DICK'S Sporting Goods (DKS) 30 May 182018 Q1 Earnings call transcript

Company Profile

Participants

Steve West	Vice President of Investor Relations
Edward Stack	Chairman and Chief Executive Officer
Lauren Hobart	President
Lee Belitsky	Chief Financial Officer
Michael Lasser	UBS Investment Bank
Robert Ohmes	Bank of America Merrill Lynch
Simeon Gutman	Morgan Stanley
Brian Nagel	Oppenheimer & Co.,
Seth Sigman	Credit Suisse
Steven Forbes	Guggenheim Securities, LLC
Christopher Horvers	JPMorgan
Matthew McClintock	Barclays Capital
Michael Baker	Deutsche Bank
Sam Poser	Susquehanna Financial Group
Peter Benedict	Robert W. Baird & Co.
Omar Saad	Evercore ISI
Camilo Lyon	Canaccord Genuity
Beth Reid	RBC Capital Markets
James Duffy	Stifel, Nicolaus & Co.,
John Kernan	Cowen and Company
Tom Nikic	Wells Fargo Securities
Patrick McKeever	MKM Partners, LLC

Call transcript

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Operator

Good morning, everyone, and welcome to the Dick's Sporting Goods’ First Quarter Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note today’s event is being recorded. At this time, I’d like to turn the conference call over to Mr. of President Vice West, Investor Relations. Steve go please ahead. Sir,

Steve West

Chief approximately for Good be on at results. discuss for to Lee of and Belitsky, Chairman On President; portion Financial the Hobart, you of morning, thank joining website, today's and days. our dicks.com Investor our Stack, A call our be Relations us Officer; and archived located will Lauren our everyone, XX today's Ed Executive Officer. first rebroadcast Chief quarter our XXXX will call

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

I to XX XXXX purposes, now Ed. on publish turn the call scheduling to with your earnings market XX, that, subsequent planning dividend second with admin the of dividend in at opens will and closely release be the will Time. schedule third AM announce release. align and any we the items, our tentatively to announcement couple we earnings for our for release new our revised calendar And quarters, XXXX Now of more quarterly calendar. consistent reporting Standard With earnings for are before with future note please over our Eastern finally second conjunction August quarterly our Also will earnings call quarter with our that timing SEC we

Edward Stack

Steve, you, good Thank and morning, everyone.

of the West to first like introduce moving Investor Relations. review, business I’d to formally Head Steve Before new our as

diluted to IR over the our Gilch role like his supporting are full-year pleased new diluted I’d moving range and to of outstanding leadership per raising guidance earnings thank to for within $X.XX Additionally, Nate $X.XX This our to operations. past we’re share earnings to field Nate’s report a into finance years. share work organization of $X.XX in per $X.XX from $X. morning, a

quarter business X.X% revenue our week for First the increased X.X% shift e-commerce XXrd the year, grew due and Adjusted last our XX%. billion. declined sales same-store approximately to to $X.X calendar consolidated

percent year. several online approximately approximately As brands. margin expansion penetration net due total our our business same a of higher sales, business of Merchandise key period the from and innovation of stronger to to in newness margin the private across as last our majority is of increased to the XX% categories. partners, This rate as increased our rate X% compared well

promotions. assortment refined led with business healthier to fewer Our a

of During the benefits investments. to started our many strategies see of quarter, we the and

quarter. three continues again top to in to number and We’ve grown has and our strength years business our the portfolio be our the CALIA brand new given priority. in premium expanded average to brand apparel athletic only women's CALIA source Nike. our accelerate. business it and space growth private outpace double-digit continues since short launch, private is two brand categories our the number our of its is to stores. Driving First, within three Company This assortment this a collection in delivering exclusivity behind In that differentiation our

national and partnership with clubs These Armour BMW the were quarter, received have also designed Tommy launched recognition. This we Designworks Golf in Clubs.

relatively short brand reach $X significant billion private it believe of and our have a business We momentum over can time. in period

of impacts merchandising positive are last our we we seeing launched strategy the year. Second,

Over supply vendors, and non-essential our and year, course complexity assortment removed last relationships the from eliminated enhanced chain. partners, we strategic with of

result a of to have and a last refined few the efforts, positions, we promotions As quarters. inventory, more these fewer compared assortment, better in-stock cleaner

first to sales. a compared merchandising inventory this margin our increase levels better declined better quarter, reflects and X.X% during This rates. to Importantly, year-over-year in translates execution X.X%

on We continue to base. assortments vendor work optimizing and our our

technology Our investments results. to show are continuing positive

our continued past are the than now to experience online has improve. more e-commerce platform We a proprietary customer year launch our and of

we our Sporting the extremely of Goods. with am As XX% the growth future we of are about very anniversary Dick's quarter. I e-com year, website of launch this optimistic last past pleased the

during omni-channel experience made in the on Lauren build against progress all will athletes. focused our remain While strategy more goal pleased our to we’re detail for the quarter, this we best with goal. the outline

to Before for to I'd call past associates like commitment over Company the thank I turn work hard and over to their her, year. our this the

turn belief sports the power now We’re to sheer have make people to the that to over driven call I'd by Lauren. like better unify us. and the

Lauren Hobart

and morning about Ed, everyone. am and the very customers, good drive advantage us Thanks, opportunities front excited our with the we Like whom in have win athletes. we competitive that Ed, to I of call

omni-channel As goal. all built achieving athletes, best for build strategic a to experience we this we've for framework strive the

in core best to experience The shopping of strategy first relentless the our our make improvement is the pillar retail. execution of our

when, priorities. two to touch frictionless across points are all are that with regardless their path for There how key are working with or make areas visit athletes of within the it journey to us. shopping they us where, We to of engage want

First, in-stock our and easier and to impactful price we are our offer powerful our ways increasing presenting for guarantee. to find athletes in products best their continuing and products best meet it the depth, our to by making positions needs

includes and convenient focusing it athletes to complete of both we on This more transactions. Second, for making are in-stores speed checkout online.

combined on growth. e-commerce improve and execution Our order with core contributing average new platform quarter in to overall XX% online the rates, during efforts to margin in value better resulted web functionality improvements our conversion in the

invest of our experience, reliability and the improving delivery. of to athletes’ online the in to improve part supply As speed we chain continue overall our

one a also a is select learning stores, near up of people our at Dick's testing shopping This pick solution. pilot order This improve conveniently also an to improved experimenting approach are are Goods new allow experience, to marketing are to just waiting which rapidly assistance. within continuously example We the we efforts part entrance our moving agile recent a innovation going of store and it of experience. hour omni-channel without to online one for will of This to taking pick the Sporting the become core up experience we forward. through quickly, ways and optimize online includes place Lockers which

Marketing we and campaign highlights will our emphasizes omni-channel to shop which that the a benefits TV connection emotional to major we a we the platform raise that provide as continue fact, launched as ways the deepen new brands. with can an powerful many today athletes In retailer omni-channel priority be awareness and of us. our

The guide second strategy and athletes. is the leverage our inform to of our Sporting power Goods pillar of to expertise in

and providing athletes goods Pro this well assortment In as share the Tips as with of and the which Digital most sporting addition provide with as example brands is differentiates premier One industry, in categories expertise omni-channel our products through training of us how-to the retailer. compelling our advice to the on athletes our guides. segments, that we

to of the launch great running shoe. example Another with new is Epic partnership this Nike our React recent

the and depth strong to in online us in and significant with marketing successful. Nike product, joint which our a this our make to be efforts Our in-store leader extremely launch presentation, and helps access proved

which a We loyalty ScoreCard tremendous asset. are program also differentiating is ourselves via our

users active the XX in more million over our We of have accounting program than XX% sales. for

effective personalized data This engine from in the So and of direct incredibly enabling marketing the meaningful the to program engage efforts, program digital robust. communications. and our is is us more one-to-one

continue including better most an reward to loyal test ways also to expanded our members, new ScoreCard our goal test We of program. ScoreCard

in strategic pillar business. third our productivity is Our improving

ensure invest disciplined on of our We and focus only resources, time, to contributes we to the are highly company. and financial strategic capital we that objectives work in the how

from on processes for a driving business. We in time allowing very over efficiencies Company added growing turn and will us continuous areas to our about is outlook. and speak activities in specifically and and more in business, driving marketplace, improvements. creating call This to results now differentiation focus excellence on our Lee we I identifying financial our exciting the core savings non-value focused as to of our are the delivering reinvest productivity

Lee Belitsky

morning, good and Lauren, you, everyone. Thank

$X.XX Let’s a average billion. Consolidated the calendar shift $X.XX of which quarter with colder versus to last X.X%. declined by week X.X%. Transactions believe ticket same-store impacted declined consolidated results. This by sales last included share. was first year or the spring for and the diluted calendar begin review this Adjusted X.X%, XXrd increased from by per weather to we year, brief X.X% approximately due our million sales $XX approximately benefit shift of a increased

reflect meaningful reporting the the to shift calendar indicator believe to continue We the is performance. of comp our most

we've retailers calendar, unshifted the with it quarter. on consolidated the sales given seen Based both confusion felt other possible recently, the ways. reported to same-store and X.X% as as was an be However, report transparent declined important we for who some comp have

quarter in Team our win. Equipment at in on from comp Eagles positively the Fitness Bowl saw Looking our categories a best these performing and basis, Sports benefiting license and strength businesses, we the shifted also sales were Super all

Adidas, by growth double-digit company we comp Field from private sales in to brands, Stream, our and well significantly CALIA, the new Team our Sports sales as as brands. outpace drive & Additionally, growth continue driven which average strong

Finally, These increased hunt of our areas strength outdoor cold however businesses. in and apparel by sharply. our were electronics weather and businesses such boots declines as offset

accelerated an already policy firearms an As our expected which our in hunt saw challenged decline business changes category. impacted

we exiting fitness business, which in double-digits essentially that the Electronics high Our as was business. tracking is primarily down are

significant in businesses on said year are remainder full-year and expect we we the the our pressure quarter remain the fourth throughout headwinds incorporated to call, under the outlook. of these As

categories However, a lower businesses. these be we tend perspective as are to margin benefiting from margin rate

decline $X.XX XX rate by and million higher XX.X% more by or costs on the sales, XX related e-commerce last compensation the the margins the expense support of rate strategy. million to shipping and marketing and to accruals incentive The occupancy well expenses offset which of to first were approximately margin, $XXX.X for first quarter from our for deleverage lower point of by mix. our Olympics, driven basis no our tax period state deleveraging a promotions growth net versus driven with initiatives quarter our to basis diluted our increase as quarter $X.XX fulfillment approximately in in as XX%, and contributed year. brand tax the earnings. a guidance same a last year. XX.X% of was items quarter points investment were than our one-time Moving profit higher deleverage. XX% This was we gross there the a sales margin, earnings during quarter. to merchandise This building quarter points per This however settlement. rate basis XX growth the was effective higher share gross delivered primarily in first business total, due associated expenses increased $XXX.X tax was merchandise or In favorable Within favorable to was non-GAAP SG&A long-term

ended on our revolving Now and million looking sheet, balance cash our approximately and first we cash credit with facility. $XXX of million the equivalents to quarter $XXX

first our capital quarter were $XX net to million. capital Turning expenditures allocation,

We million at also price approximately $XXX.X for million of X.X an a shares repurchased $XX.XX. average

approximately the quarterly during dividends. quarter, $XX paid million we Additionally, in

we are fiscal same-store flat low guidance our sales our outlook, single-digits. at XXXX to down to Moving maintaining

to to as are in first a higher the lower our per Ed primarily outlook well from share and mentioned, $X.XX as lower $X.XX as to share to the quarter. we Additionally, $X.XX account full-year raising range $X margins rate of earnings due tax diluted

impacted three due following to the questions, take call, impact in impacted Before positively to and a last for and we said four net the the year on their on shift year. year, the quarters quarters and your we and negatively two, earnings as expect one calendar fourth we sales XX-week neutral be quarter in

sales first expect on the impact what we the quarter. quarter We in earnings to to and second saw be similar

Thank This Dick's concludes And we offset the in games quarter, Sporting the negative subsequent prepared for first impact remarks. for two the Goods. fourth you your interest questions. line you our may expect and quarters. in to For operator, third now the open the

Operator

UBS. from Instructions] with [Operator Lasser question. your go question Our Michael ahead first today from comes Please

Michael Lasser

back this significant performance half is performance when the anniversary over the margin coming particularly the morning. quarters, in margin rethink merchandise trajectory So all lot the at you're year of Good declines? type the quarter a performance we should sustainable? and expect to of the going shape you now that margin first question. flow taking and of Thanks the the about Has margin my in made the for –

Lee Belitsky

So Michael it’s – hi, Lee.

Michael Lasser

Hi, Lee.

Lee Belitsky

sustain We’re to believe that able can very we margins year. improved and merchandise pleased throughout the with we the merchandise we margins quarter, in the are deliver first

Michael Lasser

you and comparison And maybe fair? easier to margins expect here improve, more given correct? that substantially year-over-year, that the is so even Sustain be merchandise your up , get grow from will

Lee Belitsky

Well so to we in quarter, as it we up comparisons be you of fourth most know over the are followed do last who expect have year. so The dependent us.

dependent on so We’re weather.

it cold dependent. too because promote warm, margin rates we last If that weather be in normal know to the So year, winter on had it's we up, need expect happened but to and to what would is depends a is what then relatively it might the be we even. if weather the winter it similar you category

Michael Lasser

your how sales which in think impacted of my you and you'll get And our into how factored much is second in quarter? the you the do first weather second the of quarter, back expectations do weather, question, follow-up the in specifically comp quarter, speaking that much the same-store think

Edward Stack

impacted to awful I recoup of really an don't we're in – the a in a Well, bit. change lot think going whole that the how a I it quarter. factor second much, know lot in us wouldn't We but

Michael Lasser

you so Thank much. Okay.

Operator

from ahead question America Ohmes comes of Bank your Merrill go Please question. Our from Robby next Lynch. with

Robert Ohmes

for Thanks Ed. quick of question a congrats great couple quarter. and Actually my questions, on a taking

just first, key as out you call athletic The drivers one of think that guys did? just for quarter, how didn't footwear the branded apparel curious and I the

Edward Stack

and business pleased We’re footwear apparel with business. our our

Robert Ohmes

stood that out category? And within that anything any

Edward Stack

that particular in Nothing us. surprised really

brands very did Adidas very well. private brand to do well. continues The Our

Nike I Under going had meeting in and think acceleration see with forward, we'll a yesterday. some we Armour

with and We direction going pleased going with are really the the be forward. content them going we're to

pleased pretty we’re all-in-all going what’s on So, with there.

Robert Ohmes

apples-to-apples, one rather a comps that And comps the basis get than the being about think with should sooner a Thanks. in we hunting other just roll going things electronics where going follow-up. pressure? you positive forward or we see are quick When on and later? start your to to and shifted on off Does back maybe we

Edward Stack

quarter. we the right Robby, be year. the maintained low-single flat. our – guidance will through based policy, business now of of it's going The to on the fourth challenged we've In most balance to difficult continue digits firearm of electronics the the really business, guided expect we through to continue to be hunt

we're change see So guidance that's do reasons we – big margin of that's really why We our in year and a pleased forward. don't the one we change. why this see raised going rates and we for the

Robert Ohmes

That's great. Thanks Ed. Congrats again.

Edward Stack

Thanks, Robby.

Operator

Gutman ahead from question next Simeon question. go your Our from Morgan Stanley. with comes Please

Simeon Gutman

Thanks. nice year. down EBIT guidance Good think is I morning prior for and dollars improvement. the had question the XX% My

looks the mid-teens. we on around if First it quarter X% was for down decently like guidance new have it a guidance the looks compare and the full-year, tough down that's like right mid-teens, it's

from trajectory. worse first Does even a quarter here So compares I little should want bit the question the quarter I guess every to be about just the the earlier get that easier? than clarify on mean though

Lee Belitsky

baked the to are think back a sticking year. first XX% was March. rest much from could we And we in results we the first the earnings we out through referring There’s we're off in additional of with issued in year-end improvements running – full-year not the little Well that a are this hadn't the kind we so I of we business as when year in At said year as in still, – the part but guidance ahead modified with quarter, the of long back guidance the be the the you November of we're then point, quarter. us that pleased bit for in down that the We're largely of for call. some back I improvement the earnings coming our think year. baking

Simeon Gutman

well us can some that mentioned the you biggest as investment as response, there year you're you're real and electronics and but Okay. contingency big don't And then abating? the that the part line line, benefit is dissipate mean just just tell on far much how that – and firearms, margin investments like my to the until as referred it probably Ed related investments was to the on as of your sounds comp Lee, making. XX% probably follow-up. the Does the getting headwind it that next that curve

Edward Stack

got invest. No, continuing significant We've important pick to we quarter. we’ve margin first some the in are – got up

later as invest capital to Our both year perspective. expense the expect throughout expenses the accelerate were continue in year well. well quarter from an controlled And very as and a helped the in well earnings to perspective get from we meaningful a that first in in business which we the should as the way

Simeon Gutman

then a less little getting that from just bit on you're weight the the And those margin lift categories line? sales being

Edward Stack

Yes.

certainly We rates. helping—it our is out merchandise separately, haven’t that it’s but margin broken helping

Lee Belitsky

balance will And we that something think that's of the continue throughout the year.

Edward Stack

Yes.

Simeon Gutman

Thanks, Great. Ed. Lee. Thanks,

Edward Stack

Thanks.

Operator

comes question from with Nagel next your ahead Oppenheimer. question. go Our from Brian Please

Brian Nagel

Hi, morning. taking question. Thanks Nice good quarter. my for

first maybe prior to less think So to activity. margins, mentioned a the question, But couple gross off couple regard follow-up with of promotional the I Ed you a a questions.

inventory So sector I been lines now have what any are there on activity the along a seeing inventory is, the or a within more – is had channel? described less kind we the to just was question comments of that lot those before Dick’s and promotional within of glut specific of the

Edward Stack

couple a things. of Brian, Well

about the cleaned cleaned inventory last been I talked think been the bit up that's of which so in we the has majority up. little call, a

– with inventories basis they've a of less competitors in less marketplace on been – they've their some from Also line. as the their more think the I promotional our the good of a inventory inventory, there's inventory in our us brands direct from gotten and down promotional activity got see out can been sales team our our in really it's as job has line as controlling up. from you done and we've were been less was very

helped margins that expect we drive So we've to and continue positive that, the year. through done it the balance of the

Brian Nagel

it. then you, sales. so higher for climbing follow-up different your And nicely continues Got my grow online to question, percent of to topic,

business has that think now or legacy of how gotten As the underlying versus getting we profitability bigger, sales channel business? the should the about

Lauren Hobart

growth. e-commerce it The improve here. we've as we improved and of will to continue in-house fixed profitability expenses even leverage further since the significantly able Lauren taken are with to we It’s has channel

the we're So of the significantly. pleased grow profitability very with it to and channel expect

Brian Nagel

Okay. you. Thank

Edward Stack

Brian. Thanks

Operator

Seth next go Credit with ahead Sigman comes Suisse. your Our question from question. Please from

Seth Sigman

first taking gross Obviously the Thanks for Great. expected. performance the question. My on is question better margin. was than

You contributed. about you promotions, talked and mix, other some may understand less I have the factors about talked of trying am to that

So around week give card gross also theory shift in an benefit as costs accounting about the margin the from any thinking to some you there? and gift to there in the opportunity then the change breakage was on of leverage

Lee Belitsky

week the a on was benefit from There shift margin gross well. small as

first clearance from which pretty week The quarter pretty heavy beginning of is us picked period margin and a February good May while of this up which for a is quarter. generally lost quarter we we

with bit And is a to the didn't little there a revenue impact margin. respect of So really benefit. change recognition, gross the in

Seth Sigman

about on basically think for then Got down clarify slightly I about you now positive? previously slightly talked the or the outlook, year we it. saying you gross the to think And as margin guidance

Edward Stack

slightly We margin, we think the year think will be be on will merchandise positive. it – it – think the for we

Lee Belitsky

fulfillment that will gross costs down Yes, we the the year. shipping and be overall margin somewhat expense including think for and still rent

Seth Sigman

that Can Okay. just nice private gains? this double-digits, I if is specifically look performance think is shelf in share speak the Apparel about through comp you that growth out we're brand to you how And see at the And business. coming up just obviously around And question then talked follow-up the trying quarter? figure my growth, business you. progress. to Thank incremental what's versus from you about then of

Edward Stack

we're won't of double-digits outpace with that We think majority we the on So as get it's specifically apparel talk the reasons, to expect trajectory pleased with. the of our brand we going business said won't we're what's the in it to we standpoint. brands that comp – for competitive company. from will and to kind private we But of continue better going continue doing

Seth Sigman

Thank you.

Operator

Our with Forbes Securities. Guggenheim next go question question. ahead comes your from Please from Steve

Steven Forbes

remarks How that significant think morning. more premium in brands across a that Are categories? in the on is continued space Good think that future space. changes you last about regarding getting right follow-up private product – themselves Maybe private the making one you mentioned decision strength you does allocation today? the CALIA prepared impact? in I brands. How the

So can some and expand provide color you that? on just

Edward Stack

drive performed the outperform did Hagen the brands. space that They continued get space additional needed continue in brand – to see as drive business, we will haven't Slazenger get space, has get other some our as additional premium They as continue and Well, we some to grow. brand well. that Gulf additional out CALIA's these and get to vendors of allocate additional continued private Apparel CALIA spaces. Walter to continue as to We'll will continue space. the so brands to these nearly

Steven Forbes

rollout a time here given is be there is evolving how out roll and it And kind to on strength fast determined the it over can you place of here? in were plan

Edward Stack

which next with we year. into year this want as is make space this year Well, plans we what set of the for will pretty to to we But allocation plan, as drive get there's a further do much business. we the basically executed year and for rollout continue this

Steven Forbes

of then rollout. initial a now follow-up we're two think year deck, regarding And the the just in premium footwear I

the So in touch to can relative right first stores average on they initial expectations, just really that those performing XX and how months how you in chain here comping just back looking on general? right how maturing footwear

Edward Stack

pleased with new the we majority premium evidenced stores. in build them decks very can going to that But not the continue get by we're as specific. Well, be to footwear we're of

Steven Forbes

you. Thank

Operator

Chris from ahead from question. go with Horvers JPMorgan. comes your question Please next Our

Christopher Horvers

in technical the weather question a some Trying Thanks, clod there. different ways. difficulties

businesses? Little from those the the fair terms You the would quarter and did the late that to outdoor offset have in League the say tailwinds some be tailwinds the spring headwinds other – in on Eagles role the headwinds bat of in

Edward Stack

Yes, would pretty fair. that's much I say

Christopher Horvers

on of And you seasonal UA you that pretty Okay. marketplace? the as see encouraging in overall can year? about Dick's mentioned of What's to market in then in I current do the could at you winter athletic next you least conversation clean comment cleaned differentiated time content the should might when and Do levels inventory be inventory the fully clearly exiting related mean think stores? your on still product or pipeline? with be expectation think you holiday in it for that's

Edward Stack

Well, but I the then it think few that more about. differentiated not differentiated from will marketplace will some kind it are be of that marketplace, some to us brands have other into a entire other of a the with the will there retailers But year. have in holiday, the is some the differentiated next depends majority And for product. of key season talking into going bit on who not going brands. be and we're differentiated granular we'll and that We're get product back-to-school into

outdoor we private Our an private launching brand will continues grow. brand from CALIA this we've that be brands standpoint. to continue drive, a got to year

we're Field good to an Stream product about continue feel that We standpoint. apparel out from & the putting

So about all-in-all, pretty business. feeling our good we're

Christopher Horvers

on quarter? incentive were just questions. compensation numerical the quick Any occupancy for what then was and the the deleverage some And sense what last headwinds

Lee Belitsky

point. specific those percentages this haven't at We disclosed

Christopher Horvers

much. very Thanks Understood.

Operator

question next go Matt your from Please Our Barclays. ahead question. from with McClintock comes

Matthew McClintock

doing drive figure online, are to have giving trying the And like the is, the the just seems label good of to store space. premium private similar? that question, up Steve's versus was what to better about but talk like following the online Yes, of then more you store business everyone. CALIA drive drive store in growth you're about label and giving physical label things ability doing if thinking rate space, a Hi. physical to by to penetration private I'm what Thanks. you are business morning, think Ed, doing on business your it in out the premium could what in wondering like private penetration trying label you private I

Edward Stack

can rates do we’re than on business. standpoint a now marketing it penetration think in lower that – online doing So to will the the that help a online ways the as are looking we grow help are this store bit that And what from and they we grow in-store at we're online. we continue right

Lauren Hobart

them just big is of actually penetrate mixed would I that have it’s do of well private add social Yes. CALIA strong those bag penetration have online well. some they there that our following, a as brands that one

Lee Belitsky

of opening more areas have higher we the programs building online. are the brands penetration generally point And lower price have where in online penetration

Matthew McClintock

for Perfect. Thank you much color. so that

Operator

Our next Please comes question. Mike with Deutsche ahead Baker your go from Bank. question from

Michael Baker

Hi.

first think percent the be it's your to than of – implies higher quarter of guidance wasn't it been shifts, XX%. earnings, again quite first The Any of it those should either? calendar XX%, bigger about the what versus been that the averages will it's the it highest XX% lost like I high be have you like year reason including than about XQ XX% never same really full-year your and calendar shift a XX.X%, less is why it when as was historically XXXX

Lee Belitsky

a To at we at the year. and look answer even begin it way. taken quarterly results to what balance just at I going our honest, didn't look it. we it we be is that feel the We've And to that of don't be way. look for couldn’t

Michael Baker

All right.

understand, first are beat guidance you from it by, also to the the by or guess quarter it Let way it you I’m I up better flowing I I trying bump seems some up bump if could. your – like me expectation in you perhaps did through just guess this margins? ask did merchandise

Lee Belitsky

forward. share internal have count expectations going other We than unchanged largely our

Michael Baker

of going similar you. helpful. calendar rate extra cetera. Thank et week, the when more the seems Understood. benefit in again follow-ups, it from adjusted That's shift, you Couple XXXX Okay. this the to you $X.XX tax impact a time have the XQ back lot largely

$X.XX So I in is, guess extra about is the line from plan that the with your question week?

Lee Belitsky

Yes.

Michael Baker

sports Okay. because I'm seem to a start not much – those Q&A so more call of fact two expect specifically up. to see recouping a the of sales? did earlier did One we why press this, Thank in here, you downplay you're in if expecting weather that as the wanted a a really you and you. to not yet reconcile you pick but clarification session the trying delayed outdoor wouldn't those you delay ideas of to out release and delay the in answer press the in release just maybe written

Edward Stack

they're the don't to going – use going there kind make Team come season, of getting timing We to since or – Sports not that where sure of just that upgrade we to was know the to that they're buy toward watersports, back toward that. started, was or We're some it's so change. late of equipment the don't the sports paddle end going know not – getting they're of a about the more if

Michael Baker

haven't put that your because you guidance guidance the any So in obviously unchanged. of is

Okay, understood. Thank you.

Edward Stack

Correct.

Operator

Poser Please Our question. Sam ahead next your with Susquehanna. from from go question comes

Sam Poser

couple your by Number I Thank you for one, that touched digital sort overall I e-commerce got omni-channel would now? things. a e-commerce, my regard is questions. right versus of your business numbers? taking as guess I've your pure of in you're much reporting business mean mean how you I being the

Edward Stack

not question. I'm I the sure understand

Lauren Hobart

beyond researching for website just people big, Do and using how mean our that you question? is the that purchasing the

Sam Poser

see the digital part – with much having to into you mobile are on mean and experience? app mobile interaction they're coming your apps are the able the how of I then the omni-channel the they're with like consumers looking are store,

Edward Stack

the significant or online business What our I what site. is, because the but that peoples purchased well I'm and are about, very of site, used, most app of mean it's done to very talk they coming specifically very significant. part app our is is going decision start to

Sam Poser

Two your loyalty can tracking Are store, near to kind of to you you kind in any they're that like saying going adding other might when they're the then things. be of you neighborhood thing? while talk geo in customers this specifically store like a

Lauren Hobart

think significantly app drive Yes, more opportunity that's some as we we do an capabilities. untapped that have into further. the we can develop We

Sam Poser

lastly, down same same Thank the on that clarify is this the comp last compare year was versus based you. to And correct? was X.X% weeks Lee week-to-week weeks year just

Lee Belitsky

No.

Sam Poser

ending down whatever QX year weeks ending XX the X.X%. the – ending was the this week – day so – it last is of Or fiscal

Lee Belitsky

X.X%.

Sam Poser

X.X% excuse me.

Lee Belitsky

X.X%. was down was Yes. Shifted comparable X.X%, unshifted weeks calendar down

Sam Poser

thank So on very continued you success. much

Edward Stack

Thank you.

Operator

comes Peter your ahead go next Please Baird. question from with Our from Benedict question.

Peter Benedict

taking in chain area the doing enhance on what more maybe Could what's efficiency? curious a little of speed bit on guys, a you for and supply thanks elaborate Hey you're Just question. the more to little on there? going detail

Edward Stack

e-commerce New operational Sure. the in be year. our we northeast, will in next building out e-commerce facility York. Right fulfillment now facility Upstate That our are

out of Kentucky. that centralized we think fulfillment us get fulfilling the a customer to I from everything Louisville, perspective. will Currently are closer

centralized our to of at fulfillment. fulfillment in addition store All our Louisville

that our center the we so perspective stores, got as serviced We're be we northeast hit a also we next from can the Kentucky well. from beginning York So those fulfillment work and New to of believe a will really Once as believe execution that better we on out West centralized center, within that Louisville, on we've that. should central at Coast all our center for customers, the improve centralized do fulfillment working they’re look a day of from fulfillment again, year facility well. that

both those So at facilities of for launch we're next looking year.

Peter Benedict

That's launch next helpful. well would West The as Coast year?

Edward Stack

Yes.

Peter Benedict

Okay. and cadence maybe that out? initial year to of you the those some things, kind expenses capacity leverage a they works? how because launch get start Is of types of do margin up things like and And when then just headwind you start that

Edward Stack

We haven't regional model that's we centers. typically what built out, see it when but fulfillment we

through for a the year, those all yet. So on worked expectation math that's haven’t probably next we reasonable but

Peter Benedict

right. All

Now could understood. holiday? the Is time something for broad we that we base store test, of curious Thank expansion how and that? more just your you. could in see see that when broadly across The purpose is an Locker

Lauren Hobart

of very it. So just a test small it's now stores and more few anything operational a to right than make could do an sure that we it's test else

will in part of is how of next see terms economic the the innovation actually into Our of important this versus decision make this be getting investment. we inventory so front that a Locker to the cycle positive the store,

improvements a stores. So are to holiday, will rollout to do I make by think and continue we that experience, not the but doing in [indiscernible] see you’ll full we many

Peter Benedict

income, line was Okay. other just show question the numbers Thank I then guess quarter income an this one tends but that you. on to And expense. it last expense

think we just that about should if changing So curious Thank forward? and anything there how going there's you.

Edward Stack

investments the Yes, of the number. has goes income to that if long-term positive if up down market through to the will and that with and their valuation stock that primarily a compensation go down do value goes has market flow stock will number be

Peter Benedict

Okay. guys. Thanks much so

Operator

your ahead question Saad with Omar Our from Please question. comes from go ISI. next Evercore

Omar Saad

was you're customers policy, my price proposition? us advantage a hoping of on update it is that for matching Good bit lot your going that more Thank in question. guys experience maybe I the incorporated you our give value seeing taking morning. and you've to customer you an could as or non-event what taking of of

Lauren Hobart

has price of part if big actually a core the go So guarantee become our you into of marketing best communications our one very stores.

getting customer a not over prices. over been assuring provides were stress we that would customers assurance a it of to before is that all a people matter the has Now been without very doing marketing a and we dilutive that the vehicle be find level the our store the very matching more lot the go see front were margin they it credit a it's doors. to price. has with for They of leave best hurting some you'll it It of margin. have that creating better anything the price all it's eliminated, without the transaction the because experience. taking lot are that's to than It's been positive of has case been store The and fact that don't

Omar Saad

just policy? it change. a quick of of Maybe the positive more gun decision take policy of been could a passionate just and helpful know to kind effects that there a you is but the little for That's effects headwind your I little those Thanks. on then be kind any will bit expand follow-up. of one consumers, bit firearm

Edward Stack

a of us because shop there they're more so Well going of to shopping number who started been or people us have there's has, the policy.

So us speak there’s been definitely of joined I who the guess of so people overall I would have to because benefit say policy. – some it’s

Omar Saad

Ed. Thanks, luck, guys. Good

Edward Stack

Thank you.

Lee Belitsky

you. Thank

Operator

your Camilo question. with Canaccord comes next Genuity. Our ahead question from go Please from Lyon

Camilo Lyon

Good wondering well that doing brand if to square that just expand clearly also you Skin. with Second morning. very give be you’re doing to footage us to you continue Ed, on was Thanks. well. just update an CALIA I could seems

for you and think that I said some you would redesign engage to brand this year. reformatting that

Edward Stack

Right.

Camilo Lyon

also with brand social CALIA or that greater awareness? to like an was you you And you or feel if need to athlete either with did drive influence associate wondering that

Edward Stack

on we at that? reconceptualize have who those, will do looking and toward sometime we're want on to be? we is XXXX mistakes talked that that launched XXXX an go stand the we we and about to probably Second influence What or mistakes some end all be don't How again. that. of made make But where that beginning doing is of those the would would want about Skin we've being line We

we're So we time same way it to do did we sure our and with CALIA. going take the make right as

Camilo Lyon

for brands your then allocating the frequently or feel this up your I next increasing, what footage does you better to CALIA are it. label if on square private do performing, decreased some plan views confirm, come said year? as label change? just And other of typically you start how sense the year? brands set how for a are brands? - for you set you planograms wanted those point to that private and like that think So discussion Does think that increased And again Got floor I that those but to at just allocation to space for are to

Edward Stack

more clear make number you'll clear, We a in in of – stores got time out the in going well. year. issue. that last front that which the in year we've seasonally we test try see outerwear the We're front be for stores will see We changes worked as the bring did front test of few to there's will. into any are store of our in where can if this front-end we we that changes want pads more – this a these an store, putting relevant you There be a in couple Well, very the year. to some of

significant we've done you but and want far some see changes, significantly so anything in will to anything don't year see planned you of the other front have than we've got store. the this So what what planned

Camilo Lyon

season. and in being the just in category. label about think this how far brand Okay, the coming best that to solution that outerwear thinking impact great. too brand private space, presumably this this winter And existing option better, is lastly, merchandize about your you so you for you and a you said have so does good fall, From that if perspective, XXXX impact mention have did then should of label are that in having good, the been private

on main that So you of square your level or pricing. exit good how back that brands allocation the to pulling that the footage different occupied something category of

Edward Stack

point clear some we're brand outdoor think in better in some and I about best that would good in that vendor. good to really level be and This the think I talking more impact the really kind space will look – the the of hadn’t brands we past will in is level and Well, that of put level, with We level. we there be best product this in this going isn't its covered the at be white going cover how major to the to plan price brand. better better and opening we any

Camilo Lyon

comment luck. Good the Thanks Right. for here.

Edward Stack

Thank Thanks. you.

Operator

question. question RBC. Our from from ahead comes go next Ciccarelli your Scot with Please

Beth Reid

Hey, Reid on good for morning. It’s Beth Scot.

March? quarter wondering February it compared wondering in on the challenge from quarter weather you if Just and the presume in throughout But just most a comment business how earlier can was perspective. of the to of pace the April

Edward Stack

unshifted how getting would were comps granular don't were We what laid our a what for the basis and were more with quarter-by-quarter of in what out about the quarter, on happen shifted we've on our we both the but talk kind a basis. quarter earnings

Beth Reid

in your guidance it And just then still you more range. seems store improvement In tracking your one load and single-digit like from just the Okay. negative the here? any have baked in comps

Edward Stack

We’ve laid year. the exactly what we the out done guidance had for

Beth Reid

Thank you.

Edward Stack

Thanks.

Operator

with from from Jim question. Our Please ahead your comes go next question Stifel. Duffy

James Duffy

morning. Thanks. Good

the guys traffic and did the positive I you in in headwind out inventories stabilization you the variables transactions? see or forward are of So presume visibility actually transaction trends As was which ticket ticket look clean, some positive going any help quarter? as the inflection should or really I

Edward Stack

we the got mitigate – out of through part don't think electronics and the the way year. is right we we've are business headwinds those laid it that in Well, we in of as going said to of kind firearms the this balance some of kind now the and business it

the balance this they're to us with of year. So be for going

we So hope for some improvement.

anything haven’t We baked in.

James Duffy

question to the the And impact larger business? the License of a leagues? of you for on Any the Okay. then thoughts fanatics bigger of some role in I have share Sports you Ed, on had

Edward Stack

how Now plays it'll to see this out. be interesting

Our pleased of as We've License year. business has how this whole out into through the continued and plays and to thing be been balance it work we this the pretty good. we'll next with year see through

James Duffy

And the then last e-commerce just shift impact one on Lee, quickly the rate? growth

Lee Belitsky

and shift meaningful it’s the No unshifted. same impact, about

James Duffy

you, Thank good. guys. Very

Edward Stack

Thanks.

Operator

question. Please Cowen. Our next with question your go Kernan comes from from John ahead

John Kernan

my for good Hey, on Thanks morning. question. progress. Congrats taking the

Edward Stack

you. Thank

John Kernan

business a line, trend X% on? year Just wanted – follow-up in since the how that as in in to the drove goes then were wondering just talk go first the business, quarter, categories is And was to I it the could think you SG&A the the up to SG&A think my dollars growth the much e-commerce reported year-over-year that I improvement just XXXX. best you've

quarter? little a change bit you. the from fourth there Thank in the big trend on on that expand just So

Edward Stack

at Well, we again with we're rest not of look respect to year. how the SG&A, I mean the changing

maintaining balance sales well. around the effectively we're and SG&A the expense So year as our of guidance, margin

into that. business, baked e-commerce to retain to the take…? want said models guys you you With respect you whatever So your Lauren can

Lee Belitsky

standpoint. part what happening say mirrors happening so a within would stores, in the range for the see kind online what's of what happened most kind of The the you in is tolerance e-commerce – from stores an business you

Lauren Hobart

very in the in apparel was year, and quarter. footwear success with had athletic Yes. up truing business all We’ve and the that online strong

Edward Stack

I this think point. the do than at we’ve stores online obviously we got better business in

we've that better last this of year a driven had metrics I by that really across think we year it's number track. versus execution

excited So we're about that. really

John Kernan

you. Thank Great.

Operator

Wells question. Nikic Tom from comes your question with from next Fargo. Our Please go ahead

Tom Nikic

my morning everyone. taking good Thanks for question. Hey,

year? more had Just of then at I And QX. I revolver, a it then was just I balance wondering secondly, think the end of couple the sort of on I items, anytime think see that. can drove quick borrowed sheet you what have you said inventories you explicitly levels the just Thanks. basically you and expect expect of earlier saying you sort that kind of were down, were continue at year-over-year remainder – the down up you that of are that to going sales forward? be Is to inventory

Edward Stack

from bunch but piece We and is didn't will And then we we down, we back kind continue We stock. keep specifically haven’t the buyback, of sales of really said that. of – guided say We bought inventory standpoint a that. sales. – can we to the think the part a cash said a we as big

Lee Belitsky

calendar think paid that issues paid. when this shift around back couple timing we the got The year. I last rent buying end pay of quarter of hadn't year the on got monthly The We’ve been before a there's rent rent. shares the and

shift. there are just So with associated some calendar things timing

Tom Nikic

for Best luck Thanks right. All year. clarification. Thanks. rest the the to of the of

Operator

from Patrick from And gentlemen, comes today question. McKeever Please Partners. last ahead with and MKM go ladies our your question

Patrick McKeever

sales you've guess was I year I then selling some But you. morning, on guess, and didn't the Thank quantify policy in of the Good from sales this as firearm there your well. changes thing impact its everyone. announcement that I you. changes NSSF you know you with had assortment. relationship the and Mossberg the discontinue, the also negative made And in since earlier that

your thinking those mean and any other of additional relationships the And with year? you how the So do then for I is originally manufacturers? of business incrementally fallout your from manufacturers to what firearms my within that negative some you firearms are question any area had about other you that were are have with

Edward Stack

want, a we that have do sure relationship sell weren’t sell to that did to the assortment. with direct still but going We're on that. the manufacturers they best And firearms If indicate that, Well, that product to do product going buy we a distributor right not assortment, from in the our we're now. ability basis. to don't we we have fit can they it that the Mossberg have into

show. far expelling go primarily to They with the the Federation us – lot National as would shot shot that We have Shooting As Sports them. didn't to a the show. do whole run we

we show a It's the So not of now. go to really don't shot that big deal.

Patrick McKeever

Right.

is through weather, to the How looking perhaps just and then how your look you the of that expect trending? of hunting would year? balance And business also impact that adjusting at firearms some Okay. for the excluding from

Edward Stack

it's Well had what based of business the reported, business last the as to is the the time manufacturers you – over continue challenging last know been years. very they've years, some hunt several a difficult of on for have couple a going

be continue to going and that guidance is buying all that same Our buying balance to hunt that and who business because category going of boots is hunting we consumer the be hunting and continue the through our challenged is to think apparel is challenged baked of firearms into the year. whole is to

Patrick McKeever

Okay.

Edward Stack

I into baked the guidance. it's And all said like

Patrick McKeever

firearms Dick's and within then you just And longer-term? hunt committed I to the are stores, mean how

Edward Stack

yet to to to want marketing yet, Well dollars depends be do margin that will do to other of some that the think us. one they plays lot be we the we but that business on know decide have The expenses things some is it’s and challenged, categories, out. together. accretive determined. to manufacturers as business a to we that number reallocate continue is be that continue be as thing There's how reallocate to it that determined we are How a of things that

Patrick McKeever

Okay. Thanks, Ed.

Edward Stack

Sure. Thanks. End of Q&A

Operator

gentlemen, I'd any time and closing conference back remarks. Ed And we'll Mr. for call turn over the session. today's conclude at ladies question-and-answer Stack this to like to

Edward Stack

to I would joining Thank like look and to we'll for with talking second thank on our results. quarter forward to everyone call everyone you. earnings our us

Operator

that attending conclude you thank gentlemen, and will today's do call. Ladies presentation. We today's conference for

now lines. your disconnect You may

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