions growth was the little to be So stores. cricket. you e-comm in store, comp QX bit driven peel see driven that not decision there what by of majority strong actually a that and vast that was

in kind look will So of well but I of what needs is as perspective. this will we tickets constantly granularity, to from as haven't balancing XXXX, say we the the of level right as expect that the we continue athlete our is that we what we marketplace terms And stronger to the right 'XX. the decision look of evaluate of would given strategy to be continue a to as

e-comm. transactions good we mode of and will also different remain as However, seen business well as strong traction a of experience have as the

vertical assortment vertical very billion. brands growth use brands across of we our remain standpoint, in getting very opportunities over an strong. that those continue to new missing attracts in female to was out We're an our portfolio before. brands. $X.X like athletic then brands CALIA, female; very, and brand, From apparel Yes. our brings opening point; men's our fill in And We're space which all white portfolio, and VRST, fill the DSG, our price strong which

comes next D.A. from The of question Baker Davidson. Michael

line Your ahead. go is Please open.

you to next could I term, wanted bit. CapEx? up cetera, for you which talk is you means what aggressive that more of But guidance growth ask for and sort little gave to if store I year, took know growth, initiatives for a going about new that. it debt et growth, count the some longer -- forward. you Does higher signal

Thanks, Yes. Michael.

debt which an invest we gives in new pleased. very raised and debt, investment-grade raised, we're billion business We our incredible opportunity $X.X amount the to growth. of So just just us

course, to also invest and appropriate make we maintain heavily going would in going an store new what weather that well foremost, ways. to to consider various shareholders So and sure cash business, excess cash we we estate can We're as and lastly, balance in storm. as to always return experience then in-store first are our we technology. any expansion, be that of And real will look flow

one XX and will support Performance of activities And Sport one real So growth the mentioned stores, seven four count technology. Galaxy stores Center. remodel CapEx estate XX counts, in and this and DICK'S all are stores, of our coming and CapEx, I store DICK'S and new XX store and actually including in-store new Golf period, our before, our we specialty expecting year, terms House

pace you business One more, the I if throughout talk about to of want I fourth could. don't quarter. know if the

January was versus what that how you You came the better can But better implies in in so expectation. particular January that pre-announcement January, talk in I was planned January? December? and better was November about And than on suppose than

just then in the And as did in the we very, with weather quarter. indicate drive improved early were throughout earlier January. strong an we months higher pleased note, even We January really as had Yes. that outerwear our cold the business inventory happened of of significant forecast lot results those is What a drove promotional impact very you performance, January. level in was our management that to our weeks given of versus expectations, we our what also a had

versus we and performed very were also with So were it very, our forecast ago, pleased versus very two we January Overall, years well. pleased.

from Grom comes Chuck Haskett. Gordon The of next question

ahead. Pleae Your open. line is go

long $XX you you a the forecasted 'XX great really roughly and EBT is on how the year. per generating question and term Congrats that for as XX.X% million 'XX? the off today algo store you're build My margin on you're beyond that thinking about the

that question. This is Navdeep. take I'll

like and the very for First things to well. five have that delivered excited transformation we the out, over Ed are look on years, the couple that future but actually, as we of gives have the about years, foundational the confidence we and have that, improvements are confidence to success the out, last called our the what changes the the And the us of been last last future all, called us the the gives results so over what we made to as Lauren we we years. as that's few look as are journey

or our are up an if EBT margin, improved look pre-pandemic, sales we at of you In billion. our terms $X have sales, just

where guidance, will midpoint up $X Our they from billion of with earnings, over be were. the even

continue and feel and 'XX to are create sales on continue the to So profitability results, can we we grow and long-term a foundation really this about a we excited our new like as basis.

learnings you you business. and Public core introduce into talked think Sport And you then of key that plan Lands, to House the about when about

recent if the of the wondering past fleet. over some examples the of some quarters you what and couple you then store existing can of are Just applying maybe learnings provide to

DICK'S experiential we fully all look the stores community DICK'S at to with pulling tremendous model, involvement, want we to are want how fitting a Yes. experiences all House serve different is room of of that we different we Sport into. and and things those the a -- destination service when build experience athletes back into

the You'll DICK'S really general want in Lands, many about an premium increased -- business see serve how importantly, really We've of our think stores, consumer increased got grow we've have of focus in back feel underserved us service I outdoor about excited that HitTrax With athletes. to DICK'S very getting become things got so and But emblematic Goods. to we soccer -- of the we're learnings already most stores. decks. Public model continuing footwear We've that and our we're excited developing, is just about on experiential has nature in Sporting we're category the a we shops, to partnerships that can which we the come there. brand the outdoor

The of Chris next from question JPMorgan. comes Horvers

Your go line is Please ahead. open.

have maybe you is, impact how So thought a we follow-up. how then in impacted question number to much thoughts constraints a inventory have perhaps I And comps my put tried could that first 'XX. of that on quarter on quarter total? the And first fourth

is that we And will really that that's the through chain that when any coming what inventory think there for some haven't that delivered that will exact X.X% constraints. we the and we I substitutions offer wanted number much portfolio. can the don't we've QX well. despite supply people years, with challenges, comp do constraints, And can constraints in year. has expect inventory the But just proven we I So we been challenges, put a next say impacted we on how inventory two through QX. have have a manage products some broad We choppiness to last

allocation mentioned point, flow in capital cash you're higher on current this XX% another But on market the maintaining XX% year. gross that's level free you'll this a on balance question, and of more your sheet. generate cash cash than probably then you sitting of And the cap at

able million convert collapse if structure guess, $XXX how to guide opportunistically might conservative that EPS? structure? share be take to extent And convert repurchase looking you accretive the that I were maybe versus down, is the what So to to

in you dispute out. prepared But Yes, my we million anything minimum don't think out is $XXX Chris, out. called called the will remarks, that great I I that we called like question. a

-- but evaluate look and opportunistic out, this to callable as as definitely maturity will to year do a buyback a the us, we still look away. into share an is you incremental we are as convert, So year, we options all well whether still these further quite notes have next that ways we'll called know and to as available

the the time, not level because appropriate So cash available to at to of continue same us, uncertainties world to sheet us. all an maintain the are evaluate balance we'll continue the behind on in opportunities and

question next The Reed of comes Truist from Beth Securities.

Your is go open. Please ahead. line

perhaps indicate comment understood a margins, thinking promos seen versus us that all for correctly? even ratchet sounds that like about that it frame half? And second I how environment to you are up Could that first much to the gross have in freight then anything ease far, maybe half, bit? in to Given don't others the expect back thus you're the half if you you starting

increase and I said more pricing. we of before see pre-pandemic in nothing But little what right all Beth, promotional second a in we that the a not are we any now the now. seeing the to more planned can any at activity bit be year, half, about levels seeing not anticipating in looked differentiated sort -- of nor we're fact an much are we When promotional of the do have the reasons assortment for like we meaningful surgical environment. than proportion we've we what used for our with the

products. your freight, the would the will volatile. expenses I inventory some We availability cost of And question freight did continue to on over air prioritize on fourth including remain in say Beth, that quarter, freighting

as the to just those see continue don't away year this repeat And to have maybe that's have fourth evaluate. and go may have we'll and that processes. further we still of favorability situation. we quarter So we'll some to continue evaluate to into But much to

comes of Basham Seth Wedbush. The next question from

Your ahead. go line is Please open.

vendors that's to heat products. you with from the gross on can much implied nearly us XX%, up new And XXXX and on in which to XXXX grow, high it's When then how since to help margin XXX basis by blocks foundation about better focus the understand driven bridge good you your XXXX. And at been for relationships for guidance if look at key particular, XXXX? building has allocations points

This is take that Navdeep. I'll question.

is several improvement a break improvement at reason promotion improvements the gives driven we don't in the what we most but if more with have of because improvement at fact And over we differentiated majority that about, price this the we us two And seen other huge much strategy. structural. things it, confidence our is, the a we is that as sophisticated if assortment, things through hunt down that we this that as optimization the are And work have us delivered pleased which penetration, called the give merchandise those out, have has as years. have lot of well results the the margin confidence it XXXX. substantially driven, gone was structural that in that analytics. And this Lauren from data call-out that, where vast won't clearance out, is you majority as pretty look all, of look we because of talk last and in First well the of of but you vast are is margin. big as very that increase the the And

are as expect able promotion to is fixed we our giveback happen So be some as have these call going that's FY continue the to well benefits expenses. this 'XX the believe and the we'll forward. out that of What we in some to these on leverage we did guidance because -- structural the of reason

going driver And gross forward? that to it a margin see as specifically, relates been how product big care structural allocation, say heat to that's of would high quantify or you the you improved

I has very high five across just products other but coveted and and also back We're our not and stores. to product access. portfolio It's pleased categories is our the to going but years, to that our changed and been will said heat what over elevated, of highly with apparel we desirable and last footwear that's quantify all product, entire our go allocation be continue we which it, of

gross to margin. very continuing that we're forward much drive looking So to help us

The next question comes from Michael UBS. Lasser of

ahead. line Please go open. Your is

beyond. year going to to about The next in year. debate stock on to XXXX is more what's going what's and DICK'S Goods Sporting really this happen about happen not It's the really

and shifted sales that at that wardrobe have consumers more this demand you're home pandemic XXXX to during extends be again well maybe to the and apparel, if see really some to of why starting that and been categories the So even in as given their down done the giveback experienced order wouldn't have footwear normalcy? casualwear, in return

future that strategic to assortments, categories mean, available footwear, categories. athletic the team we has and as of in categories now market of of billion gains But we to apparel, a Michael, partnership our us only we due definitely our marketplace some Lauren. -- I QX, to key it's yes, $XXX had to before. that continue We fitness, see due the reset share those and by significant all expect leader golf, to are the fact the athletic evidenced sports I to We some clear grow in the grow. to mentioned like of core due opportunity pandemic

-- we're we and new line the on this believe the a bottom We continue grow, for us. the excited we're and top is So line for going base to to future.

And to then go Have site-wide or return my back mentioned follow-up that some of year. expect to the in question store-wide this is, half assumed promotions of you'll you you expectation? you second as promotions that part

can't will go more that toward that's pricing. back moving immediate activity we're not -- future, to and but not the on radar screen we that. is see now optimized I my promotional personalized right That and

The comes next question Cowen. John Kernan of from

Your line ahead. is open. Please go

in-transit there. product on year. levels of inventory balance on of a the dynamics stuck flows vendors the inventory half of how of changing lot inventory the now just your right curious the on get into back and A recorded lot that's we curious sheet. view with the you as I'm Just in-transit envision of out are --

is -- is vertical even a the of on part little early product transit, shutdowns would the happened Yes, QX the in this this Navdeep. and that we QX. I that had we say, overseas a is of John, in and think was side, manifestation of this bit brand

and continue in we to of to the feel as feel called And so positions But we inventory the current about as go we'll well the are it that our comments, have inventories we the marketplace we we we'll And prepared And just but have improve XXXX. have continue to situation that appropriate, that watch. year. we inventory and optimistic guidance as continue the as out levels the out. the given will level evaluate very through as plays are building to throughout to

through into just and SG&A a cycle? are we on as of big-box next. and Some wages Where go wage peers systemically. year increasing your Maybe rates been you follow-up this on dollars wages pretty the have in

where you when in stores labor model. in and the think costs of curious Just are we DCs, and labor inflation terms about

Yes.

wage of it defining I that First of what center to market call we our the stores have more level at in as to would attract the all, we don't the We is right look the by wage in appropriate minimums to criteria. distribution both look pay, talent. as the much

much definitely that level the right our so right of is And that than other experience elevated more a it's provide are talent athlete, the finding that retailers of which of can to lot marketplace. in

a fourth terms in and engagement We in that's And in is where I'll were QX become the choice. an phenomenal. exist third as and core of that challenges is to very results that. in deliver continuing us in to thing of other strong employer to quarter well of maintain even the been of other that out the XXXX. strengths saw one The have look And We morale, continuing in camaraderie our we call stores fortunate. we staffing forward lot stores. were having as their The this retailers

comes from Poser Sam question final The Williams Trading. of

go Your ahead. open. line is Please

question year, The your accounts to just given quick. gain? XX% growth e-commerce the two, about you Number dropping that and driven range? from much And and three. on a forward, up I pre-COVID is that it will of last year we able looking over will year. e-commerce inventory? do going the future ask when is what you share based much business view I your lot that next helping up XXXX What rebasing of real up versus missing the you you think? on can this be optimum levels. from right I'm X% sort from have is how And How like Nike at anticipate last that time your think you do be numerous the question? in $X.X be ask your e-commerce how are that to a the inventory now business last this a as of business, going is billion last Are of

take I'll in right, hope. your questions All I order,

I quickly are something than they very, so continue we And more some and on that we very e-commerce, distribution and retail the turning raised share are is certainly key Nike partner think even we point as starting to towards challenges and to the chain our together, in From due continue a can inventory inventory we we a we challenges. be strategy that inventory reinvent fact go and focus just supply e-commerce hope really do will differentiated good to With grow. expect So to year absolutely we with they forward, build this that inventory gains. stock consumer now. more as their that certainly level, are as helped you narrowing experience we an strategic us

remarks, store in to in that prepared think that. now many bit right segmentation are multiple in a do continue we're in very purchase. any that billion. people pleased omnichannel our the So experience driving e-comm is given so arbitrary that But we channels the as you little able with business. We who touching there But mentioned versus $X.X are should our base be said we grow before of to

just So one let last me follow-up.

be in that inventory you the -- -- Is inventory, moment way yes, the billion On Is about it? that around, be to the optimum would right your now? it's at be $X.X range? level what the optimum the like assuming $X.X If with product, would right that said billion? that how would think like what --

we'll Sam, it. put Yes, yes. an exact to Yes, if number say is don't Navdeep. would I this I know

about will as we growth and big to into We out feel the inventory with today, call athletic would the overall apparel. there we'll future. in say would go areas the opportunities I as we'll we The definite continue of sales build year. our in-stocks feel inventory definitely since building inventory strong and go not this to we our And the build is footwear, kept XXXX, that that the we position be but through has look pace

use than buyers understand you efficiently given building to more well your like yourself, yourself aggressively last are you better, when rebase this getting one successes, you or going one, you’re ahead do happen you stomach [Indiscernible] and would how how even above or learnings prevent make two you’ve to bigger last to and going And design sure for is what not were I which start design demand had the has getting over to do your pre-COVID, eyes you but buy years? something get buying that do the by certainly don't by from the forward how been you of

I years at managed well really and we've would I how this our is trends. most buy history it and the one of don't absolute just at last core far than to better certainly Yes. and what multiple marketplace. And say When demand really, look look is, of underlying competencies. look so we think we year. at We in

aggressive. -- us So of very too there's we little risk getting

We we to and where are and managing to pull our appropriate constantly buy need our investments where chasing back. open monitoring and

concludes hand Lauren I'll This so and remarks. for Q&A it portion back of Hobart, the closing call, to this President CEO, any

to it interest Goods. in will teammates the as DICK'S for are to want Sporting you Thank continue our they've is, as all everything done past drive results several for you, have that for thanks reiterate transformational a DICK'S, which we and long-term years, being I know to and for our business reasons all your thank on there thank want at participation. our that your we for journey and into strong the five future. just I been

call. for today's concludes joining. Thank you This

disconnect lines. now your may You