And like I said in my prepared remarks, we are assuming that this is a trend that is going to remain with us for a longer time. So, we have baked in an elevated level of shrink expectations for the back half of this year that further pressured our outlook that we gave for 2023. We’ll have to wait and see when does this reverse, but right now we wanted to be conservative and we wanted to be prudent about the potential risk that may still be out there.
Adrienne Yih: Great. Thank you very much. Best of luck.
Operator: Your next question comes from the line of Robby Ohmes from Bank of America. Please go ahead. Your line is open.
Robby Ohmes: Oh, hey, I’ll save my deeper questions on the EBIT margin decline outlook for maybe the follow-up call we’re going to have, but maybe get a little more color on what happened during the core. Has back-to-school gone as well as you expected? Maybe more commentary on what categories worked and didn’t work. There was a ticket decline in the second quarter. Was that trade-down? Was that mix? Maybe just sort of walk us through the different things that happened.
Lauren Hobart: Yep. Thanks, Robby. So, starting with our total comp, we had a 1.8% comp and a 3.6% total sales. It’s really important to note that our consumer is doing very, very well. And I would point to a number of different proof points on that. First of all, we saw growth across every single income demographic, which I know is different from what you’re hearing from other companies. From our lowest income consumer to our higher income demographics, we saw growth across each one. We did not see a trade-down from best to better or better to good product. We saw transactions grow 2.8%. So, while there was some decline in average ticket, overall we had more athletes join our database, come into our fold, and they came more often and they spent more in total.
So, it is really clear and important to note that our consumer is doing very well. And I think what we used to consider is as the discretionary category has become something that’s very important to them and something they’re voting with their wallet that they want to maintain a healthy, active lifestyle, team sports, running, walking, all of these things. So, overall, really, really terrific consumer for the quarter and for many quarters now.
Navdeep Gupta: Yes, Robby, maybe I’ll build on that. In terms of what we are seeing in the month of July, we couldn’t be more excited about the results and the momentum that we are seeing at the tail end of our quarter, especially in the month of July. Two big reasons for that. You called out very early back-to-school season that started out in the tail of Q2. We are very excited about the start of the season. Still plenty of season to go ahead of us. The second aspect is we opened our seven House of Sport locations in Q2, and actually in the month of July. And the results and the momentum that we are seeing coming out of those locations, as well as the two next-generation 50k stores that we opened, we now have three of them, the collective momentum that we are seeing from the investment that we have made, how well the assortment is resonating, and how well the servicer is resonating, we couldn’t be more excited about.
And that’s what you saw us reiterating our guidance for full-year on a comp sales basis.
Robby Ohmes: And just to clarify, the inventory actions taken in the second quarter, did they support the traffic? Did they have an impact on the ticket?
Navdeep Gupta: I would say no. It was a small, targeted portion of the actions that we took. We are happy with the fact that actually our inventory finished down 5% compared to last year. But those actions were highly targeted. And like Lauren indicated, it was primarily focused around our outdoor category.
Robby Ohmes: Got it. Thank you.
Operator: Your next question comes from the line of Kate McShane from Goldman Sachs. Please go ahead. Your line is open.
Kate McShane: Hi, good morning. Thanks for taking our question. I know you flagged strength in footwear and team sports in the quarter, but sounds like apparel maybe underperformed a little bit. Is that the case and did it have to do more with outdoor? Was there something else there?
Lauren Hobart: Thanks, Kate. We saw tremendous growth in team sports and in footwear, and you’re correct, apparel did soften. The one thing I want to point out about apparel is that the softening was at an industry level. We did continue to gain market share, and importantly, our Nike apparel business was extremely positive, very strong, and our flagship vertical brands were also very strong. So, we are very optimistic and bullish about apparel going forward.
Kate McShane: And I wanted to ask a question about what you guys flagged in the press release. I think Ed said in his quote about growth opportunities being the best since you’ve gone public in the early 2000s. But just wondered if you could drill down a little bit more on what that statement means and what the opportunities are.
Lauren Hobart: Yes, so retail has increasingly become about innovation and about technology and the technological enablement of that innovation. And what we have ahead of us is completely revolutionizing retail. So, our House of Sport concept, our new 50k, we’re leaning into experiences. We’re leaning into service. We’ve got fantastic assortment, and we’re investing to technologically enable all of our teammates, and that’s in every aspect of our business, from supply chain to e-comm to how we arm our teammates and run our stores. There has not been an opportunity this notable. I have to quote Ed because I wasn’t here back in the early 2000s, but since we went public and we had so much growth ahead of us.
Kate McShane: Thank you.
Operator: Your next question comes from the line of Chris Horvers from J.P. Morgan. Please go ahead. Your line is open.
