DICK'S Sporting Goods (DKS) 7 Mar 232022 Q4 Earnings call transcript

Hello, everyone, and welcome to the DICK'S Sporting Goods Q4 2022 Earnings Conference Call. My name is Emily, and I'll be coordinating your call today. [Operator Instructions]

I will now turn the call over to our host, Nate Gilch, Senior Director of Investor Relations. Please go ahead.

thank and joining full and our to everyone, quarter fourth year morning, you us for discuss Good XXXX results. will and Chief call Chief today's be our Hobart, On President Executive Officer; Officer. Navdeep Financial our Gupta, Lauren and

The our Relations playback approximately months. website in for Investor investors.DICKS.com of will at archived call XX today's be located

such in cautionary actual to factor call. and uncertainties Any that annual a this will making should cautionary with be these risks As statements differ forward-looking statements, including from with cause various statements conjunction and release in during last our and discussions results considered the our risk reminder, we report which our filings XX-K to materially made earnings are on Form in subject be our statements SEC could statements.

to or measures results scheduling We Relations Investor to first our finally, planning your today's earnings to these quarter any XX, update publish refer our for Please assume to non-GAAP of no in of XXXX. information. tentatively reconciliation our we on forward-looking are obligation And XXXX financial find a website call. May referenced purposes, statements future

that, to Lauren. call I the over will With now turn

Thank good and morning, everyone. you, Nate,

pleased success of business with results, We are execution. through strong of long-term the as continued focused XXXX very transformation demonstrate and we which our realize our benefits our strength the strategies and

their Goods meet lifestyles continued prioritize to to rely they've DICK'S healthy and athletes are passionate Sporting active about Our sport and on needs.

pace considerable and important most we continued market largest our Importantly, growth categories. in an gain at with to share accelerating

we achieved $X.X sales strong ending increased to Our strong billion, X.X%. fourth This comps of another a quarterly quarter QX, year. record and our was

non-GAAP XXXX our XXXX. comp a on was quarter, of in comp a of we EPS this fourth comp And history. in of This $X.XX, delivered ahead X.X% QX any XX.X% a significantly strong X.X% pre-COVID last and year, for comp top in

For year, $XX.X billion. of full the sales we achieved

put XX% $X.X To we when look delivered this versus increased XX.X%, at you $XX.XX. non-GAAP performance non-GAAP our EPS or of margin and billion. was sales XXXX in EBT Our context, our XXXX,

XXX merchandise increased than more Our margin basis points.

than margin X more EBT times XXXX. non-GAAP non-GAAP EPS Our more and doubled higher than is than our

performance doubling $X strong business per long-term of our today, and growth payout share $X than more The capital in investment to fuel rate announced position of a conviction reflects clearly also and us strong Our financial step our change focus to to ongoing business higher return the we opportunities profile in delivering dividend our increase and structurally significant our strength to shareholders. that quarterly shareholder value. a and on our or earnings on sales annualized basis, and our increase

this XXth marking XXXX anniversary, DICK'S time for is our With Sporting incredibly exciting company's Goods. an

in cookie Ed's founded $XXX it's partnering and small retailer continue sporting by a from drive Under over alongside business in goods the XXXX for a shop bait-and-tackle dream was grown company his jar. Dick I’ve with to we Our a honor of decade and grandmother's Ed had become the will from working Stack to the leadership, preeminent forward. country. the

this time the an to believe forward. we our to take will just celebrate important as milestone we While use heritage, to look it's opportunity as

we the our Our next chapter write momentum story. growth we is great bright, have extremely future as and in

foundation ahead. strong results XXXX in years Our XXXX build a we and the provide in upon which will

through to margin. positive growth square will comps, and we merchandise a our footage higher return sales grow XXXX, In both, earnings and

store positive of comparable in sales our to the X%. expect We be range to flat

of $XX.XX, midpoint range expect to be in earnings per the versus XXXX. to at $XX.XX is We which XX% share our up the diluted

teammates like largest to our a to $XXX we another sporting share for industry. U.S. our lead and billion strong are in work for dedication hard And We fragmented our will continue and positioned retailer, business. well of gaining and year to their to delivering future. create our I'd the define extend continue thank and passion, goods all as

make our us none -- is our have what been team. people what excuse of it of DICK'S, have great. me, At possible accomplished we And would we without accomplished who -- exceptional would none have

to turn financial the over now results, detail. in capital I'll call allocation to and review Navdeep our more outlook

Lauren, you, good Thank and morning, everyone.

the brief our our sales sales pre-COVID a levels. a higher with decreased and begin to sales structurally XXXX, Let's When billion, compared Consolidated full $XX.XX review comparable X.X% increased results. or year XXXX $X.XX increased X.X%. store billion record-setting compared to sustainability of demonstrating of to sales XX.X% the

in you in see These driven look our if deck, of will categories our XX% of of our athletic share. our apparel, approximately we gained and market product, of elevated Importantly, some direct you at we the growth that priority inserted our that investor have gains was sales we slides provide considerable where the results team by to athletes. footwear, sports differentiated experience enhanced are golf, service and

or billion and non-GAAP net from year. gross a sales for On points full basis XXX XX.XX% year the basis, declined was last of $X.XX profit

profit However, on points basis. XXX a increased our gross non-GAAP over basis XXXX

expected, rate the As compared basis basis two by up years. margin that to the was When of rate XXX decline XXX the merchandise prior margin XXXX, expansion It's we important the drove points. driven of we decline highlight year-over-year our merchandise that majority to points. was over maintained merchandise margin

our XXX due structurally to We a sales. basis leverage in also points of occupancy saw cost higher significant

by basis, billion partially On to increased basis technology due talent compensation expenses wage dollars hourly a million, and $XXX SG&A XX.XX% lower rates, $X.XX XX or deleveraged of net sales last growth incentive This in our investments from primarily were to support SG&A year. expense. was non-GAAP points offset and strategy.

both of to to exchange on our of non-GAAP $XXX on were same of inducement billion significant million savings, basis by million of year million to primarily convertible $X.X principal of $XX.X interest to related expense of our partially current $XX.X the the basis, $XX.X to increase. that million, basis related to Interest charges non-GAAP was during $XX.X This included period due increase due approximately compared million, compared an year. leveraged SG&A notes notes. increase senior points QX offset a sales a was senior The expense a issued last XXX cash interest XXXX. When the also XXXX,

our expanded pre-COVID compared or by XX.XX% of sales, structurally or sales. XXX percentage compares a to of net of Driven a or non-GAAP in net X.XX% operating points and an non-GAAP efficiencies sales. $X net billion to levels, of was basis to million This as merchandise higher XXXX, close $X.XX EBT $XXX.X billion, EBT sales increase of margin

we now to higher sales our These base, significant include higher additional higher highlight costs our deck included investor of granular line the product total drivers of merchandising in and fixed structurally today due structurally versus slides to the The profitability structurally merchandise pre-COVID. due profitability, margin. that assortment, margin our mix e-commerce benefits a EBT company our more the which and is have differentiated pricing improved key with in the leverage management

diluted times delivered compares more In earnings per share $XX.XX. earnings XXXX our $XX.XX per a diluted total, year of per and diluted to than non-GAAP non-GAAP is earnings we share of $X.XX. non-GAAP X This last share of

our to results. moving Now QX

X.X% in QX year X.X% XXXX in This largest increase increase of Sporting sales X.X% $X.X report Comparable We XX.X% DICK'S and a billion. in last history on XXXX. period a are quarter increased the very QX pleased consolidated sales store of Goods. to of the same sales was X.X% of the and increase top increase to a of in

sports. X.X% categories transactions, team assortment by decline increase athletic offset average and million. our comps priority footwear, apparel by portfolio, to sales Our XX.X% a strong driven in $XXX.X differentiated by were very well, partially ticket. XXXX, in across When increased driven X.X% or Within a our did our compared

gross basis, in points was non-GAAP year. of profit fourth and net a last On XXX basis sales billion or quarter XX.XX% $X.XX the declined versus

supply on non-GAAP driven basis basis. by decline profit The of QX points margin costs. chain and XXXX of partially gross XXX points a merchandise was year-over-year However, over by our offset basis rate increased XXX decline lower

we planned, athletes with the our holiday deals. level season, a series As item compelling of during provided

Additionally, to spring targeted inventory we due to product. overages continued late the address arriving

XXXX. a we is actions, inventory these shape in our result as great of As start

assortment. not We are receipts could taking about in our and be excited spring more new

'XX rate are key and and our that margins emphasizing. pricing we to higher compared is been basis differentiated have XXXX, driven our same favorable when QX disciplined product contributors by These higher, to Importantly, sophisticated XXX structurally a a margin assortment, with the combined mix. points strategy

leveraged $XX.X On SG&A January of expenses basis, period basis of was expense a points million and notes to fiscal $XXX.X compared non-GAAP to Interest a billion interest to increase year. last non-GAAP million was of XX compared were last primarily an 'XX. to related sales $X.X million expense increase the XX.X% year. senior of in on basis issued million, due net or $X.X $XX the This same

was EBT sales sales. XXXX, increase net to operating EBT million million sales, a XXX expanded of higher Driven basis of compared levels, of by sales. X.XX% merchandise X.X% our non-GAAP in million to efficiencies $XXX.X This and non-GAAP as pre-COVID net or of of percentage margin points or net or compares a $XXX.X an structurally $XXX.X

to total, and over per earnings per diluted increase year This earnings or represents non-GAAP share In diluted diluted compares $X.XX of XXX% a non-GAAP share of $X.XX. we $X.XX. last earnings delivered XXXX's share per a non-GAAP

ahead we said, are core of of in business House very us, with DICK's about the excited Lauren opportunities particularly As Sport. our

to DICK'S format Stream we & DICK's combo which Field plan Field or DICK’s stores and the As majority Stream result, & or of the larger existing Field part convert Stream stores, XX our of a store Sport to House are & brand. exit

We plan and convert stores to the during closed remaining we these of XX XXXX. QX, stores by

These with impairments to our certain result, charges senior of notes pretax noncash million, convertible a diluted in per primarily items incurred QX, earnings $X.XX. totaling in along assets. included were Stream As charges, related Field of share GAAP & we our store $XX.X

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

inventory sheet. on $X.X Now, increased compared with last to with of cash We equivalents, facility. QX QX year. no $X.X cash of looking unsecured credit borrowings our XX% and billion to balance billion levels Quarter-end approximately ended our

more As XXXX. last Compared to is QX year ahead Therefore, a in chasing industry-wide XXXX, increase comparison sales XX% was in reminder, well our inventory. XX% disruptions. we chain the useful increase supply amidst were of a of against inventory

inventory and is Our healthy positioned. well

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

of our that approximately outstanding convertible also the redeemed of remaining approximately accrued will an in repurchased the million the price the senior notice in of at shares principle for noteholders $XX our stock to shares of interest. gave of the February plus notes, $XX Furthermore, million exchange $XX principal for $XXX.XX. following XXX,XXX the convertible average be We we million total

to notes paid off fully XXth. be these by expect We April

in and of our XXXX, which XXXX move and years Now, which results Coming our let will for off a build in will we two in XXXX foundation year. consecutive to XX-week XXXX provide years the upon outlook, XXXX be me strong ahead. record

the details. review Let's

This Comparable store expected inventory is the expenses. expected in sales margins. expected midpoint, first the chain are down to an margin due EBT includes margin and At positive partially is lower half to by gross primarily be expected stronger QX, meaningfully improvement in costs. to margin flat range merchandise in offset with the year-over-year but to by in modestly of supply gross be margins be increase X%, to improved versus comps expected freight QX to driven lower merchandise improve XX.X%, to approximately be improving due availability.

We through to down the approximately as expense the expected strategy. to is investments which are to interest due merchandise throughout be $XX expenses our improve expected million and deleverage expect to million, inducement to and growth convertible both, related due debt SG&A charges repurchase incurred primarily year-over-year XXXX that savings. Interest is margins sequentially we approximately we our gross fund to margins year. $XX

be the from the up In on total, a up XX% earnings in to to XX-week basis. week. $X.XX approximately coming midpoint XXXX $XX.XX, of range, of $XX.XX comparable XXrd EPS or which we versus anticipate At diluted this range includes share per is X% the

guidance on of rate of equity vesting first XX million employee quarter. tax is shares effective by earnings favorable the the and Our impact average approximately driven in awards outstanding based on rate a approximately XX%, an diluted is which

allocation priorities. priority. to capital organic I'll our in top drive a our business brief remains growth conclude Investing with around discussion profitable

to committed remain also capital through shareholders to repurchases. dividend and through We opportunistic our returning significant our share quarterly

$X.X while dividend, million nearly profitable business. to billion In which growth fact, have approximately included and all of the share to repurchases $X.X over the past $XXX shareholders, returned two years, invest continuing of we in our of billion

for capabilities we amplify appropriate, pursue Where the growth new acquisitions to our will add future. and

All a of maintaining by balance underpinned our healthy credit ratings. is investment sheet our and this commitment grade to

$XXX For $XXX XXXX, expenditure our plan capital includes allocation capital million of to million.

House said, Lauren our business investments will And are to we growing DICK'S engagement. We footage primary with existing nine square the Stream House conversions locations, & athlete combo Sport square relocation. new to XXXX, be of and of the open one we and will grow store of significant drive are will our excited DICK'S Sport growth. make as Field return to eight footage. In DICK'S which of driver along

more that Golf locations begin Performance XX than new grow value Golf DICK'S through we our XXXX, locations. permanent XXXX. open Galaxy In to will of We throughout will construction Galaxy business on stores Center chain of temporary also Sport footprint and House the convert will

athlete addition, XXX of locations. will to we additional over stores full-service this In footwear, XX% experience our convert elevated over premium to DICK'S taking

our basis. sales in on dividend our today, and in payout a higher considerable an conviction of our future trajectory. earnings In shareholders, announced confidence and our $X per a This of or quarterly terms in annualized profile of $X and growth returning is share structurally increase increase dividends to capital strategies based XXX% we our to on reflects

includes expectation offset the addition, our repurchases of effect EPS $XXX dilution, of our In XXXX included plan our in guidance. share which million is to of

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

of back turn over review growth. will to our profitable propel initiatives I'll it that that, key long-term Lauren the With to some

sports At premium in number sports retail the to $XXX team many experience brands. sports been Navdeep. destination industry, important for athletes. become to years. retailer U.S. the Thanks, the the one apparel the in billion are and a we grown athletic our an provide reinventing and DICK'S, significantly U.S., this largest world. world's the Over sports partner time, most omnichannel golf we've we've We leading of footwear And XX and to unrivaled

added and transformed the in sales we billion have three Since years. XXXX, have virtually over aspect business every our of $X.X last

more of are industry in been future our DICK'S. extend about never the We and fragmented a well positioned large have leadership to excited

known Within for on-trend merchandising, and assortment differentiated we've built an industry-leading product.

our with to and showcase Our company. that at brands, partners, also remain our second new created strategic portfolio same the our ever. in than is brand and ability largest entire an relationships vertical brand valued emerging brands We're highly represent with relationships stronger collectively by powerhouse the developing key have brands time, and

heighten And rewarding And that strongly invested teammates providing DICK'S critical of our We our our our to Forbes. we a stores, ability our were experience great level in Fortune's enhanced Employers to in by In Best key month, named one all to we work. experience our In we've make our a service culture to team's fun is continuing America's competitive of of Large athletes. to for provide last XXXX, teammate to one in training are Retail. and Best place athletes, engaged an advantages. believe one were while just named Workplaces of highly

technology elements with and combination cages, golf distinct our unparalleled and Along premium with brand inspire efforts of in personalized marketing building These in-store working. by to in batting athlete are full-service Experiential the enhanced our athletes TrackMan engine reinforce our leveraged strategies elements simulators footwear expertise. in-store provide decks, experience. we've powered as HitTrax and power service, confidence an such

highs our athlete We X year million database athletes during added and record new QX. the in active in reached

younger Our continue new female, for great future to athletes growth. a more and representing opportunity skew

affirmation very continue strong Importantly, We're active nearly our valuable retention high to of our million Center enthusiast multibillion-dollar and and our meaningful our people, well the scorecard Moosejaw, XX% We've be golfers, we Golf announced new a over of such of Lands gold a cohort total growth seeing to athletes sales outdoor of most growth, to gold athletes, real launched leading will Galaxy also and to athletes serve in that commitment outdoor recently XX% hit equating members. outdoor Public better retailer, record category. acquiring X with concepts Performance over representing sales. as and they our drive

there of However, to athlete example no experience DICK'S Sport. our within than of greater the House is innovation commitment

was of an community Sporting deep drives retail total a higher well our It's the and experience involvement, us that destination he is three built traditional sales to in beyond our can inspired create is innovate and that put as basis. street delivering that market-leading has expectations, DICK's with partners out while goes experiential their square concept athletes destination and exceeded Sport well retail. disruption. fuel Goods create House House fosters as It's much store an driving passions. House sports become a higher redefining initial continue way Sport that Ed DICK'S us much Since strong sales as on a profit that from by store foot a per of this engagement profit of to brand is of thinking across Sport and business. of would to our where locations have launching XXXX, challenged

story. significant future growth of will House be part of our Sport a

Over to locations, the hometowns and open next New of of Boston have the around years, additional XXX And as Houses years, XX as next Pittsburgh to we we two the many plan XX including York. across Sport Downtown could and over five our Binghamton, country. two

We are fleet. DICK'S also our pull key to core learnings continuing into

In Sport we're will excited Bend, athletes. fact, the which later open to in South the our square DICK'S Indiana, year, next-generation this for store XX,XXX learnings of House reflect foot

our those experience to recommend, person, in Investor a website haven't the which to highly help of chance Relations a House we've yet For to short life. we Sport bring who visit added video had to the

continue Across omnichannel our to improve experience. ecosystem, will our we

with For decades, the focused making on game in we long in meaningful mind. technology investments

and their technology to sports. needs the points personalized by significantly best arguably a meet have the in data how evolved over desire experience set through athletes and enabled we touch years, best Our think about

believe and investments industry and our omnichannel the by than and in with provide capabilities our are results single-channel distinctive frequently athletes. our who long-term are in shop growth us spend We a excited more competitive advantage. these continue athletes see We're generating to more

As app and and expand youth sports, a pivotal multibillion-dollar mobile leadership sports a GameChanger in new scoring role. our the for is sports position is market. we premier plays in technology GameChanger statistics the leader

while connecting of GameChanger As revenue XX%, economics coaches to best GameChanger, families unit streaming, delivers we athletes in easy-to-use a mobile are With profitable, consumer its Software-as-a-Service technology. one the of of and and their being a live recurring function teammates, revenue model, five-year has CAGR delivered company, score-keeping on also app. which through business youth all some

experience our to GameChanger platform user years, the their are million families for tablets, new to their video eight two on GameChanger all on Over engage the and X hours. covered with families phones year, athletes they streaming games Every and team million sports, delivered transformed are. anywhere its XXX past and highlights and over their incorporate and athletes nearly

To Companies Innovative Fast a named Major also this to held more will on of Baseball. for the named Most Tech covered a the the played GameChanger Business in Sports in month We perspective, list XXXX League and finalist for spring history honored today. be Company's single Journal: entire have put be in see World's than that as games later awards of been are GameChanger to were

and we technology continue this within important innovating Looking will strengthening ahead, athletes. e-sports connection with

Lastly, in we have brand big for our plans XXXX.

Sports efforts to sports a initiative. marketing tournament and inspiration Matter share for been on the make a and time of raw to we're we benefits participate to inspired during that's power our brand with really lives. athletes of it's unique motion always change marketing program will our life-altering the youth To campaign the power made it the athletes experience relaunching believe that brand the with pleased our focused of blend to the to happen, our aspiration possible and NCAA that Over Matter upcoming sports our part be and We more Sports brand has provide. that has sports a youth years, in

team of are We great has if or done. not it. our the proud promise watching And you're so you tournament, miss I will men's work the women's,

our fund $XX,XXX organizations, to $X In more each commitment sports addition, a than kids keep we're youth to grant combining from playing. with this with million XX a foundation of

marketplace. our QX the of life all our from In committed that our our strong the pillars the lives, lead our XXXX is growth in are XXXX, differentiated in and sports drive business, engagement, agility for supported reiterate change athlete execution to power of new and by better of the no positioned to meeting of this evolving strategies, outstanding brand to that importantly, relentless believed our product people. closing, we we belief our needs believe bringing we result to our innovate to of direct Since our experience, the through foundation want and one and team. most athletes the DICK'S These performance and, is to are has in

I'd across their like for teammates thank of to our continued outstanding concluding, center and our stores, customer Before centers to business. commitment and our all distribution efforts support

now the Thank Goods. remarks. prepared our in open interest for questions. concludes your you Sporting This you for line DICK'S Operator, may

first line [Operator question go the Morgan with ahead. comes Simeon, Gutman Instructions] Stanley. please from Simeon today of Our

the merch then, My guidance we first 'XX [indiscernible]? margin, you're level margin And markups number of that being up. underwriting Can question initial is source, the less is on promo? the won't has the us that underlying is mix the you tell baseline merch XX

Hi Simeon, yes.

level is a 'XX new fiscal indeed margin Our baseline. merch of

are planning will the answer turn to going breakdown that grow to We from Navdeep we margin forward. think where to year. merch next of come I'll our

Simeon. morning, Good

next driven margin profitability long-term about as the margin. in the to line about of our expect improve As continuing the in as guidance, we And basis year, on talked optimistic merchandise we very by we and our well. profitability are business to our and top we it, articulated gross growth both, grow

the Okay. I follow-up sales. guess, switch to

the of performance. a driven One factors sales of the lot better or factors have

of sight evolve you've product reflection marketplace be widespread. the I and to distribution, well should What's also that exclusive your continues place a done holds with this more how of key some that product structure DICK'S a has of is to that DICK'S be think narrow the doesn't helped. that getting line idea but new

Thanks, Simeon.

change our growth, been it We there product forward. -- growth transformation, mix right a absolutely there and has will structural our key driver be in of that five and going our driver has it's believe business a our assortment been the You're our and last over years. in is our of been a

we've endeavor our in shift to order seen completely revamped excuse those a health – experience. meet they're active and all, prioritizing you as sports, lifestyle, -- athlete in where also But of are prioritizing me, mentioned, they needs. First and athletic consumer healthy DICK'S we've and behavior

we've omnichannel got as people to leaning can are our people we that in such model continue goods capabilities so into brought on. experience great got that So, We've into. in service and that a the buying. we TrackMan HitTrax overall And focus that experiences really feel confident they're

our showcase and from lastly, advantage. forward then a brand ability really become light brand put to possible and to best a head to big And toe a the has

access all have distribution, fact field now to of We're needs the price their in products, to our So, way meet from will enthusiast point our that that the desire confident to opening we on the is up the absolutely growth. what part our products strategy. ongoing very

with comes Yih question Adrienne Barclays. next Our from

the larger EBT is how longer-term kind Lauren, in what and now a the footage much, year. are on talk also end a that on the acceleration to stores consolidated I opened focus growth. longer-term of kind contribution if the the concept And we or you're the those kind the top boxes much In of EBIT and maybe I you should and you line back into of impacting do very horizon, sort follow-up, margins to It that that five-year then look the that. are store productivity will? being of and size, sounds like about of Can on Navdeep think. environment, four three-year of my like wanted Thank you horizon on about sort maybe think great and sales walls? nice of square new

Thanks, Adrienne.

we that footage correct a built as Sport, well a experience that three new have more due are You're total profitable, really the both fact concept profit, House the basis, on sales, into leaning scalable, that as leaning the as stores to highly square we are And specifically more basis we that growth. become had experiences absolutely growth. into with store we've of

And one the construction We're so, nine in can our start and Sport relocation from that well XXXX our and what being year. to built already this we're XX have on year we House that this as business. Navdeep? this for will pipeline bullish for as athlete of do are very very, going in experience remodels

Adrienne, question. great

to I think, ways maybe there answer this. is two

have new our baseline is the First foundation we term. and earnings sales grow which upon like of will the all, long we said, over XXXX

noted, we Lauren a opportunity for amount is the share of as gain still also to As we look future, tremendous there believe us.

And largest are just goods is right billion We the now, $XXX share our in industry X%. sporting company.

about square And that our we continue give comps, we look gain rubric, the future, athletes as differentiated we provided continue our continue So, positive can the I'm expand profitability assortment to that based think to footage to future. and that and opportunity for are have optimistic, guidance as very to we we optimistic you believe not are have very our to to grow the see, on and we that it, drive willing about to continue we XXXX. service can today into a the to share. to here's to provide continue long-term but the way

comes Our of with Robby Bank next Ohmes from America. question

just and quarter kind I the is in of Are of I little a questions, but think obvious, want of just I think two -- sort color? this could -- then first comps strongest they the to you in cadence more XXXX, give want year confirm X, for year. through just is at doing And implying think negative we half that I somewhat of the I then, you're to same-store related. sales the and the that. back fade the question X should other be to

size have traffic that, said online color be of obviously fourth the things weak quarter, can in store -- And or around don't lack I Just you then guys related to that or think down more think negative that. Was color sales you transaction great. us the -- was, doesn't you large store the more I give traffic ticket would these was increases? also same-store Any price offset transactions? it? on X.X%. it Is Is -- it average often? guys size average That transaction on

start half stronger Thanks, 'XX, do we second in Robby. of -- in you're off. half. I'll to correct will the comps we first comps expect fiscal that expect the The be cadence than

think encourage went this had and time, inventory to fantastic it and look. athlete spring inventory a DICK'S a experience. store we in. the last QX came back reason late our why actually go you together At as is product As to in on. QX, challenges. I the year to significant was put the at to this really difficult take whole And year point, That's would a you

have assortment. We fantastic a

the in year to last our first the confidence in we business, to And half. and we very strong so, comps be do from the comps expect due have

questions. I question over saying your towards the I by want the up to will transaction the comp, transactions down it break to cautious. a -- moderate. with some back will to being X% have the of We're start comps Navdeep look it you I further of that year, start up about size, turn reflect against we fact X.X%. I'll think to half turn we're want As your you just But and do that to were

athletes spent were So, we average database. AUR, that's find in They don't while shopped frequently ticket and more we was in did there we in they a that and UPT, there more decline whether have athletes, more total, so slight -- break our more. out

size, with So, that. X.X% transaction with pleased comp delivering a of level really that really, we're

morning, Good Robby.

you -- saw ticket the Maybe to performance. think covered much balanced way same that transaction at Lauren well. is our this answer about think we versus another look I really XXXX, if and

the look another have very about maybe the XXXX. that. we provided way that optimistic for guidance as you to guidance is And are think overall, confident to we and about here So, remaining that then,

Sachs. question Goldman McShane Our with Kate from comes next

go to the there and back margin down drill expect bit gross you that changing little Any margin things would it because gross if promotions you is the of be better? a such driving wondered the 'XX. with expect lapping a Is better? the side severe merchandise be to to in relationships really little that improvement what we 'XX vendor be helpful. in merch there something or bit in the and margins terms could issues for margins we're inventory We Is

Good morning, Kate. This is Navdeep.

expectation. margin gross the around commentary color two gave we So,

expect margin well expenses margin as margins we start into and we freight the the the to as that merch XXXX, two benefit well. see that improve merch as will will XXXX drivers, that lower gross First, into

for of was cadence imagine, as inventory terms positions of as QX, in and a can both more margin was constrained. In -- gross as in merch -- us bit the pretty around the the lean industry well you little itself, pretty

expenses freight as level our we that's half, of in normalization a of as in of margin merch the cadence those are to as gave we think some kind annualizing starts the So, inventory expansion. to what first turn the and we the expect for you pricing also because And to benefit start expect half about the capitalize have back the we we that, expenses. the

that the other that's factor contemplated So, we have our guidance. in

part one your to just want of up pick I other question. Kate,

assortment or environment. to We lapping Going, great Going You entire keep asked an be inventory an overall merchandise. a the through whether stores managed were for of with really full-price severe we're throughout DICK'S And we promotional through clear inventory to last chain through was promotions. inventory I we while able really lot of to there cleared and return or Gone! looking want year, that our no the was disruptions chain, issues that very holiday true store value year.

that not So year especially on promotions, wasn't up in promotions a There to just item want price lumps, but time, last us. our factor key highly pick I was it on were promotional for a discounts, year. all up story comes environment the

Horvers comes JPMorgan. from with question next Our Chris

of couple top well. line-related as a have I questions

referenced first, period think getting is you about up XXXX how to XXXX the So you've a point. a we're even point, planning good until reference this business, as you're

-- to more that things then that, of business cadence think sort looking compare, think is the half your back? that a in as the hard elevated year? the sales related year you're And as naturally four-year like a you seasonal of what going that back are broadly, and to comp do expectation about some basis? at reverts extent the the you to on like that then, you promotions terms So, And over just get just back normal half to have of to trend that the in

Thanks, Chris. Yes.

is is bottom as is top inflation. there shopping just grow downs because well We're finally, will as few cadence line. and new are our years, the XXXX the year, to some people the hope base 'XX the not the in And the seasonal which and of issues going to having with with grow. all yes, it and we're consumer talking on this year forward. that but normalized that of for been just line last some to inventory behavior going past doing that challenges have the of from ups We we be going due had impact

-- so that of normalize we're to continue that this forward. can from will plan we hoping will going this All year

second and our Important elevate to trends just what to in Kate, promotions point not I our half. saying did the comp related was

most our that warehouse value had inventory of comp. we and liquidation fact, chain stores, don't in happened in affect In our our the which

by comp Our in transactions. X.X% transactions, increase was driven

from D.A. comes Our Davidson. Mike next with question Baker

extra want Geez, your of think but which too in supposed March. ask a that questions, the guidance, estimate hate I Moosejaw, and sales is is in ask boring to week, be beyond? We million sales probably comps. growth to did XXXX would dollars, or versus the to outlook couple Okay. about I that mundane, or but close can modeling hundred you Is above I

Go ahead, Navdeep.

included not has not Moosejaw Mike, as our guidance is transaction closed. the yet in

include in outlook. So, we commentary will that next our quarter's

to It's material. be not likely

Okay, fine.

a expected -- interest us in income It isn't within be is expense tell big was a quarter. your should told Okay. And question. to What you interest what driver modeling to second us earnings guidance? you fourth EBT interest income. the Talk what XXXX. in about Can then, us

great question, That's Mike. a

we will in we it as opportunistic continue that cash depend that also have what with think share all the our do buyback. to with do guidance we on our I included remain will excess

So, depending cash excess we rightfully the interest yield with on to our a on But on an on what environment income. balance we current said, we that get do the interest that will have able share with the good the are you have, buyback, impact sheet.

Our next question comes from Michael Lasser UBS. with

that XXXX start let the margin -- that gross mentioned you So again. me XX.X%

here, that margin lower a Plus have is amount inventory gross from higher the mentioned of of had yet You liquidation from the XX.X% over new you from you'll XX.X% to significant start year margin last which costs. of -- within level transportation the the gross that. benefit move XXXX

are you In more to that wouldn't that little So why increase just to you are what drive get to moving going the a Are that in of back? you your a XXXX. to nutshell, degree forward? provide why assuming of going a, And margin gross that transportation promotions bit offset? and gross will an better isn't margin be going are expecting even costs

sure Michael, of because middle with part understand we -- begin currently your your let's make the question question. maybe I'll

over cost the transportation the case, expenses was the XXXX. Actually, that indicated benefit is that recognize turn because inventory. the of in a freight not we You the

We're the baseline. that's the indicating of we the in part to and new So and see profitability we both talking company of -- gross time the the to sales of about the by of profitability started by question, through, freight what not is the your expenses the rolls first the of kind And of see early we're in start about the half guidance, said we overall second the benefit the will time margins. to the benefits actually it the terms XXXX.

confident the both improve we merch we over guidance very into the So, will margin in gross where we XXXX that that profit are and gave XXXX. we finished

to for clear, the XX% way it gross inventory my case assortment the the in have priority as fourth an favorable priority the key had quarter? did just when and categories get back have was should in complement clearance difference not that in how category XXXX there transportation that? margin Did for of add elevated and because costs the ask the did material question question, Why top better see you within of on in to the apologize you in that. the And the stores wouldn't cohorts wasn't stores assortment stores? want had second I that comp full you to those you to do a Here's compared less maybe I of

take I'll first the to and Yes. I'll turn part, Lauren one. second the for

that structurally of that level over holding in profitability of have XXXX. there time, like we that In said, us terms nothing delivered back achieving we from is is

So, take can over Michael, time, the maybe Lauren, second comment is your you And one. appropriate.

Sure. Yes.

If assortment, sports, really we drive think priority us premium our investment because -- comps. as a does and full-service our heard you are athletic about remarks, have those, enable delight us to prepared which of footwear larger apparel, it does team in in our full footwear you making footwear, to the decks, strong allow a categories in athlete

-- QX But how comp. we're generally that, categories. and was did to not it how down drove assortment our was in various Beyond going break the speaking, strong by we really

comes question Oppenheimer. with from next The Brian Nagel

and quarter Congratulations. year. Great

a normalizing inventory bit is So of your talk my I in first promotions. -- And question mean there's of just about a a look, our broader obviously follow-up. clearance lot and space

I the half promotions year. if is So, the business did hear what of in second that the not you're saying, drive

or as optimistic we drive improved 'XX, us help of actually will sales the further availability first DICK'S. into inventory look the You're half improved better sales at

seeing then that? retailers? Have So what other promotions just your been or DICK'S other company, you're you have by not outside is, of just the affected through is with question I brands managing

Yes. Brian. Thanks,

our outside but at by time -- promotions company, environment. looking is outside not can't assortment DICK'S it's spend differentiated and don't narrowly now that So affected distributed of of so any just we our I promotional an a say is lot

We we what move investments have where manage We very our an basis people. million on in offer, price item necessary more a of extensive database XXX focused are business. much to can personalized to and on we want pricing strategic

question is then there. what Congrats second also just I happening very on have out to DICK'S else that. looking at helpful. That's the relative And

here. talked So number some it be about other lately type improved their inflation retailers consumer, whether or factors. have a sales pressure your of of within Clearly, economic

more is, the strong consumer I the I And basic the pressured what's look you into behind as results. any signs So 'XX, your you are of guidance have question underpinning assumption outlined a macro guess today? seeing we

Thanks. Yes.

very very, are would So, few seeing our a we well. I consumer points And that. point data doing on to

but active pandemic. gold And before more those seen -- So, growth the every past our that sports. wellness popular saw of And our is are growth, health income we're we growth even demographic. they team quarter. athletes, single lifestyle We we and in saw finding people income were one what over prioritizing and each are in they're and than demographics, this have

I it more to decided with whatever to I'll than coming their think these assumptions. life Navdeep, necessities people have categories. rather They're our turn they're on macro have discretionary. as prioritizing really in they question you wallet,

Yes.

about and look comp of is macro But, X, provided. to to are guidance in the what as macroeconomic the we that we have your have assumptions, at you happening terms point, optimistic the plus about In will very confident we guidance the continue to flat mindful be we landscape. provided, that

confident number that over on have the the well the athletes the we are last based have differentiated of as as capabilities have assortment, years that Just provided. acquired in here, we guidance that we the we several

Warren Cheng Evercore The with comes from next question ISI.

just wanted Nike. with to partnership the ask about I

engaging talked were level partner? So, any investing they've a best and lot Or about you in of using data before. can than you're over as on they're give customer there into the a data? how loyalty been program strategic a with plug-in Are year now that the they've they deeper on how they're getting examples updates partners. much presumably a just And you insight

information that level. at with each consumer how insights membership product looking we're sharing, connected state gone. Our and strategic a category working long is term at relationship that very the at all-time an that's of pleased we're very the high, very and sharing. We've Nike are and everything And from the we been has with

loyalty over can have we they're they're link to accounts. to partnership. our in that get much shopping shopping, and how that, continue and because able have better members both We now opted DICK'S into innovate how insights their X Nike where athletes, their And we're million to of who

that that haven't We're gotten is going wonderful down we're for very the us. coming about offer some into membership the just a overall, terms things we experiences Nike partnership a tremendous in to pike of connected But excited that yet. the omnichannel partnership of with --

that accretive that comments margin clarification my -- some happens? be to that margin that Sport made on rollout. is of neutral, the before follow-up, a you just House scale does about time Is And of actually or the take Great. earlier going to or

Yes.

just before into comments of the a get So, Warren, specifics. we couple

both we that are results, are strategy. the us So, bottom of line have the three what very confidence have. right. and confident we gives that seeing really, House the the we But are top opened, stores. it's we on And The the handful stores line Sport of that really about a that's

things, of In over you as terms the be can impact imagine. time, recognized of these that will

be to years, open about Over we XXX. to XX, the the prepared next comments, intend like it next XX five two her could years, and said over Lauren in

about provides strategy us So, we the with as and the benefit very optimistic way. to very-differentiated athlete differentiation well will time. be But the a are the as seen ability it over in engage the

Lejuez question with next Citi. Paul from comes Our

pop-ups terms How plan an update sales are many the Gone!. you if F year of in what could many Going, share And that you Going, How added to in anything permanent? And 'XX? with? on curious end what's F 'XX? the I'm did you versus for give can

Sporting athlete us of end a as than the stores, So profile the are plus Paul, them more temporary XX We the allowing different the an Going, we them, XX call the kind Goods locations warehouse permanent, of engage like is them, it of about that in at Going, had we athlete. and had those really, were only call Gone! as to there year. with really we terms of strategy. Not enthusiastic an of athlete DICK'S

benefit. that's So one

that able In get talked recovery and a for we about a is to provides actually addition, inventory us. being better in that asset strong of the rate on terms this liquidate also our as inventory have benefit

I would just thing. one add

way at chain the Going, think that look asset. flexible I a we Going, is Gone! it's the

those down can So, that we've or and with don't need expand, if can We them locations. temporary we pop-up not our done they're if working. take we

something is the proven flexible. time Gone! it's the and So, strategy warehouse Going, Going, a concept, but tested, very by been becomes

corporate? of is CapEx both that how bit maybe and stores just Thanks. new you for existing IT breakdown could of level, and 'XX? further then, little And much it. just investments versus Just give store a a Got of at the

will plan open Yes. the openings. of of as is capital XXXX the right? or Paul, out, we to be locations the into going Our House into do well nine investment -- new investment Sport capital Sport vast majority as earlier stores the House as the of called

investment upgrading to guidance. investments are as footwear we also as backside well personalization the store the that we'll decks. that capability to and But will terms vast the in the XXX addition, analytics, technology, In from the on of the other of our of facing. indicated, in is continue full-service premium an GameChanger we the definitely of data as majority investment be stores all be is making There entered in

The next with comes Cowen. John from question Kernan

great year. on Congrats a

It we quite comps about that has reported this was looks how new productivity gap think quarter, So, and store to close come the footage should overall basis growth? contribution points which would sales has between new like XXX the from any store productivity suggest square online been productive.

of should how stores also one, you're number and talking of footage we to overall store model, of the and as based them. curious the square size growth some productivity just So new on bigger

Yes. John, to two answers that. different

the driven is all, you're look at by you growth, of said, sales of if some like that the seeing difference the openings. one, comp First and total between the store sales QX, new you

warehouse plus not them, call comp we the In are they addition, included that as in the temporary warehouse have, stores, numbers. we the locations

in quarter fourth temporary that. in during the sales So those are happened the that included locations

when now improvement store that are your House remodeled Considering the comparable right a we that relocations. to Sport store store Coming location. stores have see question, a of we to the of our a to convert Sport of a location from macro in even back House or sales do basic XX,XXX significant the we majority productivity a

So, of of yes, location, we a our benefit new those as start metrics. House productivity comp Sport as will to our open be will store They the And stores. definitely in new part when won't brand-new be expectation. DICK'S they

Telsey today question from Advisory Joe Group. comes final Our Feldman of

little might about based bit on XXXX? into or or more emphasizing you're be any to the a wanted considering any certain ask products from what that seeing there changes trends for you are consumer? I merchandising or leaning you might be Like, categories

where footwear focused speaking, But we still team the priority generally on categories. categories, golf. very-focused XX% Hi, we're plus new business, looking growth. four apparel are sports, and and that's our and our driving on new Joe. We're that's athletic for of always Yes, trends

Got it.

Okay.

newness of those. much coming, not some So What guess, I about... for

Joe, just business. sports, to you footwear of ton any Sorry. to coming. of just there team apparel want newness. of newness I -- categories we're a share priority want wasn't There's across I with there's didn't our I are the golf focused. newness a certainly that ton say and But where

it. Got

Okay.

how for that. of misunderstanding with feel fourth maybe your is penetration shared brands. saw regards have color in Sorry a around I the for what private consumer there more quarter. the you kind label, latest little you share of some the guys and then, just could like to you usually And opting

Yes. Thanks, Joe.

in last year Our did the vertical brands tremendously well quarter. and

well high function, brand, as how VRST, space really doing with pleased CALIA well. is And DSG portfolio. even as opening in the Hagen the high fashion and white are filling our is doing, which We incredibly brand point price brand are

the a past about few opportunity look about we year as and had margin goal forward. vertical this our we finished and vertical originally overall So of brands, out of billion X.X. to both year, go laid about penetration was sales XX%. brand We end for a the ago the years $X excited Very at for

XXX you to than XXX As average. points margin our higher vertical know, basis brands have of

Hobart, I'll call we today have CEO, turn the all time back is questions. for remarks. that for Unfortunately, President now Lauren and the to any concluding

today time for your for We forward all on interest in you. look Thank seeing call. your you Thank Sporting to Goods. and next the you DICK'S

us now disconnect call, lines. today. concludes you, Thank and joining for everyone, your you This may our