Dicks Sporting Goods, Inc. DKS

"We are incredibly proud of our first quarter results. With our comps increasing 5.3% and double-digit EBT margin of over 11%, we drove continued momentum in our business. Our core strategies and execution are delivering strong results, and we are continuing to gain market share as consumers prioritize DICK'S Sporting Goods to meet their needs. Because of our strong Q1 performance, our expectations for continued robust demand from athletes and the confidence we have in our business, we are raising our full year outlook."

First Quarter Operating Results

(dollars in millions, except per share data)

13 Weeks Ended

Change ⁽¹⁾

May 4, 2024

April 29, 2023

Net sales ⁽²⁾

$              3,018

$              2,842

$          176

6.2 %

Comparable sales ^{(2) (3)}

5.3 %

3.6 %

Income before income taxes ⁽⁴⁾

$                 342

$                 328

$            14

4 %

Income before income taxes ⁽⁴⁾ (% of net sales)

11.3 %

11.6 %

Effective tax rate

19.6 %

7.2 %

1,239 bps

Net income

$                 275

$                 305

(10) %

$                3.40

Balance Sheet

(in millions)

As of

May 4, 2024

As of

April 29, 2023

$

Change ⁽¹⁾

% Change ⁽¹⁾

Cash and cash equivalents

$                1,649

$                1,643

$              6

Inventories, net

$                3,201

$                3,034

$          167

6 %

Total debt ⁽⁵⁾

$                1,483

$                1,483

$              1

— %

Capital Allocation

(in millions)

$

Change ⁽¹⁾

% Change ⁽¹⁾

May 4, 2024

April 29, 2023

Share repurchases ⁽⁶⁾

$                 114

$                   58

$            56

97 %

Dividends paid ⁽⁷⁾

$                   94

$                 105

(10) %

Gross capital expenditures

$                 158

$                   85

$            73

86 %

Net capital expenditures ⁽⁸⁾

$                 126

$                   61

$            65

107 %

^1. 

Column may not recalculate due to rounding.

^2.      

Due to the 53^rd week in fiscal 2023, there is a one-week shift in the fiscal 2024 calendar compared to the prior year, which favorably impacted current period net sales comparisons by approximately $45 million. Comparable sales for fiscal 2024 are calculated by shifting the prior year period by one week to compare similar calendar weeks.

^3.      

Beginning in fiscal 2024, we revised our method for calculating comparable sales to include GameChanger revenue. Prior year information has been revised to reflect this change for comparability purposes. See additional details as furnished in Exhibit 99.2 of the Company's Current Report on Form 8-K, filed with the SEC on March 14, 2024.

^4. 

Also referred to by management as earnings before income taxes ("EBT").

^5. 

The Company had no outstanding borrowings under its revolving credit facility in 2024 and 2023.

^6.      

During the 13 weeks ended May 4, 2024, the Company repurchased 0.5 million shares of its common stock under its share repurchase program at an average price of $207.32 per share, for a total cost of $113.6 million, of which $5.0 million was paid subsequent to the first fiscal quarter. The Company has $665.9 million remaining under its authorization as of May 4, 2024.

^7. 

The Company declared and paid quarterly dividends of $1.10 per share in fiscal 2024 and $1.00 per share in fiscal 2023.

^8.      

For additional information, see GAAP to non-GAAP reconciliations included in tables later in the release under the heading "GAAP to Non-GAAP Reconciliations."

Metric

2024 Outlook

Earnings per diluted share

●        $13.35 to 13.75

•         Based on approximately 83 million diluted shares outstanding

•         Based on an effective tax rate of approximately 23%

Net sales

●        $13.1 billion to 13.2 billion

Comparable sales

●        Growth of 2.0% to 3.0%

Capital expenditures

●        Approximately $900 million on a gross basis

●        Approximately $800 million on a net basis

13 Weeks Ended May 4, 2024

13 Weeks Ended April 29, 2023

DICK'S
Sporting Goods

Specialty
Concept Stores ⁽¹⁾

Total ⁽²⁾

DICK'S
Sporting Goods

Specialty
Concept Stores ⁽¹⁾

Total ⁽²⁾

Beginning stores

724

131

855

728

125

853

Q1 New stores

1

3

4

—

—

—

Stores acquired ⁽³⁾

—

—

—

—

12

12

Closed stores

2

—

2

—

2

2

Ending stores

723 ⁽⁴⁾

134

857

728

135

863

Relocated stores

3

1

4

1

—

1

 Square Footage:

 (in millions)

DICK'S Sporting Goods

Specialty Concept Stores ⁽¹⁾

Q1 2023

39.2

3.4

42.6

Q2 2023

39.0

3.4

42.4

Q3 2023

39.2

3.6

42.7

Q4 2023

39.3

3.4

42.7

Q1 2024

39.4

3.5

42.9

⁽¹⁾ 

Includes our Golf Galaxy, Public Lands, Going Going Gone! and other specialty concept stores. As of May 4, 2024, we operated 106 Golf Galaxy stores, 7 Public Lands stores, 18 Going Going Gone! stores, and other specialty concept stores. As of April 29, 2023, we operated 97 Golf Galaxy stores, 7 Public Lands stores, 15 Going Going Gone! stores and other specialty concept stores. In some markets, we operate DICK'S Sporting Goods stores adjacent to our specialty concept stores on the same property with a pass-through for our athletes. We refer to this format as a "combo store" and include combo store openings within both the DICK'S Sporting Goods and specialty concept store reconciliations, as applicable. As of May 4, 2024, the Company operated 19 combo stores.

⁽²⁾ 

Excludes Warehouse Sale store locations that are temporary in nature, of which the Company operated 34 and 39 as of May 4, 2024 and April 29, 2023, respectively.

⁽³⁾ 

Represents Moosejaw store locations acquired by the Company during the first quarter of fiscal 2023, which average approximately 4,000 square feet per store. The Company closed 10 of the previously acquired Moosejaw store locations during fiscal 2023.

⁽⁴⁾ 

As of May 4, 2024, includes 14 DICK'S House of Sport stores, with two new openings during the first quarter of fiscal 2024, one of which was relocated from a prior store location.

⁽⁵⁾ 

Column may not recalculate due to rounding.

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

13 Weeks Ended

May 4,
2024

% of

Sales

April 29,
2023

% of

Sales

Net sales

$           3,018,383

100.00 %

$            2,842,181

100.00 %

Cost of goods sold, including occupancy and distribution costs

1,923,090

63.71

1,813,564

63.81

GROSS PROFIT

1,095,293

36.29

1,028,617

36.19

Selling, general and administrative expenses

743,399

24.63

693,845

24.41

Pre-opening expenses

21,095

0.70

9,149

0.32

INCOME FROM OPERATIONS

330,799

10.96

325,623

11.46

Interest expense

13,835

0.46

15,043

0.53

Other (income) expense

(25,392)

(0.84)

(17,707)

(0.62)

INCOME BEFORE INCOME TAXES

342,356

11.34

328,287

11.55

Provision for income taxes

67,061

2.22

23,638

0.83

NET INCOME

$              275,295

9.12 %

$              304,649

10.72 %

EARNINGS PER COMMON SHARE:

Basic

$                    3.42

$                    3.67

Diluted

$                    3.30

$                    3.40

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

80,582

83,071

Diluted

83,346

89,664

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands)

May 4,
2024

April 29,
2023

February 3,
2024

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$             1,649,077

$             1,642,680

$             1,801,220

Accounts receivable, net

157,855

132,788

114,877

Income taxes receivable

3,738

16,249

4,108

Inventories, net

3,201,148

3,034,202

2,848,797

Prepaid expenses and other current assets

149,948

117,070

121,047

Total current assets

5,161,766

4,942,989

4,890,049

Property and equipment, net

1,750,634

1,372,776

1,638,161

Operating lease assets

2,262,793

2,207,631

2,257,482

Intangible assets, net

56,591

63,600

56,663

Goodwill

245,857

250,398

245,857

Deferred income taxes

25,746

31,282

37,846

Other assets

201,608

239,136

185,694

TOTAL ASSETS

$            9,704,995

$              9,107,812

$              9,311,752

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$             1,476,444

$             1,220,003

$             1,288,728

Accrued expenses

616,947

495,743

551,369

Operating lease liabilities

485,854

466,911

492,856

Income taxes payable

102,356

44,865

54,508

Deferred revenue and other liabilities

340,572

297,633

364,933

Total current liabilities

3,022,173

2,525,155

2,752,394

LONG-TERM LIABILITIES:

Revolving credit borrowings

—

—

—

 Senior notes

1,483,496

1,482,565

1,483,260

Long-term operating lease liabilities

2,336,845

2,256,068

2,287,714

Other long-term liabilities

175,215

169,854

171,103

Total long-term liabilities

3,995,556

3,908,487

3,942,077

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Common stock

570

617

568

Class B common stock

236

236

236

Additional paid-in capital

1,448,098

1,405,767

1,448,855

Retained earnings

5,773,338

5,096,789

5,588,914

Accumulated other comprehensive loss

(389)

(345)

(329)

Treasury stock, at cost

(4,534,587)

(3,828,894)

(4,420,963)

Total stockholders' equity

2,687,266

2,674,170

2,617,281

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$            9,704,995

$              9,107,812

$              9,311,752

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(In thousands)

13 Weeks Ended

May 4,
2024

April 29,
2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$            275,295

$           304,649

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

91,477

82,348

Amortization of deferred financing fees and debt discount

580

637

Deferred income taxes

12,100

9,907

Stock-based compensation

17,257

12,809

Other, net

100

(1,464)

Changes in assets and liabilities:

Accounts receivable

(29,146)

(25,991)

Inventories

(352,351)

(166,582)

Prepaid expenses and other assets

(22,918)

(11,913)

Accounts payable

192,488

(99,959)

Accrued expenses

7,563

(70,362)

Income taxes payable / receivable

48,218

7,383

Construction allowances provided by landlords

31,369

23,684

Deferred revenue and other liabilities

(21,798)

(42,183)

Operating lease assets and liabilities

(18,515)

(71,343)

Net cash provided by (used in) operating activities

231,719

(48,380)

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(157,525)

(84,507)

Proceeds from sale of other assets

—

27,500

Other investing activities

(474)

(31,360)

Net cash used in investing activities

(157,999)

(88,367)

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal paid in connection with exchange of convertible senior notes

—

(137)

Payments on finance lease obligations

—

(198)

Proceeds from exercise of stock options

12,293

12,370

Minimum tax withholding requirements

(30,300)

(94,695)

Cash paid for treasury stock

(108,629)

(57,701)

Cash dividends paid to stockholders

(94,395)

(104,783)

(Decrease) increase in bank overdraft

(4,772)

100,278

Net cash used in financing activities

(225,803)

(144,866)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

(60)

(93)

NET DECREASE IN CASH AND CASH EQUIVALENTS

(152,143)

(281,706)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

1,801,220

1,924,386

CASH AND CASH EQUIVALENTS, END OF PERIOD

$         1,649,077

$         1,642,680

DICK'S SPORTING GOODS, INC.

GAAP to NON-GAAP RECONCILIATIONS - UNAUDITED

Non-GAAP Net Income and Earnings Per Share Reconciliations

(dollars in thousands, except per share amounts)

13 Weeks Ended May 4, 2024

Selling, general and
administrative expenses

Other (income)
expense

Income before
income taxes

Net income

Earnings per
diluted share

GAAP Basis

$                743,399

$       (25,392)

$       342,356

$       275,295

$                 3.30

% of Net Sales

24.63 %

(0.84) %

11.34 %

9.12 %

Deferred compensation plan adjustments ⁽¹⁾

(3,747)

3,747

—

—

Non-GAAP Basis

$                739,652

$        (21,645)

$       342,356

$       275,295

$                 3.30

% of Net Sales

24.50 %

(0.72) %

11.34 %

9.12 %

⁽¹⁾              Includes non-cash changes in fair value of employee deferred compensation plan investments held in rabbi trusts.

13 Weeks Ended April 29, 2023

Selling, general and
administrative expenses

Other (income)
expense

Income before
income taxes

Net income

Earnings per
diluted share

GAAP Basis

$                693,845

$        (17,707)

$       328,287

$      304,649

$                 3.40

% of Net Sales

24.41 %

(0.62) %

11.55 %

10.72 %

Deferred compensation plan adjustments ⁽¹⁾

(179)

179

—

—

Non-GAAP Basis

$               693,666

$        (17,528)

$       328,287

$      304,649

$                 3.40

% of Net Sales

24.41 %

(0.62) %

11.55 %

10.72 %

⁽¹⁾              Includes non-cash changes in fair value of employee deferred compensation plan investments held in rabbi trusts.

Reconciliation of Gross Capital Expenditures to Net Capital Expenditures

(in thousands) 

The following table represents a reconciliation of the Company's gross capital expenditures to its capital expenditures, net of construction allowances. 

13 Weeks Ended

May 4,
2024

Gross capital expenditures

$                (157,525)

$                  (84,507)

Construction allowances provided by landlords

31,369

23,684

Net capital expenditures

$                (126,156)

$                 (60,823)