DKS - Earnings call transcript Q4 2024 | DICK'S Sporting Goods, Inc.

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Operator

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the DICK'S Sporting Goods, Inc. Fourth quarter 2023 Earnings Conference Call. [Operator Instructions]

to of conference Investor like Gilch, to now Director Senior Relations. would turn over the Nate I Please go ahead.

Nathaniel Gilch

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

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

few And items. finally, admin a

reporting a XXXX. It's fiscal that was store important for XXXX XX-week year. First, sales a comparable about reminder note fiscal our to

XX-week results. year calculated these been comp comparable and Our metrics the exclude XXXX and week a our sales calculations Thus, basis. XX-week on XXXX both extra fourth quarter from full have

store revenue our fiscal XXXX, GameChanger we business. comparable sales to calculations include in from Second, are revising beginning our

we'll playing in starting discussion be our short key points. also a remarks. remarks, sharing of end advance Next, And of Navdeep's to slides support video prepared be visually we'll toward the prepared year-end

XXXX. future XXXX for results are XX, scheduling tentatively quarter first purposes, earnings to on publish finally, our May we your And planning

the video. play let's that, With

[Presentation]

Lauren Hobart

Good day a the reinventing during differentiated enjoyed to with it's the video. athletes; to lives. provide team proud create the are evident year, morning, we we've defining is connect we in of DICK'S you with history It's We year, these we the just everyone. we in to pillars, of through sport. a leadership life really DICK'S extraordinary founding and our our Through company deeply this athletes experience terrific most special past every sports for power of believed years our the change had and the their our I'm for really actively been marketing brand; I our efforts. Since bring creating our this And how future. hope XXXX, products XX far teammates. strategic our position. importantly, offer; and extended

our athletes, clear healthy, sport for they of comparable increasingly DICK'S lifestyles and record transactions We active and continue as record year we Sporting share. year, new highs Goods database. our full On the our that are during nearly these by X increased X.X%, in driven a basis, sales to we added and needs. to delivered million to athlete market athletes XX-week are the For comps looking leading active billion. $XX meet It's growth in priorities reached gain

X.X% $X.X our comp increased and comparable comps our XX-week X.X% last strong with and quarter assortment of industry-leading Including a to fourth our season. strong grew capped which billion. was holiday quarterly With execution, on a sales increase On year. year the XX, we incredibly top off X.X%, week basis,

a our merchandise On expanded than higher more margin driven basis, XXX gross non-GAAP points, by basis margin.

year. increase included non-GAAP comparable EPS an was the basis, of a $X.XX And EPS our of $X.XX, extra was prior margin the XX%. XX-week week. non-GAAP EBT Our for delivered which XX% $X.XX, non-GAAP versus we On

For to comps, positive productivity expect higher strong another margin merchandise and XXXX, grow and guiding our gains. and both we're through earnings to year sales

we're assortment well curated the is athletes. inventory and Our we excited positioned, about have for our

We of $XX.XX X% to expect to expect the to to EPS in range our of in our X% be be and the $XX.XX. sales range comp

to continue We're redefining future of excited the retail.

With the of share gaining $XXX our success store, increase growth drive initiatives, to we billion continued will this both in and our digitally fragmented continue capital business forward, industry. our market investment and in

XX,XXX, A which is typical share greater square compelling store; of of unit Golf House our and our House most detail Sport, our the key growth repositioning portfolio, of XX,XXX foot completely Navdeep Performance this on driver DICK'S including of Sport's economics. will revolutionizes Galaxy Center. next-generation

thank strong At make DICK'S, exceptional another of we who business. dedication I'd their it's all and our is for and hard us delivering like possible to people none year what and our to great, team. our passion, our accomplished teammates without work for

financial our strategies, deeper to detail Before our into call I'll first Navdeep results, growth allocation. and outlook I XXXX more go capital on turn to share the over

Navdeep Gupta

and everyone. Lauren, morning, Thank you, good

Let's begin Consolidated our year full XXXX XX-week year. from $XX.XX which comparable X.X%, to increased comps $XXX which and increased to was included XX-week market of a the with highlights results, billion, million week. XXrd basis, some share. we X% a our continue gain sales On

and increase Our ticket. a were driven a increase comps in by X.X% X.X% transaction in average

have offset margin due . XX was entirely margin basis from This This XX full our which XX.XX% To increase last chain of XX supply for basis, of the been was absent $X.XX points, leveraged driven basis lower from was be non-GAAP points. or gross points was a net merchandise billion flat. by headwind basis sales, increase year. higher costs, On lower of shrink. an which clear, year profit the to merchandise by would partially shrink,

to non-GAAP per comparable compares per per $XX.XX a of sales, diluted delivered from Non-GAAP and share basis. increase net or $X.X XX-week non-GAAP our on share EBT $XX.XX. This share XX-week diluted an On a XXrd basis, we of in was earnings a earnings $X.XX X.X% diluted non-GAAP billion $XX.XX, earnings to were of XXXX, included which week. of XX.X% the XX-

our awards the diluted during tax than you by of year. was favorable the XXXX share tax This rate by impact positively driven our exercises remind employee vesting compared earnings $X.XX the and per impacted lower of year. rate to prior that will I typical equity

have resourcing while also well our center, we we primarily and of critical customer our outdoor on the our second actions half overall as organizational included in This specialty as structure, the support to continue our actions better our spending optimization took design XXXX, change strategies our support business. during calls, discussed streamlining our growth, organizational to cost fueling structure. prior our to most long-term As align of talent, at and of

operations about decisions Public Lands and inventory our into go-forward made assortment outdoor we with this, of expectations. of part integrated prior Moosejaw the As consistent

to we our our specialty Additionally, conducted portfolio with outdoor store of comprehensive respect business. a review

our We charges year share the the in completed were quarter. included review XXXX. we total, of earnings In of during per business optimization full fourth incurred diluted These pretax $XX.XX. our million for $XX.X GAAP charges

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

Now which the also moving for QX, results our to included extra week.

pleased in period our increase a this on million included the last Also We company. to $XXX a which was increased X.X% increase a XXrd same basis, X.X% the year. comparable $X.XX On XX-week the a to top sales the billion, basis, of of very are quarter from largest comparable in consolidated of comps XX-week week. history X.X% sales the report on

to X.X% of average due the by our increase our on we business pleased comps performance of outerwear modestly with Our a strong driven in by flat were key holiday ticket were portfolio, performance warm categories, Within very transactions. the our offset weather.

on of of costs On lower XXX by line QX of by partially costs. XX QX sales, fourth sales margin increase net well Gross chain with basis mix. shrink a our our gross in XX.XX% last merchandise and expansion driven points and points driven in basis was year. quarter line from improvement offset leverage sequential in expectations. prior or This a was margin XXX higher expanded as non-GAAP quarter. basis, $X.XX was billion of in supply with primarily compared quality merchandise by year-over-year This favorable occupancy margin to higher and for was approximately the basis expansion This profit points, as assortment and was

increased and to last non-GAAP deleveraged basis compared basis, XX.X% expenses sales or points $XXX.X year. million On XXX of XX.XX% to net SG&A a

have sales year-over-year from gross by XX.XX% fourth we EBT the rate, from strong our X.XX% This of Driven higher fourth of and XXXX. the non-GAAP in net in hourly sales $XXX.X these our to of in million, and quarter quarter investments EBT non-GAAP highlighted optimization by as to driven or up net on is Savings was create sales. in well deleverage actions margin, QX helped million of prior wage experience technology calls, $XXX.X offset in was as and As our business marketing. athlete throughout talent XXXX better investments investments.

delivered on XXrd basis. week. we per earnings an share from of non-GAAP XXXX, the $X.XX quarter On XX-week XX- of comparable non-GAAP compares XX-week diluted for per basis, our to a in This $X.XX were a of a In diluted earnings which per $X.XX. earnings non-GAAP diluted share share included total, $X.XX, to increase XX.X%

optimization. During the were our quarter, we $X.XX. of included These million GAAP per $XX.X in to of charges earnings our share related diluted charges business incurred pretax

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

$X.X cash QX of with credit unsecured billion to and facility. no looking billion our We Now sheet. equivalents ended our balance on and approximately borrowings $X.X cash

Our been. ended our it's compared amongst last ever clean clearance to And year-end well inventory the in increased is and positioned. year. We the year fact, inventory our levels X% believe lowest penetration

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

grow by in invest this, is billion to reposition XX% to billion. as gross as profitability. optimization the improving we to to modestly, expect as benefits the line reducing are by results. at sales and anticipate merchandise $XX.XX in from ongoing to expected of comparable SG&A productivity driven approximately deleverage leverage to expected are discretionary modestly range and midpoint. We sales outlook. margin planned the be to XXXX, store of the at actions. with anticipate be growth In compared margins in non-GAAP our to our moving focus results, expand range the XX.X% $XX X% and XXXX sales to X%. well offset business we occupancy expected margin EBT expect non-GAAP Now costs to We be on XXXX expenses portfolio. Consolidated to we both Within

the to year $XX.XX. share anticipate to $XX.XX per We of full be diluted earnings in range

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

we point that few out results. comparability we things expect financial model XXXX, a to our want impact As of I to

XXXX extra in a will that create keep the First, week calendar. mind in shifted

do We results, our shift result, with XXXX. XXXX compare sales when a comp report not X impact week to this week on we comp for expect XX we material X year. have As the through in XX will through sales a in full

shifted the However, reported with by half first expect the offset we half. sales our be second to impacted calendar do in an the in positively

During House investing first brand we support campaigns of grand our Sport the openings. as well quarter, in several be exciting will as QX

see this exercises. gross vesting QX anticipate meaningfully XXXX tax QX, equity We impact rates in of in And finally, reminder, which impact driven will of recall QX. higher in normal, a from to as rate we starting was Next, XXXX. not the than shrink margin will an anniversary do our favorable lower and our awards by employee again unfavorable we that

top said, allocation our to Lauren now our our increase our business XXXX, priority. remains investment in forward. I'll Investing drive priorities. to capital discuss And as drive business organic in profitable we capital will our growth

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

be along our stores, will in investments to we As in in continue improvements supply our with concentrated these growth, technology expansion. reposition and and existing relocations ongoing store chain investments portfolio,

sale-leaseback also Our are XXXX of related we plan Sport, House certain of estate potential for real opportunities. includes CapEx to which assets purchase evaluating

House eight is concepts most we the expect today. XXXX, of in to one retail new Sport locations. of in exciting open And

of or As new with we DICK'S stores, elevate our conversions one Boston. Prudential are along Center relocations at in planned store of existing store these portfolio, seven

XX approximately are House open expect Sport scheduled locations to that throughout XXXX. We of on construction begin to

open stores DICK'S also XX,XXX will next-generation XXXX. XX We in

X of footwear of taking our new XX existing part we elevated XX athlete locations. or XX% into we nearly Across premium As appearance DICK'S this add will innovative our approximately stores full-service this, footprint, DICK'S to new this and open decks, relocate locations. will remodel format

business Galaxy we open grow XXXX, excited are and footprint Golf locations. In Performance Galaxy to the also Center our XX to plan of Golf

Galaxy existing new As Golf relocate remodel new of we Performance part into this, five open this stores will or format and Golf locations. five Center immersive Galaxy

our increase significant square we XXXX. investments, marking by these since footage approximately most XXXX, to our Through expect X% in expansion

opening DC a construction of in will Lastly, distribution an XXXX. business. we role important our new center supporting on play new the growth in This begin long-term regional to plan

these want why I DICK'S the to Sport so we locations. are continuing, share investments, our of Before next-generation and excited especially House XXk about

of a As margins. approximately strong you EBITDA new on target House of will year and omnichannel $XX a million Sport, see in expect for in profitability with a X, the very we sales XX% approximately slide,

XX%. capital, In will about CapEx million House cash-on-cash location, terms take it $XX.X net open resulting year return of in Sport a expected of of of approximately an to X

attractive next-generation of in DICK'S million omnichannel EBITDA XX%. year X approximately $XX XX,XXX where and store margin approximately We from we our expect are comparable also returns a sales investments, targeting

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

billion profitable $X continuing our of to while business. growth returned we in XXXX, long-term shareholders to the invest During

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

Today, XX% that is the year payout and $X.XX increase dividends year have an per top from a we shareholders dividend marks increase of basis. our of XXX% benefited on in increase. quarterly announced our a consecutive on on quarterly an This a or of last $X.XX annualized XXth share

our In addition, expectation of in included our share guidance. plan which includes is our XXXX $XXX million, EPS repurchases for

at we will optically additional look repurchases year. always, throughout the As share

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

Lauren Hobart

Thanks, Navdeep.

product sustained XXXX, is our a experience, profitable experience on teammate differentiated providing the curating As and engagement by brand. growth within the with innovating driving focus and athlete to a omnichannel deep assortment, turn driving best-in-class compelling we DICK'S

a of foundation next-generation Sport curve. to future strength, DICK'S ahead by store. innovate continuing Industry part repositioning and growth year and for engagement experiences this strategy portfolio our mindset, athlete a and of of the themselves is our leaders drive house from of positioning years consistently our omnichannel this key With through XX,XXX

House a redefining our engagement are delivered brand sports powerful results. typical our Sport, highly farther XXXX, we are partners strong financial and and launched first this Compared very communities With of athletes Since DICK'S experiential traveling with truly has to destination we in retail. location to the visit athletes, has and brought are providing unique store of emerging engagement it the House brand they the assortments, experience visiting time at House spend Because of expanded platform and our Sport, increasing Sport, as brands and to in and frequently. new national see partners for more of while access a growth. store,

open, opening total a Sport XXXX. of we locations locations X With now look forward to another XX House in of

Next month, town Sport home Pittsburgh Downtown Boston. in House in and to we a our are Prudential so at Center of open excited the of

We marketing. will support these grand high-impact openings with

our Navdeep outlined, story. economics a compelling the future growth part House Sport of of With is significant

into by vast of DICK'S said, stores As have House The existing relocations between of House we we or XXXX, to conversions country. XX these to the locations expect majority XXX will be across of of Sport Sport.

continuing most innovate experiences foot has XX,XXX XX,XXX, store. our and Inspired of typical with our we're the great assortment elevated this time, Sport, service same similar by model, square which store enhanced is completely expressions, the next-generation revolutionizes a House results. format delivering and At DICK'S visual and premium to

XX,XXX will is We our of one-two of in the to serve open locations stores opened the House in athletes' Sport experience. are another of our XXXX next-generation hub locations for XX next-generation This DICK'S punch and XXXX. and excited XX future omnichannel our and XX,XXX as

Golf over we important grew Galaxy Golf locations. of XXX footprint is our year, This Galaxy part story. past to growth another our

Centers, levels. Galaxy XX golf With immersive enthusiasts locations open XX which further open, grow As now throughout another performance footprint to experience an we're excited offer all Navdeep through to said, of Golf centers Performance XXXX. for our we plan

a spring, marketing way and This the we're elevate and investing market Golf in to in Galaxy share drive perception for relatable brand golfers. memorable

long-term XXXX, U.S. growth and played an a we compelling opportunity. golf the all-time rounds During in golf hit is high, believe

critical it's success, of drivers brand mention about strong our talk we When to relationships.

partnerships, differentiated destination and product. assortment, industry-leading making strategic our DICK'S built these the With go-to for we've on-trend

emerging with DSG to invest and our of our time, profitable portfolio At partners new powerhouse continue highly make seeking we will with big the in including work meaningful traction gaining and that CALIA, to while We'll continue actively brands, our VRST, brands. are also athletes. to bets with vertical same

on brand is as expect brand as This vertical CALIA a Nike, through uniquely For collection. versatile build most We're with the women's strength behind success launched of we our and fabric. features campaign Inspire DSG, our our that this which collection largest yet CALIA, supporting to focused the second-largest we With on innovative performance a positions our recently brand, campaign is apparel QX family, that an new only always-on launch important beautiful. approach and value an embodies sport.

Our us see omnichannel continue to are spend frequently digital athletes success, capabilities and core omnichannel than our more to growth and in we to our athletes. also single-channel with more shop

we part XXXX, the our our to dicks.com quickly. continue As for teaming to it A-list of capabilities campaign a up and look some in products getting with And memorable. we're humor make really marketing throughout to of very we'll rapidly hands this, celebrities athletes where through drive consideration advance adding into

is leadership capability As multibillion-dollar GameChanger, our we highlights youth in of a grandparents has a the and and ages. strong technology for become digital stats fans we to sports, all sports games, track have, a pivotal leader expand of incredibly for in millions athletes youth video GameChanger role. another plays go-to parents, market. watch position share destination It

games X used create GameChanger clips. highlight XXX year, over to X million Last million from teams and moments capture million

of Major GameChanger the In month spring League more played a games Baseball. in covered history are have than in single fact, entire on been

profitable sales at over a a Service changer revenue, Game As since XX% XXXX. is a and Software grown CAGR very platform, has recurring as

year. reach in sales to million this approximately We expect $XXX GameChanger

over than Sporting scorecard A typical of who has Xx also are DICK'S over year and visiting DICK'S Importantly, customers a sales. scorecard more a are numerous some member. opportunities unique most ways GameChanger valuable Goods the times DICK'S loyalty DICK'S to for brand to GameChanger families believe per authentic and app customers spends XX customers. these in there reach With month, at we customer drive a

in lives, what Change work are continue the At our brand connection. power resonating way you'll the who our second and and we brand-building sports campaign, Lives this communicate the NCAA stand with increasing In change first sports of creative the pleased for. through unequivocally with Olympics have will athletes to the moments objective campaign. we to believe Sports new to and results Lastly, and campaign the during is we NFL our invest games. like DICK'S, we the Summer and see DICK'S with is high-profile year year this expressions tournament, We're

upgrades House we conclusion, In future especially We're progress approach, in continuing sales share to the satisfaction and XX,XXX and driving very and our innovate optimistic convenience of existing with advancing and us. further accomplishments opportunities are our We're gains. and higher the athlete in to Sport, ahead of which about our our and XXXX, pleased enhance extremely results experience. next-generation our market our to footprint is omnichannel improving

about working across of distribution our Our business team, future our excited I'm have such decision I'm team. XXXX we every so clearly a proud centers, investments teams, be our alongside in to to motivated and talented the GameChanger future. our incredibly stores, company, from and and our our to corporate part to our group demonstrates fuel the up growth step in our to to confidence

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

Operator

Gutman first line Your the [Operator Morgan Stanley. is Simeon Instructions] of with question from

Simeon Gutman

Sport this earnings the of well? think business you and question looks as The it Curious margins now should think going thinking House growth? and in about sound growing Or a this growth should about we you have both point coming going and the margin. how forward. very margin it's is to rebased, and margin we the Are positive from growth story in, first to making which terms on forward. business of My like about

Lauren Hobart

Simeon. Thanks,

X.X% And about the growth excited our margin QX then this that just the top in year, incredibly driving of are we business, with We to are of have overall. a looking a comp in comp. off on line, forward X.X% momentum top we and coming profitability

the access really in product with have margin think I key it's having past And able just of this that and us environment, be enabling a we fairly store XXX of to. gross margin. to promotional. basis the is and also the differentiated resonating actually, without And of newness extremely navigate, QX, driver drove innovation where athletes, energy. is we promotional access expand and story to over feel the continue That were it's a navigate we to And points product to creating to

it really brand and experiment. immersive rock-climbing and partners, both a a in Sport of We and great our and our and encourage our and field deeper a that it's But service space a provide completely strategic access products. presentation. House a from more and new We've emerging of and bring life is So does enables can us us to partners, drive a lever for enabling Co visual margin of different brand way, new to to elevated brand therefore even got and partnerships athletes. Sport to importantly, partners Lab whole in standpoint, exciting to in bunch tracks experience House walls our

long-term the about confident very overall, margin story. So

Simeon Gutman

I Okay. can it And like paraphrase, the paraphrase, the It's be want a and combination future, it just of margins dollar don't expand to about but sounds as in not earnings follow-up. well. but growth. I'll my margins But growth,

share CAGR? years? think how we market you some normal the we the for you it's But should market growth do and industry -- the just CAGR we growth And about benchmark don't can assume do industry several grow. how that you about thinking And sell, clean is, follow-up of see grows? a the for industry what are my then categories reaching among industry the And because XXXX that for type and next share hard

Lauren Hobart

Yes.

experience; we've pillars we're with doing to industry, is strategy it about, talked differentiated that the really and athlete our experience, in So investment doing We're teammates strategic because this in brand teammate investment asset incredible that in ways. is to have gain our and incredible products; best the and our we continue be an have momentum. our which it that we they in our market several have the in the share business,

we're going XX the coming look super we're share of So such and a have that experience, at we Sport new new exciting portfolio market takedown to it's prototypes House when which -- of XX,XXX House of We're reimagining growth, place. gains. Sports really also XX from is a and of our our

not So because to on share. momentum drive directly, your think to answer we question counting we're a significant we amount growth of category so much have

Navdeep Gupta

I'll mean, build I said. on just Lauren what

it, at XXXX. industry, we look over and $XXX fragmented. really you core XX points our are today And reiterated which it's what overall If billion almost well, our working actually strategies right, share of is basis highly market gained is we

core exciting our results as are posting core as are about those the strategy and strategies really the athletes. So we how well resonating with

Lauren Hobart

year, in incredibly income the I'm growth held across didn't saw we saw we saw has see to better, up trade-down all We best going well. all last is that from last to Navdeep's better to to good. We comments, add which thing demographics. consumer QX, where it one a

have So their consumer, choosing needs. are a meet to increasingly and we do healthy DICK'S they

Operator

line Your is Yih Barclays. Adrienne question of the next from with

Adrienne Yih-Tennant

great, the on and really execution. quarter phenomenal year, Congrats the

of this versus kind model? they the describe The higher guess, can goods DICK'S? that like I you they're core is differentiated of that exactly are touched sound How So Sports What earlier. primarily know I of much of revenue notion to best. services? stick House the I on Sports, of exclusive core. goods, and in and than X-wall But Lauren, you is the the how assume the I'm House better And then the from -- EBITDA of much going sort with and is versus sort there,

Navdeep, across And my inventory for of like mean, landscape. then clean, kind the follow-up is right, I is, so

given XXXX? are discuss here. for the potential talk of sort you're and secondarily, levels in that level then of need inventory Can you replenishment, pretty can innovation trends and low? things And about you two So first the that seeing the

Lauren Hobart

Thanks, Adrienne, yes.

look you core coming to it's in a all are way. life House just when of Sport So at a store, note our important up even of that strategies dialed to

experience, the So access all there, differentiated fantastic the in a really coming product, model, our service is we to way. the life have

We've The the they're more product. service our think got frequently, driving per athlete what's majority how have more coming a overall, square who And of revenue is a to responding. driving business typical they Obviously, Sport. model. also they're when that is of a the still get it's comes foot House in really further, we spending time as from of revenue sales there, vast that but is higher. are I athletes And result

So it's -- our just really, it's core model, business really elevated.

with the for start about Navdeep, the XXXX. you answer to just the asked and question I'll the newness innovation

say, right if really are And go our I We can into would you excited. set. stores now, you see spring our

sports, the reacting the pike to. team on coming very well are the and about innovation people we down the are very hot are our well really access reacting increased as to as the -- and the excited hardlines that of softline can that see product side You some that's athletes

the turn I'll to inventory you it question. Navdeep, for

Navdeep Gupta

for the Adrienne, question. thanks

inventory overall with the inventory the quality So we finished XXXX that and pleased with. of the really

sales. strategy core top competition. the and just our tenet results about well a continue as inventory versus our what differentiate X% Our X% the is to inventory this And grew on focus growth morning, is to us and of have we of a company, is that reiterated core positioned a that of our allowing that and in clean we keeping

national Lauren XXXX, to for also from our of innovative And available and said, only newness not but of from brands, much so in the us expectations is there emerging terms market, like the in brands. the

the spring the XX,XXX into it the excited about really assortment in stores, we more well see next-gen Sport looking coming So and into deeper of assortment as in and House as both our locations. that

Operator

of the Chris line with next Horvers comes Your from question JPMorgan.

Christopher Horvers

to So some together first is that pull of the commentary and had. trying questions question already different my we've

how P&L? As the And do trying get occupancy How it's X-wall about what the you then EBITDA does margin? merch store? EBITDA cost sounds Can you other actually And the to -- how you for the think lines that about cost that think operate XX% the X-wall about breakdown -- to margin. you the about both box? gave of Is In in higher. -- the does higher? It talk the to terms understand the like margin compare that concepts. to EBITDA existing to

Navdeep Gupta

for of economics sure had has wanted that as first to these to we really behind Chris, something to the to store. economics. well make a time to enough House excited enough requested the This our share be has location be XX,XXX, Sport us as able all, share our able we of and been next-gen Yes, while, of been maturity but

So Really these to full stores maturity with positioning the all, House line top that our top awareness have locations basis, and first let's $XX omnichannel The of almost great the next-gen we on almost opening to brand of because in sales markets. the are start brand at strong in and the of about million comes an see, a line. when million Sport about it $XX open XX,XXX.

interplay a the the it have think both you that I expect, called out, a that as between can comparable that And bit of margin and boxes. these little SG&A. we between an like margins happens there's And EBITDA you

so that. service comes there's of the from elevated component margin you of this, therefore, with a little provided get more a it. also little level a bit a You have being so House experience revenue of and the locations, is higher of But with in service of Sport bit there bit associated a higher the little

operating that putting depreciation. out and capital occupancy. a the and we I think with are at say you when so or strong very, into driving, the look -- that rates that the into investment I little happy these very we EBITDA you There's both a bit -- would we the overall, of are that just called we profitability plays are the that more But margin are that out returns it, we are boxes. driving of the delivering

Christopher Horvers

it. Got

margin returns end said are it's So to components is the different, you and share. you day, continue be the sort the And comparable think, this I gain might next it to earlier. this succinctly, at but -- the continue lever allows to Lauren, the grow. basically the to of opportunity of and It's

Navdeep Gupta

long-term been community. athletes and I better how will are as with we this with on us getting Goods. our consider overall of true to the is see allocated the more experiential destinations. brands come really, have with having partner what we a but emerging the And what partners, not DICK'S concept And a with Sporting resonating to that available that's of is saying, really only differentiation returns in well want what these to that even our getting is what us build differentiator us, driver great, also better brand and the we Chris, Yes. access, financial is as product

Christopher Horvers

expect still those gross investments that's headwinds the margin. you Would the bring to Understood. So just and you you is the around SG&A? That's terms first follow-up to just could point going is, that Navdeep, thinking up? all quarter. certain a first about in quarter. be maybe Maybe my in talked affect And you particular about be about some of there very helpful. a maybe shrink And way is the finer how together? -- merchandise margin we And there should the talked

Navdeep Gupta

Yes.

few comments a gave out in So comments today. our prepared that we

We're an will the a calendar, to to sales, I'll right? not a sales be all, there comp. start of you total around line a significant top a with little but so bit when total basis impact on revenue, First have think shifted impact shifted going of our

of was What reminder, in shrink a levels call QX XXXX. we did elevated we out of just the saw

So we as in yet. that QX, haven't lapped

you that modeling, are keep helpful as So be in will all to it mind.

is rate. other tax the The

remember, was significantly play well. and QX will out that as you rate see to rate, normalized tax compared If our in tax piece low our you

that have our finally, of watched collection, our have hopefully, CALIA brand right now we you the exciting campaigns campaigns some brand And all campaign. of launch associated dicks.com with our on between going Inspire

we are into investing so And that.

Prudential going House here Center. Park to here and at opening In Mall addition, be QX really two in Sport exciting locations we're in between of Pittsburgh Ross

see in the investments well. So of those associated some you with as two QX stores will

just point that a on put preopening maybe a expense, levels one. So slightly elevated I'll of finer

Operator

is Goldman question line of McShane Sachs. next the Your Kate from with

Katharine McShane

detail fourth apparel quarter. in wanted of about the there if hardlines ask versus versus on was I footwear the to more performance any just

the there was for of impact doing was, any guide as relocations that question second result our a And Sport. XXXX to the of you're if comp House

Lauren Hobart

Thanks, Kate.

X.X% quarter, of growth this past comp categories. saw terms our all with the So we category across key in of performance,

hardlines some the footwear, growth in key growth So growth and in in of apparel categories.

So in really it really softness across area growth categories. outerwear. But softness as would, the was our some only weather across the we was hoped it and so of strong come board, in board. The was the there didn't core had cold

for question. turn next I'll Navdeep to the it

Navdeep Gupta

you the Yes. no Kate, calendar, shifted when like the guidance, cadence of said, comp in the at of to overall, itself terms impact because material we comp look it.

half mind, into in which last combo during converting keep last the locations House year, Sport we were of eight of year. first closed However, were

our the the in stronger we be year. So to comp first slightly the half the expect of half in comps than back

Katharine McShane

relocate any there But this closures as from impact store won't you be year?

Navdeep Gupta

not doing as we did the We're closed remodels last No. year.

Operator

Robby from Your Ohmes the line next with of is America. question Bank of

Robert Ohmes

economics. thanks and store couple that. Can positive? quarter? a on sort digital quarter. of fourth in us commentary fourth transactions sense of of appreciate just Were A you transactions follow-ups quarter, in-store all for the Really Great the give the on transactions in-store versus the

Lauren Hobart

versus in-store from Robby, thanks the ticket. quarter, guiding question. transactions fourth overall. In growth of most We're to not came flat the for digital and were the

However, QX that, X.X% we it's up important really were in note in to last over of transactions. year,

not really that. detail in strong X-year business a more growth Digital but going really, get standpoint, omnichannel remains basis strong, than to really an into So we're on from transactions.

Robert Ohmes

the should And then comp -- just for we Should we for component? versus transaction guidance ticket how giving think about the XXXX. you're

Navdeep Gupta

any is a growth be that further. a focus Yes, continuing profitability from on last for guide -- our Robby, really And to on to positive down sales the break business. I'm basis be excited X.X% year. won't able driving top of we comp about about to and

Lauren Hobart

transaction you the Overall, -- growth this of have X.X%. come majority we if from growth, at look did the did year,

very comp guidance. confident in are we So our

Robert Ohmes

quick one clarification. just then And

House say fulfilled omnichannel models, store store that's store? that gets guys sale for -- economic -- -- new included call sales when in by the to the the Sport of you it On it what omnichannel sales, the or a is at XX,XXX is a web is -- it

Navdeep Gupta

It's that's omnichannel athlete an included because that store, the the an stores the store only of fulfilled that are also omnichannel by the in work X-wall sale are in gets our order. that's or that that performance not store the sale including members is an digital Robby, team that. what we fulfilling doing look as from with exactly Even No, a walking a fulfilled Yes. in.

Lauren Hobart

over Yes. if XX% of board, orders And fulfilling XX% are e-com the brick-and-mortar. the of orders, stores across you include the

So it's appropriate omnichannel to as think of sales. it

Operator

next the with Your line Nagel is question from of Brian Oppenheimer.

Brian Nagel

quarter. nice another on Congrats

Lauren Hobart

Thank you.

Navdeep Gupta

you. Thank

Brian Nagel

-- lot have, I back that ago about a were just we go question it talking long to First wasn't shrink.

seems today the shrink? getting looking question you've results manage should at job a the trajectory how shrink. are the ongoing thinking that mitigation commentary, arms to we're of XXXX, I shrink your Looking nice at kind or into it done is, in though be The as now about efforts have as we around the your in DICK'S

Lauren Hobart

shrink for that In we inventory we do doing QX, are against put forward. We've that significantly an QX are note we that last that up didn't more appropriately of reserve believe pulses fact until to going reserved year. have the feel end headwind shrink. in Yes, Brian. we I extra of we reserve Thanks, the still appropriate the it's important do and been the

working lot of shrink. the local store to the to enforcement are store well high doing as We're a loss But of in with law moving prevention that back we're as and things overall, products mitigate.

have we appropriately on. we going overall, a lot But So reserved. are

Brian Nagel

a Got But the question, just prior with this to it. regard follow-up to growth. bit a And then question. is of, think, I follow-up my transaction

amongst So job and you DICK'S so. driving most has transaction retailers growth, here doing done a out phenomenal clearly stand

the all. understand there departments, anything recognizing drivers and You're merchandising variability But that? type can the that you of of the we within sustainability of across happened get and you better, any chain, understanding of maybe better that growth? business of help the transaction underlying is of Are so in the have kind kind changes us all seeing a

Lauren Hobart

about we based make power athlete of to when or on shopping coming of continue top is I that there. things the they're I team and And very think and do and the really much and product our sports. our brand that think talk stores, the values, that satisfy, really like are that, so transaction access fact Brian, with team then experience, athletes online, the has in our growth are But much brand to progress we have. making into great a also, the is differentiated our striving omnichannel we that to -- our

So all transactions. and of strong are together those working things driving

Navdeep Gupta

new fact quarter that, athletes X look gained fourth quarter, in the in to you million in we gained million at add I'll we alone, it in Brian, And fourth Yes, new X XXXX. and just if athletes. XXXX

work well be able of is discuss and athletes. store our to resonating Lauren's our go personalization back features athlete having in program, and very and availability as to the those database and the to right addition ability the product and So type doing we that point, product, been in around we well have have, loyalty that address our the to scorecard with our

Operator

line of Kernan is Cowen. question with the from John next Your TD

John Kernan

year. another great on Congrats

next-gen sports, opening the stores they're comp for do think you and do How said How if of they beyond, about in I XX,XXX the both contribution at House the think year and we contribution open think about foot of House comp at maturity. Sport the forward? we X maturity? going them, square

Navdeep Gupta

second question I And questions. think one of the as with that year. second start John, of contribution in the look a there, Yes. been in comp at we that's the I'll X-part terms the has so the part growth

the are we very and results seeing. in are confident optimistic that We

our year XXXX, in two posted actually sample. comped second of actually stores in first are XXXX So was, all, again X. have opened There comp They that don't large they full year. what XXXX. sales and in stores of saw the have were a we growth we And

with happy overall the really So performance.

million of about an we are that terms that a somewhere let's $XX goes as omnichannel XX,XXX million the comp the to to a sales, million going say, excited really we when well. contribution are relocating, or closer In XX,XXX to that's $XX the comp to so contribution from box $XX opportunities and

Sport didn't add differentiated that us is cascade are that seeing these location, overall I if of through that stores remiss be DICK'S get to the -- the portfolio we performance continue able normal out would next-gen or House to I and those. product XX,XXX through down we to innovation things, the us -- to well, allows then or stores into the are that newness and elevate the into the our allowing as of and And

John Kernan

guess just more shift helpful. a level. category to That's my I follow-up, of

it significantly from going think see all this increased as gotten to think label where it's be I the have terribly offering clearly has different historically, we vendors not the around from private year. well. The of apparel, better. allocations that It's I was Softlines, XX% can footwear, business but

expansion contributed to point. pre-COVID we all think think has since be levels. in elevated at the categories as merch of margin merch XXX softline this this points future should basis seem I How margin? Particularly about to

Navdeep Gupta

Yes.

And you that, So the would of biggest the confident driver we overall John, at the composition margin our it drivers. the to when I look product to of -- that continue say that versus biggest will be be are expansion XXXX. merch the of one continues

actually brand. vertical have about CALIA you've is brand we work. the We that now of is that launched other in we in of The excitement XXXX. here launched really Inspire terms DSG lot kind athletes. two well drivers message seen a an around we of some product our DSG hopefully, brand And a recently have The our about always-on internally resonating with work talk the the that

brand is with our vertical softline well the So product resonating really athletes.

optimization the capabilities promotional basis. continuing we as So And as are into -- recent have of the our goal the constantly on well. the well with pricing as in moving go-forward forward and years $X we lean the some that we vertical big elevating to a will be driver another long-term that and of towards finally, brand optimization look billion margin

and differentiated product. So things about we confident we'll into the leaned really on, continue the lean same to have that

Lauren Hobart

-- here. it's -- a also the across board. It's softlines story it's isn't John, not just there

We are gains on portfolio. entire margin focused across the

Operator

question Telsey Advisory the next from of Joe is Group. Your with Feldman line

Joseph Feldman

coming a wondering from. the well. And share gain Like you could share that just I you may some thought be I'm is was and maybe Great seeing so curious, could share mean, that to little quarter. on execute thoughts continue you you're there. I if more where guys it --

Lauren Hobart

Thanks, market providing. I due to reimagining the gaining of our mean, experience Joe. portfolio, experience, share we're differentiated the our are we

continue lot a we And of will from get to coming differentiated it's believe continue as I access it places. think to come. product, to I

Joseph Feldman

of regard it. do it's to guys. And tailwind just of -- Got I some network And also, unrelated we global have the going of kind what's with in those you then But you that? a have -- costs does supply with the seen quick of kinds issues, Canal and things? freight, follow-up. any sort pressure a When all chain to been Red lap on future related Sea, for on the Panama

Navdeep Gupta

Yes, Joe, freight. like saw you called the XXXX, from we tailwind out the in

any are look continue right overall, situations the great are right XXXX, or your kind monitor feel we not we position, situation world across have point, definitely evaluating to evolving to and headwind But about evolve. we'll how now. As the of tailwind the But the inventory now. overall expecting that to we we we

Operator

of from question the Warren with next is Evercore ISI. Your Cheng line

Warren Cheng

of [ decks ] a rollout the on impact I the shift the newer couple floor the dimensions. the will and to wondering assortment also was how concepts of

aspect. sounds going question, newer So penetration brand brands build concepts? up some first, if earlier will out the on global you like, think versus about an that an here. own sort vertical to is how from go you of to smaller global the brand private that big mix label, or the your answer brands from skew of Curious as It

Navdeep Gupta

Yes. we is the the right? board, say, across partnership excited, with I Our all-time are an brands would high. national Warren,

differentiate only levels, service within stores. we our provide to but our continue experience We not the that

of And the brands, in to want national all be rooted sports. them

that of So assortment product bring a nation, full life that their to only can not are to across that. partner bring we the when that they can the actually for but destination breadth across look bring and life, to --

the level to newness of our and very stores. strong innovation that is a continue and into we interest So partnership coming and see

only of People emerging brands, with are also own partnership excited we deeper about Likewise, a see chain. opportunity HOKA to the our relationship and and to but that into these Free deeper some And we very not have Movement. brands the like On expand continue

our finally, done about And team work more that launches vertical excited brand that what have to come year phenomenal, we is is and XXXX. the has done the this in really

Warren Cheng

will also here. curious I lot also margins And the view latest where past concepts. the about moving view and give these ongoing margins on your There's shift long-term to this us you of wanted see newer and year. ask if level drivers as shape on a margins you can your that gross EBIT you normalized parts to

Navdeep Gupta

the Yes. said fact the providing what we leaning long-term the what are confident are not that going has we sales But long-term that laid driving in be is today, and have profitability consistently of into algorithm. Lauren are we the today. to and a delivering core we company strategies it Warren, is consistently out

positive execute in guidance comp posted 'XX. and to to continue confident to in we'll XXXX the strong X.X% that we So in on of a top comps we able have provided be that drive

Operator

line question final Davidson. will Mike from come Today's the of with D.A. Baker

Michael Baker

ask follow-up to a Okay. wanted outdoor on concepts. I the

process things stores those about thought history. on more iterations or changing down? you sort business count just your closing plan the there? talked bigger-picture you've And Are of But had is the specifics, there. terms couple there? in the You in of what longer long-term a store outdoor some What's term, restructuring of

Navdeep Gupta

about is we assortment opportunity an product the similarly to service, out can experience terms billion at When And macro a overall highly that know level, is is as there differentiate category. Mike, excited the TAM as of the we there. be provide. really outdoor Yes, at continue this we $XX look in fragmented that well to it you

done drive we've year in called to the that in actually Lands office did have to XXXX, actions And Moosejaw last we business of that that and what Moosejaw the was bringing investments able actually out Public the and the some have be operation optimization are the in what back of we made. together So acquired long-term we business. profitability we rationalizing work have

go-forward we long-term evaluate confident and business, remain Moosejaw continue really that in continue basis, are opportunity the confident a are -- space. to We but overall, in about locations, to But are outdoor the the we'll not on we segment. closing

Michael Baker

Okay. One quick follow-up. have I it. missed may

I tell the number. margin. build missed you it, volume us Just the gave to returns. think for hear the didn't and cash-on-cash Did I cost So costs, us much a it build looking the the sales stores? to how may and EBITDA the cost have XX,XXX you therefore I

Navdeep Gupta

metrics on Yes. Relations be return. net will Investor on these Actually, and capital the slide well Mike, preopening inventory, both there our that as in are then webpage, the both as the cash-on-cash investment, the

Michael Baker

Got it.

the so on I phone, Appreciate Sorry, doing the color. the that. call missed

Navdeep Gupta

flexibility early here. appreciate We on joining the us

Operator

will This for over call turn question-and-answer I Executive remarks. and concludes now Lauren Officer, Chief President the session. to closing the Hobart,

Lauren Hobart

Thanks, we give XX,XXX for your And Goods. in interest and out who are everybody, that teammates shout are driving really thanks to to reason incredible want results. our I Sporting a the these DICK'S

See all you you Thank quarter. much. next very

DICK'S Sporting Goods (DKS) 14 Mar 242024 Q4 Earnings call transcript