DICK'S Sporting Goods (DKS) 26 Nov 192019 Q3 Earnings call transcript

Company Profile

Participants

Nate Gilch	Director, Investor Relations
Ed Stack	Chairman and Chief Executive Officer
Lauren Hobart	President
Lee Belitsky	Chief Financial Officer
Robbie Ohmes	Bank of America/Merrill Lynch
Michael Lasser	UBS
Simeon Gutman	Morgan Stanley
Christopher Horvers	JPMorgan
Peter Benedict	Baird
Michael Baker	Nomura Bank
Seth Sigman	Credit Suisse
Paul Lejuez	Citigroup
Joe Feldman	Telsey Advisory Group
Warren Cheng	Evercore ISI
Adrienne Yih	Barclays
Jim Duffy	Stifel
Brian Nagel	Oppenheimer
Tom Nikic	Wells Fargo
Gustavo Gonzalez	RBC Capital Markets
Chris Svezia	Wedbush
Matt McClintock	Raymond James

Call transcript

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Operator

Good morning and welcome to the DICK’S Sporting Goods Third Quarter Earnings Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Nate Gilch, Director of Investor Relations. Please go ahead.

Nate Gilch

thank XXXX joining results. and our to everyone quarter third morning, you us for discuss Good President; our On our Executive our Chairman call and Lee today’s will Chief Officer; be Lauren Financial Officer. Chief Ed Stack, and Belitsky, Hobart,

archived today’s located Relations for XX be investors.dicks.com our months. Investor A playback will in of approximately call website, at

actual As XXXX to and our sales are subject to outlook various could we and results earnings, be that forward-looking making from will reminder, materially for a statements, our uncertainties risks these including differ which cause statements.

during considered information. Any should discussions obligation no conjunction statements the in cautionary or Annual such any this statements update filings Form to made our our release be SEC, these call. factor in risk We on forward-looking with last statements our and Report and assume cautionary of including with earnings XX-K, in statements

our will profit diluted earnings per be we expenses, SG&A Today, a operating discussing quarter and basis. on third share XXXX’s non-GAAP

be is the helpful financial period relative because these also to this prior no last items non-GAAP We non-GAAP were period. the find the during We excluded performance measures Investor third comparable to financial Company’s refer measures comparison believe to from there any Please the today’s evaluate Relations website of non-GAAP call. quarter our reconciliation year. will financial comparing prior to GAAP in measures to the referenced

fourth publish earnings on Eastern for we XXXX your March to subsequent with tentatively our release quarter XXXX XX:XX call our finally, before And future a.m. purposes, market XX, scheduling earnings Time. planning at the opens are

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

Ed Stack

everyone. morning, Good Nate. Thanks,

the and in same-store strong delivered perspectives. this third profitability earlier morning, a a announced we X% quarter from sales. very both sales As increase consolidated We had

over non-GAAP quarter year. increase last our of Additionally, XX% earnings per represents share the $X.XX diluted third

ticket both saw supported strategies of broad-based and increases hardlines, each apparel accelerate. our across categories in comps footwear. key comp as well across were strong continue transactions, as by are as and our and growth our growth working investments average We of sales a primary and Our business three to

mortar and promotions. and comp positively drove sales brick Our to double-digit stores while e-commerce continue reducing we

enter same-store full earnings remain the year. enthusiastic and and very guidance season, consolidated third our year are business the we raising sales time As for about holiday we this our

As inventory and inventory prior investments discussed we’ve we’ve previously, year were categories. levels too our growth key planned making running strategic into lean been therefore

compared This period in quarter, increasing XX% the the resulted last at inventory to end same our of year. the third

assortments driving have key continued Our respond broader meaningfully our level enthusiast to and comp to athletes gains positive product in-stock of well on positions improved categories.

Our margin inventory well-positioned healthy XX importantly quarter increased merchandise business. and the remains basis and points clean third during our reflecting a rate

the of continue our results be We to pleased efforts. space with optimization

We space. have reallocated

better product to align have adapted We the growing market. and of categories floor our offerings each space with needs reallocated

As strategic continuing Stream updates part exited we of eight hunt is our we additional of & review of the our quarter, when Field This broader strategic review locations. provide third available. business, will our and during

we ensuring to while will enthusiasts. all on to from meeting needs athletes we are beginner optimize our an with key continue emphasis ahead, assortment Looking the items of

Our about product the relationships partners have with our never into next and year. been strategic we are pipeline stronger brand encouraged

a key Hagen including assortment. DSG differentiation Our private brands strength Design Alpine CALIA, and and our Walter remain of within source

the end toward become the by the largest private DSG We pleased particularly with our been DSG next which year. believe end quarter. of have will second brand, We we launched of brand

season. Goods, hard enthusiastic and DICK'S our their and during future our the to about performance remain efforts In work teammates strong this third Sporting of to thank the very for holiday commitment of upcoming closing, business. am our results like I made their possible quarter I'd pleased all with which and for

Lauren. would I over now to like call to turn the

Lauren Hobart

I everyone. best by and enthusiasm morning, quarter. good building experiences Ed emphasizing omni-channel our my during the as on We in and want Ed, strong drove results working our one third for remain the discussed, of you, shared to focused are and investments and retail business. start Thank strategies

will in our exciting made the marketing stores and fulfillment our progress updates priorities program. our also e-commerce This morning provide and will I Matter and we've Sports on review capabilities our I

engage I standards our extensive every use new time, the every this their experience. about the power focused couldn't teams shopping launched First, of hassle-free across on a our execute opinion create to Earlier we to very the basics be how building service and excitement confidence around more momentum excited training stores. our year should create and athlete

on a flywheel This, the cycle. stronger moving. virtuous and improved focus very a It in-stock our with along combined performance, and with marketing is has results real recognition great of positions

Turning website store to us channels. consumers’ our We and meet e-commerce, athletes more to faster features providing we through order a new to experience blending a stronger experience are allow of deliver responsive quickly new to that functionality, online expectations. better will also web in better the and delivery our digital ever-changing enhanced launched recently

as fulfillment operated new been quarter opening with the New and robotics pleased teammates addition, on-budget. including dedicated our first quite systems In of in was facility, centers on-time a our our e-commerce We've this center. the new and DICK’S great earlier York integrations, our as e-commerce the two success fulfillment operations opening well to-date

new have successfully one ways Moreover, expanded important with along store POPUS. to delivery the of centers channels times digital and is strategic blend our our FedEx delivery direct-to-consumer reduced These our athletes. continue we capacity most with and through partnership to our fulfillment have new

orders store in outpacing we saw During sales the growth double-digit online of the the significantly athletes e-commerce in picked business. our overall and our ordered in up quarter to we continued growth see number

events late VIP marketing, and launches, scorecard in early access the many and member-only enhancements program ways Gold announce an to athletes. in quarter benefits pleased that our more. top-tier and to earn I launched Gold, sales our targeting am Scorecard we perks Next points loyalty to to include product including

engagement loyal consumers. confident most We drive level this are enthusiastic and of our program are about deeper with that will

addition our about quite holiday Unwrap the multichannel Magic excited Sports. campaign titled of In we're

This part the of TV our in As showcases we New to way. engaging DICK'S magic very first unique store The brings spot Kid. the called our and of this, a life released animated stores and spot

Lastly, our to with Sporting highlighted across vulnerable are fund-raising a Foundation during campaign called DICK'S partnership million of provide the to it back-to-school used country where the sports athletes of rate. Whom the support disappearing pledge Concern. we for most sports one communities May access XXXX, launched in in Goods and an alarming some young This by additional campaign at To

our tremendous donations than XXX%. a I more am has success increase in been to campaign announce pleased generating of an

against our we execute we are the continue enthusiastic our position. as our remain strategic drive and to strengthen that and will priorities, our about marketplace leadership in closing, investments differentiation business In optimistic

I over Lee review will to results call the now financial outlook and to our in detail. turn more

Lee Belitsky

morning, Thank you, good Lauren, and everyone.

X.X% a of increase billion. X% sales results. and quarter increase a in approximately a increased to brief review same-store with third Consolidated in sales average increased ticket. X.X% transactions Consolidated our begin Let's $X.XX driven by X.X%

a we strength store in to brick-and-mortar in accelerating return positive quarter, Following comps stores. the saw our second an

promotions. XX%, our strong e-commerce results were reduced we while increasing also Our with sales e-commerce

in online As the a to business increased XX% net total percent to compared our sales, year. same of period last XX%,

able apparel each comp with three we of continued across we to categories and During to of declines the primary growth other business meaningful across offset but hardlines delivered our more were negatively, these categories. footwear our as and quarter, than growth hunt expected,

overall the positively additional during at second and these end the comped contributed stores of quarter, stores in decline in in the of category hunt with While to rest removal an the of line the XXX chain. the quarter the the

the pleased Ed hunt our reallocation our quite mentioned, strategic We and efforts with continue business space results review be to of continuing. the of is as

of net a to the XXX the year. or basis points. merchandise XX.XX% margin rate $XXX.X driven period basis and expansion XX XX by points of This leverage third improvement Gross sales, same compared point profit was occupancy of in on was basis last million quarter improvement costs

The margin fewer favorable a primarily by was promotions. merchandise expansion mix merchandise driven and

two expected, of costs dedicated offset startup e-commerce partially the fulfillment associated by this opening with was As centers. our new

of higher up compensation strong quarter Non-GAAP XXX due sales, deleverage net or period driven This $XXX.X basis results. incentive year. to a points our SG&A were last third was primarily the from by expenses XX.XX% same expenses million

strong achieve up sales and track million $XX.X objective of non-GAAP gross In third our majority $XX profit million quarter. $X.X points Driven operating helped from XXXX by sales, basis profit our was period offset net expenses. addition, in remain year. productivity margin, million X.XX% These last the XX of of the we eliminating approximately same savings to of the on our investments or or

increasing overall offset in earnings. deferred and on investment is million expense to $X markets quarter, the substantially this the related plan during totaled all in the SG&A has is period higher year fully income from same expense value in resulting impact the million no $X.X and income compensation compared of change this last to quarter equity Other

our total, we included million last diluted In technology subsidiaries, GAAP-basis, one-time of year-over-year diluted earnings of our per non-GAAP Sombrero earnings year, two share a quarter $X.XX which announced Blue On share a earnings per previously diluted share $X.XX. of represents increase. $X.XX, pre-tax Affinity third a sale compared Sports. delivered the per XX% were This and to gain $XX.X on

non-cash million as one-time, & also an asset additional the charge well attributable locations, of $X.X exit as a pre-tax Field pre-tax Stream million This eight includes to $X.X impairment.

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

Now period our we to the planned moving same inventory, inventory levels quarter, XX% last in compared year. the to as increased

inventory been discussed, categories. Ed investments lean were levels therefore and strategic As making our prior key running too to support growth we've year

well-positioned to inventory of at the we quarter. similar and end and our is by ahead, inventory expect rate the a Looking fourth clean our increase

approximately allocation, quarterly and to in $XX our third quarter we paid Turning were $XX expenditures capital million million net dividends. capital

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

shareholders During we've and dividends. to repurchases trailing through $XXX million the share returned quarters, four quarterly over

billion our credit activities operations have programs. from and $X.X remaining our we under facility These cash through and funded approximately borrowings repurchase under revolving share were

and facility. facility million quarter and outstanding outstanding on at $XX $X.X ended million last million the year. third quarter the the $XXX end of This with credit compares with billion We revolving on our third $XXX cash equivalents of credit our cash approximately revolving

fiscal and earnings. Now let me outlook move for to our XXXX sales

by full our X.X% our increase full sales positive. our are consolidated raising First, low-single-digit guidance. comp third strong sales of we as compared sales, of quarter expect prior year to result to We X%, expectation to now year same-store

share range are of $X.XX, on non-GAAP to to compared we a earnings a our raising which of $X.XX outlook prior to basis. $X.XX, full our to per year Additionally, GAAP diluted $X.XX outlook was

based on tariffs that new an guidance are in impact this expected later outstanding million earnings effect, into the tariffs diluted all to as estimated XX slated from updated year. any effect includes currently Our shares and well is average as go

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

Operator

Instructions] [Operator

Our today from first Bank go Robbie with ahead. question comes Please Ohmes America. of

Robbie Ohmes

Hi. guys. great nitpick. want to Good don't a I quarter. have congrats morning say to I on

Ed Stack

Thanks, Robbie.

Robbie Ohmes

I You Ed. want are - Thank nitpick, mean Yes, of welcome couple to don't I questions. you. a but to don't

very XX%. that the question. less a you We in First promotional. the little more That's being you was successful first leave also then, e-commerce up on had the on e-commerce on Yeezy Was color my versus promotions side? less launch? stores? only Or fewer margin. the that promotional And you the mostly give being Can commented helping guys gross know

Ed Stack

I think but of them. there three take them Robbie, in there like, was we'll

by the design. an e-commerce than we've were from promotional we up XX%, being past in much been So, standpoint less the e-com

we been we in something had online also increase some ship the are been by in less the from in, home, we because felt we to it in-stock had order stock, than driven was a their better them, inventory it We that things not in we been for past - which really customer of we are XX% that's do the much than appropriate. comes

and did in-store we far drive that. that helped online as promotions, the And as less promotions

very we're with the pleased the So pleased with very business.

Robbie Ohmes

I But pointed XX% think And then, is guys X% out. for to quarter, up you implied somewhere I'll fourth – as the X% in last inventory the and comps range. the The question for just so let your is my quarter, guidance you fourth go. the

expectation we color things. can Yeezy fourth of conservative couple selling that more a Should expect the days? from you us be is give for would of that Nike. And less maybe Any or great. also, A or even you launches quarter would things view as

Ed Stack

quarter to on It's appropriate trying there on of - things second is about. our be an conservative. two third based the kind was that things our there question relatively Robbie, are some what happening. quarter of But based are But and was. realistic we're

Our business is weather. dependent upon

cold our sure play winter, business less cold to weather we're to not helps outerwear business days Christmas, have skis really that's that reality. our that’s Thanksgiving we're what our be of we get you out. if not a how trying that's to a drive But between And So - and in going with will. we're if trying six and ahead

Robbie Ohmes

And just in on thoughts on in then, and helped quarter and like launch third and the that that the fourth the Yeezy quarter further much how beyond. launches

Ed Stack

it results. it moved for helpful. really We we was Yeezy But a we a helpful. lot. was time were first Well, – It the pleased very the didn't we them needle two of had with the and definitely launch and had

and the in how group And liquidated what fourth quickly we handled it. Yeezy pleased and was happens the Adidas team with and think how see I the quarter we'll it very we

Robbie Ohmes

fantastic. again congrats. Thanks Alright, and

Ed Stack

Thanks Robbie.

Operator

ahead. UBS. Please with question next The Lasser from is go Michael

Michael Lasser

Good lot for morning. Thanks question. my taking a

margin be to runrate on to this a operating year. going you're have X.X% X%, So

look sustainable runrate to think that you'll margin years, that and should generate over next do few you over consistent modeling? couple As next we per years? Or a the year is the be modest level be out of you able expansion

Lee Belitsky

this about operating perspective. going the guidance ready we this ready excited We're forward. I the the not right - sales year. have at the excited on guidance margin about point, going But next of momentum we're to business momentum at now, an are year give Michael to provide trajectory point from we into next not

Michael Lasser

anything this bid Okay. staying Is away that from that recently? continuing there you've been you trajectory on would

Ed Stack

any going how to of so we're year we've into beyond. providing this into done public, far very - guidance year we've But But can’t getting into business what I type which been of going next our we're kind about the question. with with excited guidance year. into we're We going really get consistent not we've done Michael, provide forward. or anything pleased since appreciate next we

next quarter business. provide anticipated information to next our lay year. on we happy for remain results be the enthusiastic that year’s that which our will pretty will have We out March fourth we about call in we But -

Michael Lasser

question follow-up same-store is quarter. absolute My It in stacks. on your nicely the Understood. an accelerated basis the on on sales growth

dissect size inventory, you how contributing up time year? As weather, you that factors things you look back changed and model more to implemented that do various with acceleration, the this operating the the like, earlier

contributed as other merchandising that factor like any might And then, have well?

Ed Stack

But, made, service say, comment we silver let really would a the kind It there I'll those is on what Lauren the standpoint the from of a think, I strategic of was service bullet. standards. investments raising not some a components this. of operations group we planned of did what I service combination did from inventory

was in the marketing Our quarter really terrific. third

our remain of silver a think about bullet, combination I I all of which so optimistic And a is was So, them. it is not we why think business. there

Lauren Hobart

out Yes. the coming right contributing now, are they great focus do positivity athletes in And turning I sell. are on flywheel a breeds the in that is momentum. I would There our elements and echo, those that who all to have product think greater to success momentum of the is and storage

on all things So, all just are cylinders. firing

Michael Lasser

Great. for and Have holiday a all great information. thanks the

Ed Stack

Michael. you, Thank

Lee Belitsky

Michael. you, Thank

Lauren Hobart

Thank you, Michael.

Operator

The from next Simeon Gutman Morgan me. go is with Stanley. Excuse Please ahead. question

Simeon Gutman

Good morning Thanks. last follow-up A good and quick on question. quarter. everyone the

your - First had I to think on talk departments widened about relative which considerably. guidance your talk quarter, this spread I know your of your or outperformance Can so, categories. performed you relative all you to strength the of – internal about plan? in plans the best - you've Can

Ed Stack

were business before. and changes hardlines, continued made I over to well that level The footwear. to very to going sure our pleased I apparel granularity. Well, and you am But can tell get of baseball the do we accelerate we're year across we really not to

private Our very driven Nike apparel by and business our brands did well.

because footwear Our Women's Kid’s again business good. Men's board kind very was The It's great. really great. business across Apparel really stores. merchandising was team, our at apparel look categories business our the very the was getting was great. into team, is of operations a team, of team - our product the our logistics those silver in one difficult, marketing bullet team to

team have a we time. cylinders right job all team and they're believe very best really I on great the kind of hitting a best - - had And company long that in doing management the now. whole in we've today The just

Simeon Gutman

question at this way for through EBIT inflection another margin of And business - to looking look guess the at it I is investments.

middle So, but year. you Are big we as the of while. Ed, there could is in know starting we're next game? some Where I that part early the for innings to in it's place coming, know if as share reach inning been they investments by transformation? e-commerce a don't which far in. should I innings are be we Fulfillment,

Ed Stack

that, continue e-commerce couple and I on in before would technology move theme would we've space. investments the little I throughout. of to expect business. be investment we're heavy This be continue investing fulfillment heavy around they may expect that years we that year of But a were website kind the in our got our bit. and to us continues building out to a to capabilities, the A

Simeon Gutman

Okay. holiday. Happy Fair enough.

Ed Stack

too. you Okay,

Lauren Hobart

Thank you.

Operator

Horvers question is JPMorgan go Christopher next with The please ahead. from

Christopher Horvers

Thanks. weather in month Good out? your given other of how Did the very out curious, that September? morning. did September. do weather in some And impressive have quarter. demand in third How you hurt recaptured on you the was the end retailers Or talked the October of business? I by think you do about think headwinds played the the you played performance quarter

Ed Stack

have business a see some a we real as weather negative or think this may business. for a our others, had but our didn't impact positive really on I weather don't year. with It

Christopher Horvers

fourth raising update. third well, quarter maybe the it in you're raising then, and you're And seems share clarify, be and year the it. the count the so quarter, Got for to like,

that expectations intact, So is are XQ your right? existing

the look you margin, very strong here merchandise in at as performance XQ. then, And

You one two actually and year “easy comparison”. have

you how those up So in the fourth again? merch do are to margins thinking the And about be you quarter? expect

Ed Stack

have shifts. have of And the this it Christmas. This guided been and calendar fourth is calendar depends. six is kind We hate shift. a less difficult between calendar our always on expectations Thanksgiving quarter all the with days year. what based And worst shift Retailers

sales depending but that we're margins know. timeframe never our you be, do how so, on optimistic, which will And between

carry. it that weather our business of cold how weather And an is part rates we on margin important that of affects merchandise

a not last we're So for get we we're December optimistic. really weather year. did looking cautiously which And in cold bit little of

Christopher Horvers

And last Lauren. is my then it. for Got question

a On you centers and the two e-commerce new you you've that made. starting other side, now these given promise direct wanted customer? customer? Are to exceed. down deliver improvements that had date the promise to number you that fulfillment a technology you days to Previously, had that down to say date you can you the the to of narrow starting the Are product a narrow you’d

Lauren Hobart

number of the Yes days we already year. this have narrowed

Our standpoint be to and in deliveries And FedEx narrow us inventory partnership orders that able will next when now. allows we on technology to it we further given quote delivery enable into provide the have we faster from we Saturday us will to pipeline even head a as even year. aware things be many actually

a great So, big progress and it making remains priority.

Christopher Horvers

you. have and great great holiday. a That's Thank

Ed Stack

you too. Thank

Lauren Hobart

Thank you.

Operator

with Benedict The from Please next question go Peter ahead. is Baird.

Peter Benedict

on Thanks and guys. a congratulations great quarter. Hi

the across and Just particular brand allocation on broadly where the about favor? in categories maybe last And change following in can are and a you are trends how your just over partners? comments that's evolving little more maybe change here your allocation that year up talk earlier, breaking bit any from most seeing you the been

Ed Stack

high things focused from we've really piece enthusiast that school of done - about the Well on athlete the athletes. have we've the and talked enthusiast some

business business from not been So our standpoint. soccer a The good. football good our very business was has was bad. really team sport baseball Surprisingly, very

very So, pleased those done are our categories of the well. some vendors. with have that We're

product The It's been pretty Colombia, I there. knock line all think wood. Nike, good. there it's Face, been is - on a great North Group product pipeline out

Peter Benedict

Thanks Okay. for you. then, maybe Ed. Lauren, one And

remarks. prepared your in mentioned You

there more in or changed What how their us give payouts or recognition kind so? recognizing, performance. on that stores at are the I there maybe for Just of changes how a in discrete as of or the little – based that detail last year more the guess incentives you or has the on changed is you're stores performance? sales Can -

Lauren Hobart

online, I in gives than stores. Yes, actually the to moment it's every day all, athletes the of recognition rewarding and an entire if that It's teammates what the everything first would our how X% extra company of throughout each of bigger from you'll we look of of sort culture is, every say the athlete. effort terms see of serve it's you

can everything And be from small it awards.

and something obviously We goes And store have up that we and special when big a the quick moments award as compensation to somebody larger the - and day rewards incentive during stores then our in for President's high-five does participate out plans, have full-store leading celebrations. awards well.

it's for over all that are people the where place. it's much activities it's So ways we're day rewarding - every in their But coming through efforts.

Peter Benedict

helpful. That's for I'll Okay. Lee. in sneak one then, here And

an fourth quarter, so kind us a there's But think we potentially as the on terms guess the much. I help the or in opportunity you think give any can about the about flattish that? year-over-year should anything of margins improvement line relative in EBIT terms there. we SG&A Thanks others to either roughly it certainly of line or margin gross Just, of on range looks

Lee Belitsky

Yes. quarter fourth say I for biggest profitability fourth of that is for indicator to with going quarter. would the the the sales be

sales we've line. move SG&A and goes. pretty - how where margin is how the around real But to weather our the on be got too to driver that depending gets think that's the is around and arms be in well can going promotional going I the rates

Peter Benedict

Understood.

much so Okay, guys. Thanksgiving. thanks Happy

Ed Stack

too. You

Lee Belitsky

Thank you.

Lauren Hobart

you. Thank

Operator

is Please Michael The next with go Nomura Bank. ahead. Baker from question

Michael Baker

stores stores the line out better. calls no think with been chain A where average at took and this One, quarter, I've you. you I the are another if in XXX second the in couple the But jumping morning. said those I could. hunt here Thank me comped you forgive about around stores

relates comp CNBC's decisions which that, would've one expected after were question. ago as sometime by And sales. better. hurt your is to the $XXX that you made I business, That's think to it X% guess secondly, on mentioned hunt had I you the then situation about Ed, the Parkland of million, business them I and

Or that that the that Is your from out? categories disagreed does the changed - on include blowback customers decisions? is just actual some that you. you've who with Thank

Ed Stack

Well, but on with rates attachment up last we us up - X.X% in all wouldn't we shop you that in And, people or comps this see that any was based than can being being longer. the thought what with would who that's quarter quarter us second our well the comps X%. behind

stores did a good you are that some just disruption it enthusiastic out, of those out. was took that And we the in We have forward. There rest stores going we out, there. to line inventory because been that was And as thought that am that construction to some pretty far company, as those better would hunt I surprised we're they for as stores feet. thought that clean the the with comp the taking

Lee Belitsky

QX period. our of we're of And that in notes couple a here, were too kind on as we that, in is peak other hunt

So good. margin replace that for with business be department keep going that of line better able the into chain the season it And out and to the is peak pull well. us and as rates the are in rest to hunting

pleased for results with those really the we're So, quarter.

Michael Baker

Got perfect That it. makes sense.

could. if follow-up I And I asked. glad One so then

decision to in e-commerce you that do goods business directly your How – sell not forward? just to think Amazon. or Your Nike's impacts business reaction sell going the to general to sporting

Ed Stack

I that going to were it they it's clear think impact core on pretty I a on was have and was it And Nike was going when had forward. selling an what a our more don't them business small product that think selling think they impact test in. don't meaningful I were

Michael Baker

Great Okay, thank you. quarter.

Ed Stack

you. Thank

Lee Belitsky

Michael. Thanks

Lauren Hobart

Thanks.

Operator

The Sigman go is with from Please ahead. Suisse. Credit next Seth question

Seth Sigman

Hey driving out comps Obviously step that. a if and last you have you items guys. the am year guys called back, were decisions quarter. in that couple electronics discrete of of a I hunting Great Good you initiatives also morning. made. just there and some around that wondering lot

think of had, about out so items there true the be trend may we we relative - the trend Is understand sort to helpful? here parse business X%? just of today do would a way benefit those a that to could if How of underlying the have much lapping kind how of is that

Ed Stack

didn't there think and benefit that me, when There footwear, said pleased year. a products was no in good sell to we're very base forward is pretty is a them apparel, which hardlines, - bullet. good really we lapping, silver it that last Well, It we was say you them going and - across we're in year. The had the it we this with is to businesses of business that is I foundation not structural the pretty shape. sign the as

Lee Belitsky

I'd say, there is now. an right absence of a meaningful there headwind that's out

Ed Stack

Right. Yes.

Lee Belitsky

point. but be we this base the say headwinds behind at won't anything Not future, is no to know. as But, are of against meaningful don't there there us business now, business any headwinds. base meaningful Running without right in

Seth Sigman

more No, about want that? I'm you tell to us Do kidding.

private-label on then So let's just private follow-up and brand.

just seems over with the and there Can DSG. performance here been it lot have a strategy you've a like around you bit as momentum is some of rolled it out? talk the about there iterations So, time private-label little

What there over learning mind of are sort if Thanks. target And you penetration remind time? the any about opportunity for is here? just in us,

Ed Stack

has no real brand guided great. been no we But, is great. to we're DSG been The is a necessarily. there's CALIA - Well, penetration haven't with very has pleased it. there what

price-point Hagen, done, with we've that value-based brands other And Some pleased we're Alpine a very is brand started. has trend-right getting just of done these. that is Design great. the particular Walter opening DSG in

you because helped got, other some business, branded they've And it's Nike the the our our we've Adidas at business think also - that brands we other it's a take look of hadn't with other in who because along is then it's of been the risen think who picking this customer also. in up the some another store before business, actually I product bringing branded

brand our year DSG think And be with happier we our be largest will is, now private So, we right next private couldn't business it. brand

Seth Sigman

Okay. you. Thank

Operator

Lejuez Paul Citi from ahead. Research. is next with The Please question go

Paul Lejuez

Hey, thanks guys.

merch driver a mentioned and mix categories about talk impact Can about Maybe margin also the like-for-like? just talk it you the little Thanks. is more is your a improvement You mix what merch you margin which overall. that Helping bit that sustainable? specifically impact. are seeing in biggest of

Lee Belitsky

largely by pulled the higher and the replace with businesses. is XXX margin able we team a footwear hunt it to as much impact in some mix we hunt a business meaningful driven are and were out in category sports, and the down reduction comped that athletic stores which of really strength athletic The apparel,

So those that's that of forward, affecting those and to well. carry as stores, out should be continue because we're strong and the in hunt businesses mix

So, to going forward. we get mixed should continue benefit

In ones kind of which performing want like-for-like, to departments, into terms I strongly level. that more don't are year-over-year of at individual get

it we'll the leave next discussion. So, at

Paul Lejuez

a Thanks. anything maybe stores, about each? And can store traffic add performance talk any of the follow-up, then off-mall at mall on you just your versus

Ed Stack

stores basically Yes. The performance in line. versus are non-mall similar the mall seeing of sales stores both. in We're performance comp

So, point. significant portfolio our we this have at with any concerns don't mall

Lee Belitsky

that our really think are mall-based parking. have stores destinations. to They got You too surface

the on. mall traffic, requires that up rely not the of down walking We're people. to don't one and drive sales mall we So tenants in-line mall

our have to entrants stores, we lot I virtually number our parking store think in entrants. the every one

Paul Lejuez

Okay. good guys. Thank luck you

Lee Belitsky

Thanks.

Lauren Hobart

Thanks.

Operator

with The Telsey next Please go is Joe Feldman from Group. question Advisory ahead.

Joe Feldman

wanted being and my sales. year? a and helping good the be Should drive should how quarter. you I it just Hey about taking to it. inventory shape know, question I said, it on rate congrats the year. said around know also same is up for That to in this guys. ease of next start it's to get Thanks would we and think sense

at? next want Or at to it do Like, even you year this level are be that be you year? more in growth that could where think we

Lee Belitsky

growth be year, slower saw I next more we be think rate a year. it'll much it'll but than at this

Joe Feldman

Got it.

Okay. side And market more taking feel bit are guys that people But, bringing area. another just guys you that stuff. - that have seems, you've I from away towards from that It about ask little then, wanted you're our team like, has you share the in question, regard? a gotten to say fashion it skewed like sport lately been helping? definitely based on more seems observations how not to footwear And the in has the like

Ed Stack

that focused think still core we core basketball real player, that athlete we - athlete who that is runner are Well, baseball that core player. on a

core the we But product. brought that business. of business still more that's So lifestyle in our have

have allocations business. of some better definitely from that's partners. And our We helped our

all past, that their And basketball buy shoes, in to the to place that go else our to that would that. can and have shop our and walk responded running of would well. have shoe to store pleased and they've very that into one-stop-shop they as They store lifestyle buy shoes a they we're very don't now. with And athlete some for to have do in

Joe Feldman

with the season. great. guys. Okay. holiday Good That's luck Thanks

Ed Stack

Thanks.

Lee Belitsky

Joe. Thanks

Ed Stack

You too.

Operator

Sam The is question from Susquehanna. next Poser with go ahead. Please

Unidentified Analyst

is question. on for morning. Thanks Will my taking Good This for Hi. Sam.

mean, color saw? on be guys what a mortar on that? positive. you getting it something X%. can can So, said I math, in sort I you give Is was little on guys bit the you you But and a of like our more specific that line brick us with bit just we're more know comp?

Lee Belitsky

math the so. I'd math, the is say,

Unidentified Analyst

Mid-single-digit is at fair? You're math. good spend

Ed Stack

think just accurate. I math - that in the you is that about put you talked

Unidentified Analyst

Great. to guys B&M comps do in And expect expect – do XQ? remain you you positive

Ed Stack

six can guidance we and in that is, the what between there - we've plan we is Yes. the baked and Again, Christmas. Thanksgiving remain days shopping on optimistic with got less That's of But about business. the that. unknown happen all into weather our our what

Unidentified Analyst

one And me. just more for great. Great. That's

impact you next it's for you're to touched you going your of guidance? what have how bit incorporating year expectation any on you do in you in little the can remarks, guys? impact remind us you And do So, tariff just opening - the a what

Lee Belitsky

think tariffs. through and don't pushing some specifically we guided we've of the it’s in of this for tariffs momentum much around do it there deals selectively see negotiating products And factories prices get and from the impact our not the Again, for to price I related really coming our year. from evolving pressure what has much through better increases space some China with yet is seeing either year. not we pretty our we're that on an production, or next moving been slow in

for way factor But this a A point, to play be go. us out. and tariff-driven to That’s lot a the at seem is next tremendous there doesn't to it long in year.

Unidentified Analyst

I guess for year. – next okay,

bigger than expect year? this next year headwind this did you will than be a So, you it year be do it to

Lee Belitsky

next far. expect prices has slow said, would it's raise far. what I chain to supply the I - seeing so been it anywhere going that's somewhat we're on But bigger I be product-by-product discussion It’s year. to the pretty a vendor-by-vendor, momentum as now. so right through And

Unidentified Analyst

it Great. Thank pass you. on. I'll

Operator

with is question ahead. Cheng Please go next The from Evercore Warren ISI.

Warren Cheng

just wanted Great Hi, of questions good on allocations. product follow-up to a the earlier job. couple on morning. I

over two allocations really noticed years improved. really I've So have the the last

the premium I fashion I earlier the really improved. think pointed side question running. an has out noticed

questions. two So,

are this is, some your then customers that thoughts bringing The now second And new are to there brands alongside that have? of especially a there sit exclusives, DICK’S ramp in of store? are run often you some as elevated you type any brands specialty you is, product also some of new first up conversations, any about seeing bringing some that the maybe

Ed Stack

it’s think customers. in I Well, new bringing

those in I the athlete, lifestyle buy But have didn't. to in think, the bringing coming they what's shoes, is, which important I our some they're customers the store think shoes able that new we more in today store customers.

the biggest change that's So in.

looking needle to We're athletes helpful a And brands, take always whether new at baseball brands. the can move new running that look brands other brands, looking the the as are can at or apparel we athletic all time we're serve. we they brands that brands, be for

So, we're at constantly that. looking

Warren Cheng

you. Thank Great. luck. good And

Ed Stack

you. Thank

Operator

Barclays. with is question from Adrienne go Please next ahead. The Yih

Adrienne Yih

morning. Good

my for competitors if Let like what that apparel. on weakness. units? to question allows that you're inventory, saw your we doing of Ed, that congratulations. strength specifically one that in talked is in secondly can first the go for about continue. that my that back Wondering there me Obviously, does then, sec, as a narrowed add what And look you to on

is much investments price very go the you that to of making And you causing we higher that normalize? see mix point sort are up? Thank should And when

Ed Stack

trying far from out the in marketplace. assortment years doing As apparel the is what to we're differentiate spent business, couple last we've time our there of lot else what a of really different, as the over

some we of got ago both have differentiated in better that will several So, questions, we have AUR. the and on our is of did a athlete better to also years that which product kind marketplace we answer raise tended got is we've enthusiast focused out which, there your more like

business. our really some done the promotional up our pressure driven don't of really because - a - the and bit of has So, we see a AURs business, years our job We last there and couple done some responded the real on team consumer versus in are as said, differentiating - the out the has promotion, the marketplace. see athlete around little conversation over a a has great we've assortment I others of don't

Adrienne Yih

to then, should And normalization? Great. regard with inventory, we the when see

Ed Stack

we off a to quarter/fourth up I as of year Lee going of rate. up starting it's expect to next And half much first - year. think, it's lower then towards the be next at bit a third said, although the quarter – yes, going to be little much in level it

Adrienne Yih

Okay.

Ed Stack

a really has big a have difference our difference - inventory big made in made business. in these investments But

Adrienne Yih

And quick then, you, Lee, two Yes. ones. for

positive for sounds But what to On AUR of you components? and driver the the about was It an the the Field the comp. very drag you & there. AUR much. return traffic there is talk brick-and-mortar, Stream can like Thank then, year? is And

Lee Belitsky

only & Stream very because Field in Stream is chain. remaining separately are that seven & Field stores minor, they Well,

kind And traffic we really we in-store versus - out online. of it's inconsequential. haven't haven't So, split the

today So, very yeah, thanks Thanks very much the we either. probably for call. won't But doing that be much.

Adrienne Yih

Thank you. Best of luck.

Lee Belitsky

Okay. Thank you.

Operator

with from Please ahead. go is question next The Jim Stifel. Duffy

Jim Duffy

notion that interesting to better is standards cycle service for virtuous improved being of a taking Thanks morning. Good and conversion and improvement. help my combined of in-stocks this questions. very Lauren,

Can further where share and think for levels kind investments? the itemize is room you standards? way to on just the stand between in you you And How service this there some benefit in the of service much progression? thoughts improvement inventory a

Lauren Hobart

transformation. overall. no of to our service We it's out say, A because still excited. in I contributing So, But there are very initiative year. very takes experience is change of to this better terms would engaged, early The major all massive our just April itemize, cultural way in relatively rolled stores new awhile. in a innings we're

do think continue for that next So, opportunity to it I year. be will

Jim Duffy

building anything improvement a coming have in periods? satisfaction any this metrics like share traffic on suggests you Do that that to Great. or that on just indicator is customer leading

Lauren Hobart

things stores coming the liking we're like of speaking, out that are Things that generally like that and in metrics CSAT improving. ways that. are Yes, the were

the a stronger generally strong speaking, yes, in resulting So, metrics are sales.

Jim Duffy

for the that's in lower the extent versus markdowns last I'm curious And investments assortment? in driven to Okay. merchandising ticket, what then, enthusiast-level me one by improving average products

Ed Stack

We've I that by markdowns and taken not - to where those strike lower postponing will. don't It's think by it's points those you being is talked it's by driven markdowns, we've products about markdowns. needed - on driven key if from rate the our margin driven be. in-stock

Jim Duffy

Okay. you. Thank

Ed Stack

Thanks.

Operator

Oppenheimer. with is The Brian ahead. from Please Nagel question next go

Brian Nagel

Hi. Good a quarter. my add really morning. Thank to congratulations And you for like taking on my I'd nice off first questions.

Ed Stack

Thanks Brian.

Lee Belitsky

you. Thank

Brian Nagel

just much understand gross next better in overall what sustainability of you look gross in been higher then And into And the QX? the inflection a go the And inflection improved of through help trend? year? think maybe the had – sustainability to number that’s of margins year has factors you a you there multiyear thoughts want at basis. helped then, on sales. higher-end the saw already I your and me also I that quarter that single So we to a as I on significant Can on questions margins or why balance drive just this

Lee Belitsky

to the are hunt replacing gross business the And categories. favorable main mix, continue merchandise margin. we're there I margin margin and going because mix items think drove in think continue, being deemphasizing three were side. the we with that's One Two it that a I will mix. and are higher favorable

and merch so is competitors to going going to be within It's is And play – by by the merch be that quarter is that margin we'll let weather. driven to actual have due item the how to and promotions. second that margin on. driven out see through fourth itself goes. lower It's The

So, that arms And to get that's guidance it's in forward. bit the that. have little we to going around variation of the a our harder one reasons the

X% that's item we be third the significant going within third really the expect there we've big the leverage And got And the occupancy as quarter driven increase to had amount comp have that and with is got quarter. fourth sales we guidance sales we the how get range for obviously in quarter. quarter. of in the smaller if some comp well the for we by leverage to we've that the comp And have that leverage in our unfolds

Brian Nagel

subsequent in second the you as a to about centers, Got on business - the think functionality, I the we then, kick release the reflective comments growth at the and expect say online QX, too investments talk is the XX% so fulfillment just in that investments? enhanced – and mentioned more should the here these look question ongoing of in follow-up, investments, that being the support website that it. – to you in Or we press your prepared helpful. That's as these And is, made quarters?

Lauren Hobart

decision alluded pullback XX% to on the was Ed the growth, our promotion intentional on earlier to part a as think I site. very

So this going are forward. core our load faster, conversion are is we're managing of are the improving times all and we drivers appropriate as our improving in experiences business see

steady year positive - into been impact next impact as throughout it's continued be will improvement there and year. we as well. But slow So, get this

Brian Nagel

you. Got Thank it.

Operator

is with The Wells ahead. next Please from Nikic go Fargo. Tom question

Tom Nikic

for my in improvement that to ask seen Thanks morning. of wanted good Hey, last you've the taking question. transactions I about in quarters. the couple

and improving? that driving investments higher Or the a it's experience stores and in of of you in-store made traffic function think conversion online Do rates? site it's to the function you your a think do you've your

Ed Stack

is earlier, from from experience. both. our done of a there think things done silver combination that said some again is we've some online here. a We've - It’s I I a as not there – bullet it's - great

into a right great had store. and Our the job based the marketing done investment have want are into athletes the better is driving that store. our buying traffic the merchants product. we've what they They The what inventory come finding on

And of say the one well combination the The number them. support we've why gotten I products is a from as our that that can't of I just with allocation business, here this we that right things have is are brands there driving things because sit of silver we're is running is – of say, we driving that and It's said, improvement. about as this. and now, a enthusiastic there it's which bullet are relationships

Tom Nikic

helpful. you. And Lee, quick a Thanks. That's follow-up for

not I think growth sure out we was partially QX, mid-single-digit more to or all XX-ish? inflated we QX's looks you if mentioned I'm by that growth some in look that the can incentive like should SG&A than assume that comp. QX plus you QX’s at the if rather quantify growth SG&A

Lee Belitsky

upon I outlier. based quarters year an by would QX had of in first it that year catch-up appears say, the book is out. the how from QX bit is It's coming of a – to we bit full primarily looks two the have a comp driven it a of we incentive and

more think QX. be will growth like rate from SG&A QX normalized a and I So, not

Tom Nikic

it. Got

Happy Okay. this and luck of best holiday Thanksgiving season.

Ed Stack

Happy Thanksgiving.

Lee Belitsky

Thank you.

Operator

Please with is next Ciccarelli go ahead. RBC. from The question Scot

Gustavo Gonzalez

this Gonzalez Guys, Scot. for is Gustavo on

congrats quarter. the off, First on

one on the question Just more inventory.

was the quarter guys kind you of during comps I was guys In can X%. quantify you guys the last year impact running if helping negative last You year? saying, the it's it lean. are wondering, what was

like helps? of going in to maybe turn then, kind And ratio, payables terms going of that to I'm what forward

Ed Stack

let last lean. the were kind little just under-inventoried across Well, run the we We bit board. year, a inventory of

gotten our footwear, in to running we a if We that enthusiast had didn't weren't in points, you too bit baseball mid-price we inventory will. really inventory product, athlete. catering Our

this to this the And benefits year. beginning year, starting so, beginning are see we

in DICK'S to investments and quarter Goods. with that athlete made last that third again in comps would coming those of we with started comps at shop you lost. kind X% focus focus up the that this our X.X%, that And we've athlete on year net We we is back in that Sporting up plans second quarter enthusiast can the see on used we've to buy our

Gustavo Gonzalez

it. you guys. luck. Good Got Thank

Operator

with Chris question Svezia Wedbush. is next from The Please go ahead.

Chris Svezia

my answer questions. Number you as Or comps well for my of can acceleration? Thanks about color quarter. through cadence any Was as It’s if Ed, everyone. that? my questions. see couple you but to was And it A quarter? you on morning Did an first this, provide what went taking want the congratulations, Good the you question. one, the consistent?

Ed Stack

we've best month-by-month with were pleased is We on Yes, we this comps that look the quarter. quarter basis. with quite really X%, guided and think way never a the overall at to the at really

Chris Svezia

Okay.

for Lee, Okay. you.

is are a are million SG&A there you of year, at make a that $XX in operations offsets? - the the the know, degree investments? to question the is, offset I offsets within there last are this anticipated guess fulfillment I some that think to e-commerce the made year. thereabouts continue active investments to side on comment that I business, earlier on the Just to you

Are those finding business still investment? the end model nearing within as capabilities to or is some active possibly the those offsets? are you of that that Or cost savings offset of

Lee Belitsky

are there cost after we're that for more year. No, going next available actively offsets

to of XXX% So, we we'll the investments aggressively can't to some cost But going making. opportunities. say the offset it's offset be going continue chase that of some to we're

Chris Svezia

last on, think you weather year, you I your was weather an was about no Do for start when little material question there purposes you a think referenced to a important. QX Final from is cold and to to guess a business. little it bit Okay. you QX about QX I But the real moment, just benefit comp the bit it was – for did this early year impact warmer. think QX, Ed,

business model, But guys private-label. get, gold is of the for I'm drivers a really turning important- How - service and the the weather lot individual the what to is you member I rewards, guess, trying to there in-stock, to like I that that going initiatives all that. just wasn't the seems company? hit it your given implied, Because to material impact three on am to trying call the gauge comp? QX much at two are it, it for how

Ed Stack

on that'll impactful And cold be when general to has it year-over-year weather impact an ground see and and the cold in also the isn't as on in QX a we’re that helpful. We'd quarter, in the get fourth weather business. you QX. as for like the And Well, some it some is hoping snow winter.

whether not So like we it is impactful. or weather

we comes a of We have and get if we done to got our weather. it right the at right has our proposition think cold be and a is job. try some And still value if good. done our the the don't those the very will best very winter team really have weather I impactful. But We've offset great to right got business we've for time, product

it's high kind is We've extremely of low some great. baked risk. upside. be warm, the it is is will If extremely in some normal, it the it's the If there cold, of and weather there if

tried road we've kind lay we we're the of under the best So, business. about in of pretty excited the middle this the the can to But circumstances.

Chris Svezia

around very the and Okay. And much. holidays best Thank the Thanksgiving. happy you all

Ed Stack

Sure.

Operator

The next James. go question with McClintock Raymond Please is from Matt ahead.

Matt McClintock

Ed, we Hi, could wondering the yes, about good just I everyone on if morning talk and congrats was DSG. quarter.

private-label next year. brand largest the to be You said it's going

before that brands private-label something given But, successful you past. tracing pretty probably smaller. the it private-label history. largest some would your had in a lot the And You've make brand was it's are in this that probably

how give the just will be you us you're Could Are more achieved? to to go into going Thank going going categories? conceptualize the space us help Just to year? product achieve growth product that how continue to you. help new about growth? to Are think you over you the next

Ed Stack

We've the brand. athletic apparel it's here. a really - apparel just got Sure. in an Well, based, it's not broad

basketball. will got come very brand really here. largest we're will we've broad-based We end our next pieces We've pleased some We've private And do flees got of by a baseball. have the Also it's - in box. how we think of brand hardlines, it largest and got year. out the the be with – it’s

will it we're enthusiastic it. about largest And you're right, the be in history and our really

Matt McClintock

you Thank for color. the

Operator

to question-and-answer the over to session. like closing for concludes conference turn Stack Ed This our I any remarks. would back

Ed Stack

have you. call we'll holiday. a a like conference great happy I'd on for look thank and again All everybody everyone to Thanksgiving us our talking March. forward quarter joining to to and Thank in third

Operator

The for attending today's now you concluded. is presentation. Thank conference

may now You disconnect.

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