DICK’S Sporting Goods, Inc. (NYSE:DKS) Q3 2022 Earnings Call Transcript

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Navdeep Gupta: Yes, Adrienne, thanks. For 2023, I’m not going to be able to provide any early guidance. But as Lauren indicated, we are very confident about the core aspects of the business as you think about apparel, footwear, team sports and even the outdoor category. So we are appropriately being cautious about — with the macroeconomic outlook. But overall, we are very confident about the sales expectations on a long-term basis. And we’ll provide our 2023 outlook as part of our fourth quarter earnings release.

Operator: Our next question comes from Robby Ohmes with Bank of America.

Robert Ohmes: My question is on the basket uplift that you guys saw in the third quarter, do you — should we look for that to continue into the fourth quarter? Maybe more color on what is driving the increase in the average transaction size? Is it better in-stock levels and the high ticket items? Or is it because you were out of stock last year? Like more of the dynamic on what’s driving that would be helpful.

Lauren Hobart: Yes. So our comps this year — this quarter was really strong, driven by more than — 50% was driven by transactions and the rest by basket. And within the basket, there was some impact of inflation and passing some costs along to consumers, some of which we absorbed ourselves. But there was also a shift in terms of the mix that we provide to consumers and some premiumization of what people are buying. Consumers are absolutely signaling that a healthy active outdoor lifestyle is important to them, and they are buying what they’re considering discretionary items to keep that lifestyle going. So it was really across the entire basket. Things were improved.

Navdeep Gupta: Yes, Robby, maybe I’ll add one more comment. Each of our the consumer income demographic that we have within our store did really, really well in third quarter. And what we saw was that highly engaged and loyal athletes that we have in our gold customer. Those customers actually did even better. And so we continue to be really optimistic when we look at the core aspects of the business about the fourth quarter. We are balancing that against the macroeconomic constraints that we see right now. But overall, we were very pleased with the results that we saw in Q3.

Robert Ohmes: And maybe just a quick follow-up. Can you remind us how holiday played out last year in terms of pull-forward of spending and how you’re planning against that this year for the fourth quarter?

Navdeep Gupta: Yes. We probably, Robby, saw a little bit pretty much like every retailer that there was a little bit of early start to the season, both last year and if you look in 2020 as well because of the overall constrained inventory levels that were existing. And — but however, as we look to the business, we look at it as the overall holiday season. So not too focused on the first few weeks or late October.

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