DICK’S Sporting Goods, Inc. (NYSE:DKS) Q4 2022 Earnings Call Transcript

Lauren Hobart: Thanks, Adrienne. You’re absolutely correct that we are leaning into new store growth. And specifically due to the experience we’ve had with House of Sport, the fact that the three experiences that we built as really concept stores have become scalable, highly profitable, more sales, more profit, both on a total basis as well as a square footage basis, we are leaning into that growth. And so, we will have nine that are being built this year from remodels and one relocation as well as 10 in the pipeline for 2024 that we’re already going to start construction this year. We’re very, very bullish on House of Sport and what this can do for our athlete experience in our business. Navdeep?

Navdeep Gupta: Adrienne, great question. I think, maybe there is two ways to answer this. First of all, like we have said, 2022 is the new baseline foundation upon which we will grow our sales and earnings over the long term. As also Lauren noted, as we look to the future, we still believe there is a tremendous amount of share gain opportunity for us. We are the largest sporting goods company. And right now, our share in $140 billion industry is just 8%. So, as we look to the future, we are very optimistic about the opportunity that we have to continue to provide differentiated assortment and service to our athletes and continue to gain share. I’m not willing to give today a long-term rubric, but here’s the way to think about it, that we believe we can continue to drive positive comps, continue to grow our square footage and continue to expand our profitability into the future.

And we are very optimistic, as you can see, based on the guidance that we have provided that for 2023.

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

Robby Ohmes: I think two questions, just — I just want to — I think this is kind of obvious, but the cadence of comps in 2023, could you give a little more color? Are they sort of strongest in the first quarter and then fade through the year and at 0 to 2, I think you’re implying that we should be doing negative same-store sales for the back half of the year. I just want to confirm that. And then, the other question is somewhat related. Just the average transaction size was, I think you guys said down in the fourth quarter, I think 2.3%. That doesn’t — you guys don’t have negative average transaction size often? Is it — can you give us color on it? Is it weak large ticket or lack of price increases? And then also related to that, the traffic was obviously offset that. Was that store — more store traffic or more online transactions? Any color on these things around same-store sales would be great.

Lauren Hobart: Thanks, Robby. I’ll start off. The cadence of comps in fiscal ’23, you’re correct that we will expect — we do expect comps to be stronger in the first half than the second half. As you think back to last year at this time, Q1 and Q2, we had significant inventory challenges. That’s the whole reason why the inventory came in late as the year went on. And it was difficult to put together a really fantastic athlete experience. At this point, our spring product is in. I would actually encourage you to go to a DICK’S store and take a look. We have a fantastic assortment. And so, due to the comps from last year and the confidence we have in our business, we do expect comps to be very strong in the first half. As you look towards the back half of the year, we’re just being cautious.