DKS - Earnings call transcript Q3 2021 | DICK'S Sporting Goods, Inc.

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Operator

Good day, and welcome to the DICK'S Sporting Goods Third Quarter Earnings Conference Call. All participants are in a listen-only mode [Operator Instructions] Please note, today’s event is being recorded. I would now like to turn the conference over to Nate Gilch, Senior Director of Investor Relations. Please go ahead, sir.

Nate Gilch

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

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

First, a same-store note reporting on practices. our sales

might COVID-XX. consolidated be sales method temporary Our calculation that of stores temporarily of not as last because of the closures retailers. sales store method year retail result calculation a the calculating our includes closed comp industry, the of varies as of across we including same-store The treatment other Accordingly, COVID-XX. same

now earnings earnings our the publish the call to our scheduling lastly, XXXX, baseline. before March both uneven the against opens sales at future that, of Time. Accordingly, XXXX. A.M. earnings Ed. XXXX to we over compare a and are tentatively Eastern subsequent XX X, XXXX I'll will and market due with results And reminder, XXXX XXXX your nature purposes, a to quarter as And we off planned turn Next, on fourth of XXXX we XXXX with call for results planning

Ed Stack

Good everyone. morning, Nate. Thanks,

strong all like Goods, for very hard to sales over make our helped delivered performance to quarter, I’d significant in growth, which announce Sporting last and work to We’re thank another teammates earnings of possible. DICK'S which XXXX. extremely pleased both and commitment we and this their year

Sport athlete as continue with concepts. strategies growth to at of on reimagine work we second and driven business are highly Galaxy well, core redefining innovations DICK'S retail. and the activity. year made extremely are store that experiential destinations the sports and House we strong in Public outdoor The our We’ve we’ve the our in business our experience performing focusing DICK'S, opened launched Lands stores, new earlier recently this Golf two Our profitable

a As joined forces of Lauren Nike in deepen the will partnership strategic market relationship in earlier, place. we’ve that and kind further first with will DICK'S differentiate discuss its our

the to We excited for long-term remain XXXX couldn’t the call be the I’ll Looking DICK'S expect over turn of of our deliver comp sales Sporting now about and prospects more business. very in now Goods. Lauren. ahead, I to of future over XX% confident

Lauren Hobart

morning, Thank you, Ed, good everyone. and

sales quarter another this we our achieving third expectation. significantly strong earlier announced we delivered earnings and quarter, As record morning, that exceptionally exceeded

experience business. I that journey we think products in differentiated a of of to XXXX, more began recognize through our and in and our back-half a is stores elevated into merchandise when it’s meaningful We diving success the Before result premium our to make results, stronger current our transformational across changes delivered QX the that presentation. important started athlete

comp before reallocated to sales growing and and pandemic. our trajectory improved the more culture, stores significantly and selling changes and experiential relevant improved our also well categories. These more results regionally space fueled service We made improved our

delivered strong to year and platform. capitalize allowed XXXX, increase athlete This of us technology in a needs build invested and and also we’ve to on our comp quickly nearly demand XX%. omni-channel years, data For full sales science best-in-class throughout consumer

we’ve and our XX%. Moving third we our year guidance today between for this time XX% full expect the and that comp now raised sales to announced year, XXXX, to increase

lasting health States. and omni-channel entire in gained consumers Nearly by outdoor driven sales an product During meaningfully has We've access, and category United changes share increased are greater a our believe have market considerable Sporting focus capitalized consumer participation key strong become rebaselined on categories, in pre-COVID with and lifestyle sport service making capabilities. fitness, activities, DICK'S with that synonymous in and time levels. the when has Goods portfolio higher versus enhanced on we demand

optimistic the continue share, Footwear, our Golf. we in gaining Sports most trends demand Team like Looking and important categories, Apparel, and about ahead, to long-term well-positioned remain we're Athletic

number We granular management of also promotions levels. a of remain pre-COVID pressures, differentiated permanent include product a that about susceptible promotional by is These driven EBT changes to eCommerce significantly less more our channel. versus longer-term changes profitability assortment margin broader of very higher highly optimistic and

increase a same-store XX.X% a rate the period over third sales sales QX on and XXX% year, XX.X% year, our in consolidated increased Driven the results, XXXX. expansion, increase QX top gross last our to last back increased by and quarter non-GAAP of earnings XX% getting in X% our strong $X.XX per basis, on and margin XXXX. same Now diluted over share QX of

added on platform of across execution, X.X world-class last global to the athletes continuing omni-channel see acquired supported business, Our diverse growth new as retention new continue the quarter. meet by consumer our strong broad us we based chain. we supply athletes category helped were capitalize demand, and portfolio million and during despite robust QX this and dynamic X.X million We're year, strong another our comps to

is athlete high. record a Our database at active

to our and higher promotional differentiated drive significantly rates. assortment margin disciplined strategy with merchandise cadence combined increasingly is Our product continuing

merchandise we basis quarter, XXXX, our versus expanded basis XXXX. XXX points by During rate by the margin points versus XXX and

that across athlete know experience. our we're drives we DICK'S on competitive we focused people In a omni-channel to previously, a are work, to and entire teammate great discussed continue the great enhancing stores, experience we ecosystem. place experience our differentiator, As athlete our as make great a

In athletes elevated and a earned experiential. on the working apart recently service for also strategies making best within set standards of marketplace. continue place and workplaces more new Fortune's retail list in us with These fact, engaging our are and stores XXXX. We're we to our

the During delivered versus last brick-and-mortar year, XX% stores increase approximately up XX% quarter compared and comped sales a our XXXX. when to

of to Importantly, our our QX. the omni-channel hub stores our of enabling online in of XX% continue fulfilling be total sales approximately our and over sales strategy, XX%

business, during the quarter, increase was same Moving of were pleased in online to a sales to year. last which we eCommerce XX% our top period of X% growth deliver the on

increasing to compared XXXX. in Our same the online when sales nearly remained substantially above period levels, XXX% pre-COVID

curbside, well a also our profitability as costs, we sustained and drive improvement more of the pickup significant as fixed by to promotions. Importantly, leveraging in in-store adoption of continue eCommerce and targeted fewer channel athlete

our platform, our of Beyond brands omni-channel a portfolio is asset. tremendous

CALIA profitable partners, within while in focus including and to their valuable. growing highly the our Key same athletes. national continue DSG, traction brands and driving We continue exclusivity substantially offers something brands. DICK'S to vertical VRST our many assortment time, on At most strategic more and invest brands and and are unique our them narrow gaining meaningful with distribution

hardlines showcase We footwear portfolio, in across online. entire apparel, an stores can are and sport brand our and rooted over XXX and including

are provide products. These significant business line in significant margin highly make and increasing to of investments driving and continue momentum. partners top sales the rarely brand year, every coveted products differentiated promoted, our with us allocations Our and and exclusive of

will that see with new Nike with we'll Our this making we we're our even stronger, reach, have through them strategic specialized and partnership serve a value importantly, never more we that Nike for brand key important create and unmatched experiences, content, partnerships with sports strengths to as expand brands capabilities our To with big been athletes, and groundbreaking athletes, embrace Through and connect end, exclusive and partners. better. announced products, DICK'S collaboration bets transformative the offers. for other our truly Together, most recently industry. collective

have and growth a to while a DICK'S with way. of history aimed and our driving connected app. through a both successful This excited of partnership in DICK'S strategy long partnership mobile launch part working this deepening mobile companies is we're DICK'S to Nike at is a marketplace demonstrates exclusively for lead customers personalized our together, this in the our serving and relationship. and of companies, Our At

explore work our and Looking experiences other and for content and athletes. strategic physical partners properties Nike opportunities we'll respective across our with our enhance convenience, ahead, additional further to digital to

Now I'd on to provide like our updates few a newest concepts.

service, first Knoxville. athlete built engagement. First, Rochester DICK'S we with House product sports around Sport and pleased setting and is two community of remain retail very standard an for in our experience, House stores Sport of unparalleled and

completely invested two also in key Moving performance while continue and forward, learnings we're excited Boston Sport Golf to of We're of also excited our results been in Paul. Golf and located Minneapolis–Saint enthusiasts first to Biomek the levels. Galaxy of the TrackMan of redesigned with refine and Galaxy outside golf into has become grow DICK'S We've early Golf equipped House teammates all Technologies. to pulling the performance centers center by trusted rest our advisors of to ensure talent chain.

within In business, we also athletes. to our Public new a addition Lands, outdoor omni-channel concept core to innovating serve better launched specialty

Lands our weeks few store recently Public opened ago. second in here in and Pittsburgh, opened a Columbus Our just first store

experience launched eCommerce also outdoor for enthusiast. complete We publiclands.com, the a

and goal about is and While off strong enthusiastic very it’s Lands and to outside, opportunity exploring Lands. Public to still protecting America's more Public its a people start get are early, we growth this

demand. Before has levels product moment want environment period a the the our partners strong a brand with excellent of of spend a X.X% team We concluding, on the to end our to compared ensure the quarter working vertical very flow vendor get chain. to done Amidst robust dynamic an disruption, inventory ending manufacturers ordered to year. of our our to last meet with I and supply same aggressively increased ahead job and

holiday us. our business. said ahead While, are be start, our we the off opportunities a within our this have marketplace, is will And feel Ed in we we prospects closing, of fourth as that strong across are we the and exciting there quarter inventory longer-term season. to well-positioned In of very growth industry continue to challenges confident

the we our transform reimagine and As against experience, made position to execute our within the we will priorities athlete investments marketplace. strategic the we've to our strengthen believe leadership business continue

results company Officer, of outlook phenomenal. XXXX, business CFO in our SVP to position detail. at athletes. and month. to continued Our our impact to like transformation, and appointed thank Gupta, over the this more of in CFO, dedication work the After last the call financial Navdeep’s as been Accounting our center my joining our would them Navdeep has for all turn It's teammates to Finance Chief their was and pleasure to the now hard review and I to on our Navdeep are

on in partner instrumental Navdeep’s trusted to to financing years, the be over serving entire And the He's Earlier you. the our variety Sprint Over in a committee, is keen held will functions in Indian Navy. at the served he and four efforts, pleasure it last XX-years spent executive management Prior of hand financial in roles, my Finance. DICK'S. success growth that, vision to Vice he's in Senior most team. organization, a our securing and continued productivity as his with of and acumen of companywide role strategic a as finance career he's COVID. and leadership Navdeep, Nextel, Parts at driven and led it long-term most to Lieutenant the also the Navdeep Navdeep Advanced at recently strategic President roles various Auto a of played served of he to really critical DICK'S, outset become

Navdeep Gupta

us, in With consistent record very results athletes the serve Thank earnings be now with year everyone. here year ability forward a quarters and morning, differentiated continuing our you, behind way, three driving very to looking the our each I'm to sales kind towards demonstrated introduction. of and in to It's on work while great for you. to Good call, have strong our today's of another XXXX. Lauren,

on of last and top our a billion. begin brief period sales approximately with year, a increase we same-store XX.X% are report XXXX. $X.XX a sales QX consolidated of Let's of X% of to increase the same increased a quarter results. in in said, XX.X% third Consolidated to review excited increase XX.X% Like Lauren

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

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

XXXX, XX% QX eCommerce increased increased of versus quarter year Our on our X% in of to Compared increase the sales last of top XXXX. online sales a XX%. eCommerce third sales

online our XX% in penetration sales, net was quarter, last total XXXX has of current year. business grown XX% in percent to a As from eCommerce XX% the

increase XX.XX% profit, merchandise points leverage $X.XX gross gross This points, driven sales, year. improvement rate billion the strategy occupancy of on marketplace expansion was margin by third and fixed the to be to quarter of increase. basis was as sales XXX certain from margin increasingly to Moving fewer of differentiated basis promotions in or cost net due supply profit driven last XXX merchandise disciplined promotional and The in was compared continue basis assortment, constrained. XXX primarily our in categories improved to points by and

We also sales saw mix. a favorable

were to and to chain input costs. higher supply increases merchandise help price able selective cost we increases addition, pass-through In cover from

leveraged sales. which increases year prior basis was were dollars $XX increase margin to to costs. expenses from year primarily percent supply $XX.X points partially million due these last freight compared chain of costs million, expected, our SG&A to disruptions gross by XXX global well the of on profit cost sales, As of as improved expansion of net basis Compared XXX due fewer however, a quarter, as due million year freight increased over cost rate merchandise higher partially of XXX promotions, improvements the again were included as sales sales. support offset and fixed resulting and leverage prioritization of or offset primarily SG&A $XXX.X growth XXX basis availability XXXX, inventory costs. the in SG&A by cost. XX% points, points net to to current COVID-related In by driven points, to occupancy basis higher

points required percentage to partially points the leveraged hourly However, a strong XXXX, delivered XXX share sales, our expenses sales $XXX.X per in as including to increase, non-GAAP share sales and year-over-year operating support increase. million or million well in gross or due of designed XX.X last at year's COVID-related focus, a the $XXX.X $X.XX compensation we million share compares were a minimums, calculation. teammates the convertible same the as of million in net investments. of $X.XX. year, million $XXX.X $X.XX net SG&A share basis, offsetting annual to $XXX.X expense, sales. $X.X EBT in points we XX% a GAAP Both earnings total, of are This XXX% that offset longer-term increased XXXX in and period to accelerating Compared XX.XX% earnings our shares increased interest increase the percentage are a year, we related programs increases merit included a diluted transition basis rate basis non-GAAP net but diluted non-GAAP issued a non-GAAP primarily In and diluted per bond current or higher was XXX in QX store non-GAAP our approximately of year. a in SG&A XXXX, due to basis, have well per with costs. and diluted a last we payroll and XXXX. On rate increase increasing as in of as as our and Compared $X.XX. non-GAAP to non-cash notes increased expansion, EBT XXXX, earnings hedge of our wage these sales, share basis diluted settlement, hourly to a dollars earnings increase to by on of wage additional by per expenses million sales. be last This GAAP to as and Driven margin from

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

cash revolving billion sheet, strong QX ending are borrowings with balance no and we position, $X.XX financial $X.XXX cash equivalents, facility. of in our approximately on credit looking Now billion and a our

increased quarter-end last end X.X% Our inventory year. levels compared to of QX

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

our well-positioned Lauren's our marketplace, of will while industry As challenges continue outlook. at the this are to supply of elevated impact in this, we part we expenses across included within comment, feel within and we be freight very reiterate there this quarter continue, that the to have season. chain fourth To expect holiday least the

to included in the our dividends, share capital announced that net we paid expenditure during $X.XX capital $XX.X were a per which allocation, quarter million Turning special quarter. last dividend we quarter million, third of $XXX

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

have We share repurchases. approximately repurchase share $X have under shareholders dividends through billion returned XXX our Year-to-date, million to and remaining program. we nearly

growth component be to to allocation capital also of business invest Looking in balance important while on to an appropriate Returning will of sheet. capital an profitable ahead, of continue the we shareholders level continue cash strategy. our the maintaining our will

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

XXXX, This basis, of expectation compared range in billion midpoint, $X.XX to outlook in the and a of represents up sales last $X.XX we year of results compared expect top early we chain versus At account guidance supply up both of is and consolidated midpoint, XXXX to higher increase promotions X.X% by XXXX to same-store EBT expenses XXXX. results, the be expected expected to a a While due is EPS in this expected our ability expect we costs continued share to is the margin Taking sales the and non-GAAP start. of compared XX.X%. of strong increase and approximately to it’s guidance, at along XXX% compared an increase fixed earnings up consumer higher and XXXX driven full assumes into our consolidated outlook Within and to for XX% demand non-GAAP fewer comp which At off total, prior XX%. midpoint to challenges, billion the X.X% confidence XX% with QX merchandise fourth increase a both updated XX% our non-GAAP are now to $XX.XX, versus a XXX% strong $X.XX diluted prior billion both EBT on non-GAAP up is compared our margin SG&A XXXX basis a At and our be versus versus This the to $X.XX per on is to raising On XX%, on full versus to still and increase QX this XXXX non-GAAP to expense XXX% a same-store to XXXX, up global updated a quarter. billion, our in leverage XXX% navigate is freight full significant gross of versus expectation to the our and by margins. prior on outlook and $XX.XX $XX.XX our year raising to year sales in to these is significant the sales versus XXXX sales XXXX. In year comp a of $XX.XX. XXXX. XX%. basis, are to leverage up range sales. prior our to XXXX to full a increase expectation midpoint and and guidance projected year,

is Thank shares for we for that financials questions. now sets interest closing, deliver operations concludes long-term. may the well guidance our your XX.X%. rate to DICK'S diluted value This again you XX over prepared open line the average to and on remarks. to done Operator, work effective based In earning improved shareholders have us outstanding the and up million Goods. several strategy, rearchitect in you Sporting once our years an updated our tax approximately of the Our past over

Operator

you. Thank

session. go begin Stanley. the with Instructions] question Please now from Simeon comes Gutman [Operator question-and-answer first Today's will ahead. We Morgan

Simeon Gutman

some at have examples Do I you're have Hi, on Is visibility sense it come gross morning, that? a are of question categories promotions structurally of margin, improving? of managing gains. these, don't there margin where may higher everyone. COVID-related and that just My around Thanks. kind know back first And any you a maintaining of good level?

Lauren Hobart

coming several years. very very feel strongly we've that just more put We a activity, past merchandise COVID-related because margin from of a differentiated improvements our Simeon. gross over Hi, about assortment are they various result in the place it's not

desirable product So, and increases that we so much. assortment the that's but don't is go fact our been sale merchandise have products thing the margin really on less our promotional, more these driving

in And confidence do so margin. feel we long-term our

Navdeep Gupta

change promotions a landscape especially And Simeon, are are yet here. for the I'll attention just early promotional that season to see as still the QX. add close holiday to and the the see paying to significant change. coming are We back, didn't to overall we we in landscape, It's look in a QX we

Simeon Gutman

for Navdeep. framework, thanks, you think year a maybe on but a And such business your And comparison is give and grows? keeps the for of you ‘XX compounding planning the I a follow-up you you as Or since just won’t year have it the top-line, CFO. know Initial us I'll ask an first do reversion? digestion easy

Navdeep Gupta

comment. the for thanks Simeon, Yeah,

I think guide for as early though it's us a little for bit too to ‘XX. yet

the are of we in creating and expect, expectations ‘XX. can our for budgets you As process internal

So, we course. will more in due share

us, really However, in will the I and sports and all throughout the categories like comment to strongly gives gains that this for that golf. about the key of I team definitely as some we year, we have is apparel, of definitely are confidence say a share think consistently. gained this to us the And that feel seen have footwear, we especially ‘XX. lot we look categories have core we year Those

Simeon Gutman

Holidays. Happy everyone. Thanks, Okay.

Lauren Hobart

you. Thank

Navdeep Gupta

Thanks, Simeon.

Operator

Cheng Evercore next with from Warren And today ahead. ISI. go Please question comes our

Warren Cheng

for morning. my good Thanks Hey, taking questions.

As normalization, question. to far of the through kind think help as you Simeon’s follow-up can us

EBIT its pre-pandemic looks Just the margins, normalization to for be XXXX level points year. basis this of over what

areas that So feel most you you assortment. talked are a little merchandise other see What normalization and confident XXXX? sustainable? we in where the about can differentiating structural And some are bit

Navdeep Gupta

Good Warren, this morning, Navdeep. is

me let So that. take

feel really around actually strong where margin other is areas the management. is The we

draw our those the to profitability the the compared management. our And feel that of to want over last well are to as will of significantly are that And built We XXXX. profitability digital we promotion elevate analytics of that eCommerce And years. the we well attention clearance the margin couple something other is benefits as aspect around business. pricing about when have as talked optimization, the as the I capability capabilities that have optimization,

that have is permanent the curbside that adoption future. business, confident launched profitability and overall eCommerce be right as in was uptick we very a we company's overall to athlete, the strong we with the during our the EBT which line now, that from there'll With in seen are COVID, the profitability the significant look the capability of

Warren Cheng

follow-up on I into customer are the I there to the Navdeep. was just that's if the an data as going And on partnership? Nike. that partnership a side? with had part relationship, curious that inventory element side there's also, of integration either data or sell go just Thanks, sharing on any implications for of

Lauren Hobart

Hi, yeah. Warren,

So, excited benefit. with innovating is really taking a really new transformational which partnership, This moment for decade's the in Nike, are we long where is about partnership we're and everyone's partnership that a tremendous to in athletes their amount product, scorecard experiences, that their app the can in connect Scorecard our and Nike different users ways serve content. of together. our now a unlocks membership, we our

part significant And point way database through some work to that So this app. we download athletes. plan overlap. DICK'S a use personalized which The DICK'S app, athletes. of just to our and the data, I only strategy. There also, is there's out, create experience want key of Nike is to a enriching combined Nike-only our that people excited is inherently amount very going is much I'm to the that driving get data tremendous have for more up access to a and the Nike a specific information. to access membership DICK'S a with And to sharing. it of real -- together our amount and truly database opens is

Warren Cheng

Navdeep, the luck and Welcome Thanks. over holiday. good

Navdeep Gupta

Warren. Thanks,

Operator

Bank question Thank Please next you. of ahead. And comes our from Robbie America. Ohmes go today with

Robbie Ohmes

Hey, good morning, everybody. Two questions me. for

Can bit in supply maybe with between favorable where business then a what seen mentioned price the this talk brand favorable much how gross mix you talk think about the Thanks. for is, perspective, us in chain question you differences and private you I Lauren, Can mentioned. First to helped forgot mix same-store help benefit my sales you're inflation sales the increases environment? other chain label supply sales And partners? the taking the to maybe was could versus who I price the a you've margin from have understand is what might about little your And were quarter? your quarter, increases? also

Lauren Hobart

our I'll terms I'm will with developed Robbie. we have But with our chain manufacturing of expedite supply supply vertical of in Navdeep product weigh and really the off, across getting our Thanks, brand start really how in. partners to on chain, we a in brands. amazing organization, sure our muscle both work

So we want to keep have become of we're we and in. product quarter. our up product in are baked this but guidance, honestly we sure and very we going bring X.X% flow all And overclocks, terms that's that product in why how got prioritizing we've into creative we that make of into inventory coming

XX.X%, is increase in the numbers transaction. that. board our X.X%, at key all really price sports, for and increase this was where We We're footwear And share sales very strong terms increases, in gaining to golf. to In I excited our about a taking comp When we're of in footwear, team our we really, of wanted particular, across mention look and due also at apparel, we're couple an that and categories of of things. gaining of quarter mix. -- share

stores comp coming our was of in from our two-thirds transactions additional So or site. either our eCommerce on

So quarter. part our cost did not in of this we of remaining our reduction inflation the the some along promotions, inflation big overall, category. story. from and driver was comp came pass X.X% The of in comps very increases was hardlines minimal But some our select

Navdeep Gupta

sales take and mix the increases. me price let Robbie, favorable

that points. rate said we merchandise like expanded margin basis So XXX the

the can assortment. great shared, and was the was and growth actually you a in However, the key the And well, as selling bigger rate like story that differentiated bigger saw imagine, apparel drivers we to favorable was of assortment, categories much There was right, full a fewer favorable this and merchant the price about as mix mix. promotions differentiated margin that slight like tend But our Lauren more promotions. higher footwear from have margin. lower expansion

not been our in price is really we QX. increases, price hardlines overall pricing story the material the selectively passing price are the again, of of only factor the where terms increases or small category. have the to increases for But that's And some really, it's that and In seen we in athletes.

Robbie Ohmes

very That's helpful. much. Thank you very

Navdeep Gupta

Thanks, Robbie.

Operator

Our question ahead. go with from Please Barclays. next comes Yih Adrienne

Adrienne Yih

to again. Congrats quarter. putting really my difficulty] high to a be you you average standout about marketing. Navdeep projects, question morning. also CapEx that stay of in stats And you? in? you employee the is, just AHR, talk kind Thank those in to turnover, the minimums guess very to you're about Can [technical are Good et competition? level And hourly I you're damaging then above talk well you. some dollars that's you talk happiness, invest Good and margin cetera? now where the able another Can invested Lauren, of on rare on how ahead you IT, maybe inflation kind to Where of welcome. rate

Lauren Hobart

Adrienne, talk you. to good to

We spin when many and able baseball footwear we're entire the in have in store we've of business invested investing on been years more the for now. part XXXX. our overall our that stores And long-term many, investing made areas been attack we've footprints, for our since so transformation the that's team. and experiential, omni-channel to technology up this that we're We're leverage we've decks golf pandemic ecosystem. happens, our and elevated able to the a in huge We've curbside,

that the So to would we're I want we speak the aspects holiday. entire have of really our employer is I to system. I'll let into Navdeep and we retention choice however, say an continue all minimums, of to is going and say well staffed our become, invest hourly what do lower, omni-channel in

with the So forward. our going teammates, be start way going how we feel about good really engaging we're to are we and

Navdeep Gupta

rate need into find talent wage the where year. call upon experience hit our right our this at wage gave our as able two competitive similar would change store. athletes, what when year, we away in the as to another minimum, here be they from is a last increasing to as continue operate, well a hero to of differentiated to provide things, did and we and intent very the one, so accelerating We say walk as average merit teammates. the you we to pay provide beginning I an recall, we hourly Adrienne within to increases gave to the that pay market as this of middle transitioned the we And that we here hero year,

is necessarily look minimum rates, store. to experience and come don't they pay making attention what wage athletes differentiated we say can we the So our more to the to into provide a it we finding the starting as at right talent sure

Lauren Hobart

are want more think meant I employees What is saying I thing, I up so more is we one in that ecosystem. people, correct our Adrienne, I ended retaining we're keeping to higher. retention

Adrienne Yih

Fantastic. Thanksgiving. and for Happy of luck best holiday Great stuff, and

Lauren Hobart

Great.

Operator

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

John Kernan

supply of started Excellent. the from you it taking it's your impact quantify Good any when perspective, get chain cost in these perspective sales on and a to could back-half from calls. thanks normalize? my go year, year? great next freight to as for assumption terms with thoughts question. if the this of Navdeep, the morning, a in on marketing on or Maybe just what's start you from into costs And we freight impacts

Navdeep Gupta

first of the thanks and comment the all, I think -- for Yeah, out. call John,

it In we out terms it of was the but not chain impact, significant, it we QX. impact, in called for the results in said that an unfavorable QX, was supply included that

fluid. remains overall think situation chain sure the between continue guidance. and the the closely doing look it's has to to we prudent expenses. And be availability as are decisions as so to supply again think we'll QX, And the to been we chain are continuing make contemplated price to little in I increases. bit prioritize supply the expenses a our to pronounced over look the really that beyond And we going increase monitor I more really

least disruptive to However, place kind the we it. here, XXXX. But into that will remain continue at of will feel this attention close to pay a of we first-half

John Kernan

Understood.

you terms As of cash my just and capital we you. also an next returning cash, in cash buybacks, as or could think about capital go organization Pre-COVID, sheet year, so that different billion direction year? and $X.X looks Thank in and reinvesting dividend with the levels was to balance cash, through was shareholders and follow-up, a ran it But allocation. lean allocation, on in business. it have opportunistic the dividends into share should in goes $X.X in DICK'S like how buybacks this billion we of previous on net

Navdeep Gupta

that share are with of we I’d make this $X on learned very you things cash that the to billion have very, I happy shareholders the dividend, nearly fact well sufficient have excess more level out, all, that to the balance were of we through we cash say the the than as first of we return John, to is pandemic think able special as sure Yeah, And the one of buyback. that sheet. year, the called dividend, normal as

balance future. said, continue comments, keep we in to the to So, the we sheet as of immediate level like I appropriate my cash on will look prepared

we returning to terms buy our always to do In and the at cash feel seeing chain of the continue I the be sheet, And to we we we the are flowing to on cash continue we invest. like you what grow the the will that and will area dividends strong, is to perspective. levels working elevated feel have shareholders, be capital that look look continue of to product from shares. demand the that where done balance opportunistically the to remain like, our you excess continuing continues when of we kind is to supply an need because may

However, the through. we in-stock are some that potentially working has opportunities

of working we been would capital, work like on us that areas of and the the differentiating called So for some to have continuing new continuing capabilities build to out Lauren be investing. investment

John Kernan

great. you. luck That's Thank the Best of holidays. for

Navdeep Gupta

Thank you.

Operator

Davidson. from next at our And Baker go D.A. Please Michael comes ahead. today question

Michael Baker

guys. Thanks,

first, back-half does Just your outlook but you less three you're of thought confident, short-term fourth us or back-half how front what in when outlook to quarter, not you quarter confident, to is more holidays? the that in focus, so implied Are seeing the can the gave compare outlook be just about confident equally a months ago? fourth how you couple, the tell you

Lauren Hobart

we've confident. XX%. in now quarter have is fact, standpoint, supply to guidance that closer, always much as really XX% Yeah, we And about feel to see we from were we've the can how the shape that's the why good up We we to are Hi, more comp concerned Michael. about feel going taken and year taken of up chain, inventory quarter and gotten an up that guidance full and up. we our

Michael Baker

year, consider That's to product the great. today wanted helpful. Okay, we it's picture, be a brand exclusive vertical I way where a from would a a that talk that to last or if transformation? this One question. any possible. more, short-term products that or or this way some ask you saw don't because be either conceptualize percent just started you're to your those conceptualize differentiated it sort getting pick Just you of in year, I XXXX of Can when is vendors, quantify about was, to would compared more of know bigger great

Lauren Hobart

Yeah, it's a great question.

heat grow We significantly product to share. did all. an our our you than continue a decks, few get we assortment gain before the that about had more allocated high more brands we footwear so, are ago product versus vertical access and just fact at or and we were And meaningfully distinctive years even in not if to think XXXX

such it's to like go rate but going So feel a a it number, forward. key is of margin the meaningful increase we're not expansion we our that provide driver

Michael Baker

more if enough. could. I Fair one One quick

or areas really year like you imagine other talk Just team better How QX maybe a the up So would at be great. those the moving categories much of color ago. than bicycles? were if sports Are any further the away strong over on even we're COVID, are that that about, pandemic? Thanks. pop versus – is kayaks holding beginning as of from of I sort some of some could the

Lauren Hobart

great really question. a it's Yeah,

back a across when same fitness you what you we're time would had we meaningfully look that single categories, Those, business, team seeing from are particular, are at come were as could increases and sports, really guns back than their the every pre-pandemic but well. they significantly Warren’s pick versus years surging in higher of sports at really category blazing, two levels you And really mentioned as true to strong well. rebaselines it's That's people say important what every categories come those and ago. really, really kayaks valuing question, golf single COVID And their think own question. you outdoors. Team the categories, has but have time are bikes, really, say maybe I that as other holding were. the up,

our meaningful part comp a that's So story. of

Michael Baker

Appreciate you. Great. Thank Yep. the color.

Lauren Hobart

you. Thank

Operator

Christopher comes with question next JP And Horvers Please today Morgan. go our ahead. from

Christopher Horvers

Thanks, and good morning.

Can potential in to categories to progress? you stocks, been could that certain of then, more the proceed quarter first you as you footwear you pull your a of the might fourth are So exposed thinking is, How lot forward my And towards that terms season Christmas? what increase Vietnam. like how and out demand. golf risks of holiday question are around related media are there of around about that there's coverage are about see talk and areas expectations

Lauren Hobart

chain gain we share, through Southeast to access of we're and that we challenges do to in Vietnam challenges our for recent product. the Asia, supply we've you entire been position so to managing managing and partners, have Yeah, referred continue key great been with to a have the And the aware more time of pandemic. and in feel brand

didn't in buzzing single products this every So think across availability to look of We case. you forward Has out feel So have. about related that QX, that's pulled lack And at as stock don't issues. those the that for not inventory we about of far have levels is think the case. Christmas, good a we Thanksgiving retailer. really Obviously, Anecdotally, weekend. concern was the demand? we the we consumers news

will there some at tell and how So the But we'll I time look will out. imagine pull quarter be forward. shapes

Christopher Horvers

say, into what, you categories, the maybe or get COVID accelerate Got it's ‘XX, you category know it. a think are some as And maybe allocations from maybe it's you reason categories about you to and any wasn’t continue one for from this where then beneficiary it promotional there in category, better other like as more can management? pricing another, sort of momentum vendors,

Lauren Hobart

key our team all continue important of is categories, it accelerate. we golf, really share, that But question. footwear, to be this continue believe can sports, think to another gain I and apparel, Yes,

all that vocal and that to going the of to we been they're we year, about we're retaining past this brand and X.X We strategic have the fact the brought new the have differentiated have same those in quarter, last where distribution customers brands And narrowing partners. the on position partners focused X.X such we the customers. year be partners million and our in very past are fortunate assortment category. be in time, At another to this to million key a brands strategic keep are national

and going gains. to key in categories share So, momentum we're believe continued see I

Christopher Horvers

So, a fine point I put just guess, it. on to

perspective that you ’XX? do expect in from top-line a could you growth see So,

Lauren Hobart

XXXX we're now. ‘XX So expanded not we're that rebaselined going to but have to right since do has time, feel to that wait guide going to meaningfully to versus We and that profitability meaningfully our ’XX. guide we've to confident

Christopher Horvers

Have holiday Thanks great a much. so season.

Lauren Hobart

Yep. Thank you.

Operator

go pardon ahead. and Paul Citi. pronunciation, our question Lejuez comes And the from, Please next today with

Paul Lejuez

second, And in coming curious, you just of higher and specifically? plan share that first-half might vendors for on Thanks, is and level look just where prices think guys. your And for categories I'm outside how seeing category, differ basis? from, those what's category the category pricing a the market you curious, out from apparel like you the of ‘XX? then goods footwear, as high are hard by Thanks.

Lauren Hobart

going and to next and the year mind our business. work be strategy right customer Yeah, with in vendor the into what's the right manage keeping pricing, our partners what's to for between going is balance for

is manage assess And where continue pricing in. we the go as so we will that forward to and coming

are about you we that. just multiple share maybe really, like which really But across And from differentiated market every assortment look we It's market coming share are category feel compete. believe I in virtually if categories Our confident from categories, other in coming in footwear. as perhaps our gaining we we mentioned, gains, places.

Navdeep Gupta

comments let is gain. Navdeep, this Paul, two add the me quick share on

heard, to brands, in service which as our So you as some narrowing actually a about Lauren lot as and key helping gain us some have allowing experiences helping experienced and company of national the well of well to have as of we also there team as share, terms is is us our our assortment, distribution as us by what well, of is all as gain which this sports, better golf. store as talks apparel, our share attract core database, in a is in well footwear, like new lot and to categories providing athletes

Paul Lejuez

Got it.

two customers could what new they shopping last terms look follow-up versus to and Anything you their on that of you year. Just year gained the a year in like share in behavior DICK'S of one? being customer

Lauren Hobart

Yeah.

into we’re have many we're be delighted the how They we them of we brought coming it retaining. with athletes how about channel, ecosystem. within So stores, also be it been And into are many every really happy curbside, become.

pandemic products. a the hot they that's each newer demographic girl ton with as for And female. do think as urbanization little happened which assortment more to think little do younger, our people expanded experiencing that time. skew of the a urban, bit skew well with during athletic and they the one which brand has as So a that had And female. that to at team the with something of well bit rates. around first of I we the more the has initiatives in I of athletes we've gives note repeating brought very mean, great we're is and sport pleased the are that doing of women customers slightly they is The thing teammate, and we've channels

good to really customers. passionately retain working incredibly them new group and hard a and it's them We're So satisfied. keep of

Paul Lejuez

Thank you. Best of luck.

Lauren Hobart

you. Thank

Operator

Haskett. question at next our Grom from Gordon go ahead. Please today Chuck comes And

Chuck Grom

very thank you much. Hey,

tech the talked about into of early on store does here. success the as part wondering you anything experiential that I’m think store Sports in the Public of the the could you more guys being you're story rollover House of or that Lands seeing typical You format.

Lauren Hobart

Yes, thanks, Chuck.

at true department across we look further are approach decks. that's have team seeing our experiences. regard we've baseball experience, store, the to core that's into experience you traction, the tracks elevated a gaining And throughout from ago, hip deck so in brought our then and stores, attack if and and golf years Sport, House few great of results our with we We and

wall, is rock and the notch the any model, outside, field at track that have top a service experience we have We golf specialty. climbing and store a rivals elevated we've and

us stores. and in to is One be The we'll you've very DICK'S elevated and store. lessons past of at into bringing are of those service model experience. example all So, the like things House the the what giving room is and that very fitting ideas DICK'S the seen things different the bring in into than DICK'S, Sport

Chuck Grom

the with near-term looks Okay, impressive guide, quarter just start the great a to quarter the quarter, like question, it's presume just comments reconcile wanted with pretty just but that's is off flush just your trying fourth your one us. that's stack of that being which deceleration. you status it's if could just the that to given big comp a still see fourth out I’m I helpful. early on to And for in then conservative

Lauren Hobart

Yes.

quarter, closer So we are we inventory have our and confident taken our guidance up as significantly in we get more to levels. the

we more quarter thing I sales at holidays. the non-promotional [indiscernible] our are midpoint guidance, think even be one the that a previous and than of to are much is XX% expecting to to this note up

that the on. we is baked everybody still feeling conservatism guidance with increasing in. So down are we But, challenges if comes there each quarter and But to really probably and we’re for perfect our up going exact make have sure in. good the some product

Chuck Grom

lot. Great. a Thanks Good luck.

Lauren Hobart

Thank you.

Operator

comes from the UBS. Please Lasser, next question ahead. today Michael And go

Michael Lasser

the margin business what's the for that morning. quadrupled think and some there time for of margin by period EBIT business, since target? that doubled is your since is or Recognizing Is averse a X% did closed when XXXX, realistic a margin stores sustainable XXXX, operating long-term the you in operating for us is time? level the to that you or minimum giving be maybe transformed were up Good debate Thanks a your third recognizing you're that question. really my that going tripled, since The are lot taking sales a that time. probably

Navdeep Gupta

Hey, is Michael, Navdeep. this

very two we higher has things that, guidance. like baselined say our confident internally are working to think that, I business where long-term was. first significantly XXXX feel what said than I all, we through Having would that our of

capabilities athlete So think the that about, about level. a as of is business well different whole the we the talked demand, you as at if have profitability become the

So even in where higher we that's that much, is was feel XXXX. much, much the than very business it baselined where confident back significantly

more confident So that. we will feel guidance, to about continue but provide very we

Michael Lasser

horizon My margin likely All sales new think you next remain out investing on markets that in XXXX any the labor could follow-up do are year? question to is, you frame in this potential if think tight? can you were operating equal, experiential investments maintain else the you stores, flat being your

Navdeep Gupta

on won't well both on the experiences, be we'll your footwear we footwear, further stores to to think of provide to and where premium ‘XX. expansion within done and invest similar investing, building really those capabilities have technology side. continue eCommerce, well as in will well in as our as the our as I I continue service, in investment big be will answer question But the guidance any areas full

Michael Lasser

good a much. very you Have Thank holiday.

Navdeep Gupta

you. Thank

Operator

Our Sam with today from comes next question ahead. go Please Poser Trading. Williams

Sam Poser

Thank been previously? the signed newer what signed year, a you a now you -- for up handful your And customers more customer One, now? two of have over doing than the have right percent business here. got your loyalty be active loyalty seen the taking customers questions. two had my is is last this up almost that parter years I've

Lauren Hobart

results Yeah. and have as growing you the strong. scorecard we new growing be in seen our scorecard that's transactions is to of XX% see be we comps. a in the business the our And database active, percentage of actually more continues and The percentage have customers that over that and

active, yes, So more more and are profitable. they more are they omni-channel

Sam Poser

this I isn't your that you as are the access with product then a parter to again, some noticed Nike, in channel. two And accessible getting online is that partnership normally Nike.

priority to have product? degree feel with -- like issues with high vendors into beginning you So a a the best and chain your have secondly, sounds when way very, to in put be me we the or you they of guess, that the may because be going then very to real bigger, it? more launch it confident. change Should able of levels how view partnership, And the given it -- type a any literally is there's your next sort the availability inventory call with supply priority constraints of that be going little larger are the inventories have appears product you to of I type become seeing year, to disruptions I’ll to the

Lauren Hobart

Yeah.

membership and So are your going to answer we we see type we've are the you're product so degree first of connected the a connected experience. of in of inventory are And seeing across be the seeing question, part benefits larger our launch correct, to boards, also already that. we that should

We are vendors being and our prioritized partners. by strategic

obviously, it's the soon so guide into too to us And XXXX. for

prepared to And some two customer continue. experience. been of years the going supply a have to on will issues deliver but the for that well change, chain They last good continue we're

Sam Poser

Thanks very Happy Happy much. Holidays. Thanksgiving.

Lauren Hobart

you. Thank

You too.

Operator

Securities. with comes And Seth our Basham from Please go ahead. next question Wedbush

Seth Basham

bit fourth but Thanks quarter, fourth more slowdown a that for guide? top-line, about costs the other you're limited the pressure, more implies it much any than are leverage a but quarter just also experiencing and little of guidance obviously there expansion. the short-term be thinking the lot. fixed premature freight Not focus, in to too less in margin Other implied headwinds

Navdeep Gupta

Seth, Yes, Navdeep. this is

feel would I manage. season would of think call. the at you we really is able holiday business. those, are And good advertising considering be into another and biggest looking profitability that potentially area to another that to nailed advertising, that you areas, the looked I the two peak as continue this area the briefly Outside be be of of would we'll the we that

Seth Basham

you'll questions follow-up accelerate And Do new enough concepts store Sport confidence House new helpful. around Lands. Got and and like of XXXX it, how have beyond? openings in some performing my just in Public concepts you that those

Lauren Hobart

for We in have both we concepts. and prepared confident open of to Sport do both next Public stores are really being Lands, and year House

grow will appropriately them, and them. we to optimize we while So concepts expand continue the

Navdeep Gupta

of add opportunities our new would the stores, addition we have conversion I to some also Seth, opening on that in existing stores.

as relocation, it's new we So new at opportunities when the conversion as opening store a well concepts. look

Seth Basham

holidays. Understood. Thanks a lot, happy and

Navdeep Gupta

you. Thank

Operator

Feldman Please and gentlemen, comes question ahead. Joe from ladies Advisory final Telsey at today's go Group. And

Joe Feldman

you're that Or now guess it's wondering how my the thanks, had at store eCommerce, that day? Hey, I EBT at I was comment you overall question business that this think basis. high same at And profitability as you the questions. I for it a Could I guys, profitability? level exceed about on the could think point. an just go taking one made

Navdeep Gupta

Navdeep. is this Joe,

to don't top-line we me, good to experience of much business the I opportunity look providing think balanced in an of exists. how we are the drive at a want athlete way, how profitability. we look want at because to and to We

channel. the then, at look are we we have We of will that profitability sales to still optimize. against So balancing But the very from the opportunities continue with to the business. pleased expectation

Joe Feldman

there. stress. sounds then like it lot about good much so Got follow-up, it. quick about just know you one And share footwear just in being so inventory taken guys much you've I hearing talked being pretty under a we And position. But, keep

the maybe allocation, the on presumably, Thanks. a with or share you footwear could better us? normal So seeing are getting you side you're that what

Lauren Hobart

Yeah, have in this connected have we have into access membership, And in our market totally Joe, We've had transformed than the higher we products we increased of fact tapping our the strategic to this to decks. we athlete that the with for serve stores. we in brand partners, also our before. now service due Nike we've footwear increase way share heat even the number footwear relationship footwear I footwear think you're and that the premiums

a getting better than we're allocation the we yes, past. did in So

Joe Feldman

luck That's guys. holiday it. the and Thanks with good Got season, great.

Lauren Hobart

you. Thank

Operator

over back closing turn gentlemen, Hobart, I'd conference like concludes to question-and-answer and session. this ladies remarks. Lauren to the for And any our

Lauren Hobart

I your everybody, holiday in you you. year. Thanksgiving. early a hope we'll you season. Happy wonderful DICK'S. you, next interest for And have see Thank Thank

Operator

you. Today's now attending presentation. you Thank thank conference today's all is concluded. We for

lines. You And disconnect a your have may now day. wonderful

DICK'S Sporting Goods (DKS) 23 Nov 212021 Q3 Earnings call transcript