DICKS SPORTING GOODS INC

Previous wording

We caution that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Quarterly Report on Form 10-Q or made by our management involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond our control. Accordingly, our future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Investors should not place undue reliance on forward-looking statements as a prediction of actual results. These statements can be identified as those that may predict, forecast, indicate or imply future results, performance or advancements and by forward-looking words such as“believe”, “anticipate”, “expect”, “estimate”, “predict”, “intend”, “plan”, “project”, “goal”, “will”, “will be”, “will continue”, “will result”, “could”, “may”, “might”or any variations of such words or other words with similar meanings. Forward-looking statements address, among other things, our expectations regarding our future comparable sales and earnings per share; our belief that many consumers have made lasting lifestyle changes with an increased focus on health and fitness, sports, and outdoor activities, leading to structurally higher sales; current macroeconomic conditions, including the uncertain impact of inflationary pressures, geopolitical conflicts, the end of student loan payment deferments, and elevated interest rates; supply chain disruptions, including factory closures and port congestion; changes in consumer demand for products in certain categories, including fitness and outdoor equipment; the adequacy of our cash flow; our ability to control expenses and manage inventory shrink; the impact of our business optimization efforts completed in 2023; plans to opportunistically open new stores in under-penetrated markets and leverage our real estate portfolio to capitalize on future opportunities in the near and intermediate term as our existing leases come up for renewal; the repositioning of our real estate portfolio, including plans to open additional DICK’S House of Sport stores, next generation 50,000 square foot DICK’S stores, or other specialty concept stores, including Golf Galaxy Performance Center; plans to provide our vertical brands with improved space in-store, increased marketing and expansion into additional product categories; our diversity and sustainability goals; the belief that our inventory is healthy and well-positioned to meet the demands of our athletes in 2024; our belief that the Inflation Reduction Act will not materially impact our financial results, including our estimated effective tax rate and liquidity; projections of our future profitability; projected range of capital expenditures which we expect will be concentrated on new store development, relocations and remodels, improvements within our existing stores including converting approximately 50 …

Excerpt shortened here; the source contains the full paragraph.

Current wording

We caution that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Quarterly Report on Form 10-Q or made by our management involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond our control. Accordingly, our future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Investors should not place undue reliance on forward-looking statements as a prediction of actual results. These statements can be identified as those that may predict, forecast, indicate or imply future results, performance or advancements and by forward-looking words such as“believe”, “anticipate”, “expect”, “estimate”, “predict”, “intend”, “plan”, “project”, “goal”, “will”, “will be”, “will continue”, “will result”, “could”, “may”, “might”or any variations of such words or other words with similar meanings. Forward-looking statements address, among other things, our expectations regarding our future comparable sales and earnings per share; our belief that many consumers have made lasting lifestyle changes with an increased focus on health and fitness, sports, and outdoor activities, leading to structurally higher sales; current macroeconomic conditions, including the uncertain impact of inflationary pressures, geopolitical conflicts, the end of student loan payment deferments, and elevated interest rates; supply chain disruptions, including factory closures and port congestion; changes in consumer demand for products in certain categories, including fitness and outdoor equipment; the adequacy of our cash flow; our ability to control expenses and manage inventory shrink; the impact of our business optimization efforts completed in 2023; plans to opportunistically open new stores in under-penetrated markets and leverage our real estate portfolio to capitalize on future opportunities in the near and intermediate term as our existing leases come up for renewal; the repositioning of our real estate portfolio, including plans to open additional DICK’S House of Sport stores, next generation 50,000 square foot DICK’S stores, or other specialty concept stores, including Golf Galaxy Performance Center; plans to provide our vertical brands with improved space in-store, increased marketing and expansion into additional product categories; our diversity and sustainability goals; the belief that our inventory is healthy and well-positioned to meet the demands of our athletes in 2024; our belief that the Inflation Reduction Act will not materially impact our financial results, including our estimated effective tax rate and liquidity; projections of our future profitability; projected range of capital expenditures which we expect will be concentrated on new store development, relocations and remodels, improvements within our existing stores, including converting approximately 45…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

▪That our strategic plans initiatives may initially result in a negative impact on our financial results, or that such plans and initiatives may not achieve the desired results within the anticipated time frame or at all;

Current wording

▪That our strategic plans and initiatives may initially result in a negative impact on our financial results, or that such plans and initiatives may not achieve the desired results within the anticipated time frame or at all;

Previous wording

▪Risks associated with brick-and-mortar retail store model, including our ability to optimize our store lease portfolio and our distribution and fulfillment network;

Current wording

▪Risks associated with our brick-and-mortar retail store model, including our ability to optimize our store lease portfolio and our distribution and fulfillment network;

Previous wording

▪Unauthorized use of or disclosure of sensitive or confidential athlete, teammate, vendor or Company information;

Current wording

▪Unauthorized use or disclosure of sensitive or confidential athlete, teammate, vendor or Company information;

Previous wording

Through our strategic pillars of athlete experience, teammate experience, differentiated product and brand engagement, we have transformed our business to drive sustained profitable growth. As part of our strategy, we have meaningfully improved our merchandise assortment through strong relationships with our key brand partners, which provides access to highly differentiated product, and our vertical brands. We have also enhanced our store selling culture and service model and incorporated additional experiential elements and technology into our stores to further engage our athletes. Lastly, we continue to innovate in our omni-channel athlete experience through our DICK’S House of Sport stores, Golf Galaxy Performance Centers and our next generation 50,000 square foot DICK’S store. Consumers have also made what we believe will be lasting lifestyle changes in recent years, prioritizing sport and maintaining healthy, active lifestyles, which has increased demand for our products.

Current wording

Through our strategic pillars of athlete experience, teammate experience, differentiated product and brand engagement, we have transformed our business to drive sustained profitable growth. As part of our strategy, we have meaningfully improved our merchandise assortment through our vertical brands and strong relationships with our key brand partners, which provide access to highly differentiated products. We have also enhanced our store selling culture and service model and incorporated additional experiential elements and technology into our stores to further engage our athletes. Lastly, we continue to innovate our omni-channel athlete experience through our DICK’S House of Sport stores, Golf Galaxy Performance Centers and our next generation 50,000 square foot DICK’S store, and believe that a key driver of our future omni-channel growth will include repositioning our store portfolio to grow these stores. In addition to these strategies and foundational improvements, consumers have also made what we believe will be lasting lifestyle changes in recent years, prioritizing sport and maintaining healthy, active lifestyles, which has increased demand for our products.

Previous wording

The macroeconomic environment in which we operate remains dynamic as a result of numerous factors, including inflationary pressures, the expiration of student loan payment deferments, and the potential impact of elevated interest rates, which could impact consumer discretionary spending behavior and the promotional landscape in which we operate, as well as higher inventory shrink, which has been noted throughout the retail industry. In addition, we completed a business optimization during 2023 to better align our talent, organizational design and spending in support of our most critical strategies while also streamlining our overall cost structure.

Current wording

The macroeconomic environment in which we operate remains dynamic as a result of numerous factors, including inflationary pressures, the expiration of student loan payment deferments, and the potential impact from continued elevated interest rates, which could impact consumer discretionary spending behavior and the promotional landscape in which we operate, as well as higher inventory shrink, which has been noted throughout the retail industry. In addition, we completed a business optimization during 2023 to better align our talent, organizational design and spending in support of our most critical strategies while also streamlining our overall cost structure.

Previous wording

Despite the dynamic macroeconomic environment, we continue to experience robust demand from our athletes. As a result of our strong performance during the first fiscal quarter of 2024, expected continuation of this robust demand from our athletes and confidence in our business, we have raised our full year outlook. We now expect comparable sales growth for the year to be in the range of 2% to 3% and earnings per diluted share to be in the range of $13.35 to 13.75.

Current wording

Despite the dynamic macroeconomic environment, we continue to experience robust demand from our athletes. As a result of our strong performance during fiscal 2024 and our confidence about our strategic initiatives and operational strength, we have raised our full year outlook. We now expect comparable sales growth for the year to be in the range of 2.5% to 3.5% and earnings per diluted share to be in the range of $13.55 to 13.90.

Previous wording

•As a percentage of net sales, inventory shrink was 22 basis points higher during the first quarter as compared to 2023. While inventory shrink remains elevated compared to historical levels, as our shrink in the second quarter of 2023 also included the cumulative impact of shrink identified from our physical inventories, we expect inventory shrink as a percent of net sales to be lower than the prior year period in the second quarter of 2024.

Current wording

•While inventory shrink remains elevated compared to historical levels, inventory shrink as a percentage of net sales decreased 83 basis points during the second quarter as compared to 2023, as the prior year period included the cumulative impact of shrink identified from our physical inventories. For the remainder of the year, we expect inventory shrink as a percent of net sales to remain relatively flat compared to the prior year period.

Previous wording

▪Comparable sales performance – Our management considers comparable sales, which includes online sales and GameChanger revenue, to be an important indicator of our current performance. Comparable sales results are important to leverage our costs, which include occupancy costs, store payroll and other store expenses. Comparable sales also have a direct impact on our total net sales, net income, cash and working capital. A store is included in the comparable sales calculation during the fiscal period that it commences its 14 th full month of operations. Relocated stores are included in the comparable sales calculation from the open date of the original location. Stores that were permanently closed during the applicable period have been excluded from comparable sales results. For further discussion of our comparable sales, refer to the “Results of Operations and Other Selected Data” section herein.

Current wording

▪Comparable sales performance – Our management considers comparable sales, which also includes online sales and GameChanger revenue, to be an important indicator of our current performance. Comparable sales results are important to leverage our costs, which include occupancy costs, store payroll and other store expenses. Comparable sales also have a direct impact on our total net sales, net income, cash and working capital. A store is included in the comparable sales calculation during the fiscal period that it commences its 14 th full month of operations. Relocated stores are included in the comparable sales calculation from the open date of the original location. Stores that were permanently closed during the applicable period have been excluded from comparable sales results. For further discussion of our comparable sales, refer to the “Results of Operations and Other Selected Data” section herein.

Previous wording

▪Cash flows from operating activities – Cash flow generation supports our general liquidity needs and funds capital expenditures for our omni-channel platform, which include investments in new and existing stores and our eCommerce channel, distribution and administrative facilities, continuous improvements to information technology tools, potential strategic acquisitions or investments that may arise from time-to-time and stockholder return initiatives, including cash dividends and share repurchases. We typically experience lower operating cash flows in our third fiscal quarter due to increased inventory purchases in advance of the holiday selling season and anticipated higher cash flows during our fourth fiscal quarter. For further discussion of our cash flows, refer to the “Liquidity and Capital Resources” section herein.

Current wording

▪Cash flows from operating activities – Cash flow generation supports our general liquidity needs and funds capital expenditures for our omni-channel platform, which include investments in new and existing stores and our eCommerce channel, distribution and administrative facilities, continuous improvements to information technology tools, potential strategic acquisitions or investments that may arise from time-to-time and stockholder return initiatives, including cash dividends and share repurchases. We typically experience lower operating cash flows in our first and third fiscal quarters due to the timing of inventory purchases in advance of our peak selling periods and anticipated higher cash flows during our second and fourth fiscal quarter. For further discussion of our cash flows, refer to the “Liquidity and Capital Resources” section herein.

Previous wording

As discussed in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s 2023 Annual Report, we consider our policies on inventory obsolescence, inventory shrink, goodwill and intangible assets, and impairment of long-lived assets to be the most critical in understanding the judgments that are involved in preparing our consolidated financial statements.

Current wording

As discussed in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s 2023 Annual Report, we consider our policies on inventory obsolescence, inventory shrink, goodwill and intangible assets, and impairment of long-lived assets to be the most critical in understanding the judgments that are involved in preparing our consolidated financial statements. There have been no significant changes to the Company’s critical accounting policies from those disclosed in the Company’s 2023 Annual Report.

Previous wording

▪Net sales increased 6.2% to $3.02 billion in the current quarter from $2.84 billion during the first quarter of 2023, which includes a shift in the Company’s fiscal calendar that favorably impacted current period net sales comparisons by approximately $45 million. Adjusted for the calendar shift due to the 53rd week in fiscal 2023, comparable sales increased 5.3% following a 3.6% increase in the same period last year.

Current wording

▪Net sales increased 7.8% to $3.47 billion in the current quarter from $3.22 billion during the second quarter of 2023, which includes a shift in the Company’s fiscal calendar due to the 53 rd week in fiscal 2023 that favorably impacted current period net sales comparisons by approximately $95 million. Adjusted for the calendar shift, comparable sales increased 4.5%, following a 2.0% increase in the same period last year.

Previous wording

▪In the current quarter, we reported net income of $275.3 million, or $3.30 per diluted share, compared to $304.6 million, or $3.40 per diluted share, during the first quarter of 2023.

Current wording

▪In the current quarter, we reported net income of $362.2 million, or $4.37 per diluted share, compared to $244.3 million, or $2.82 per diluted share, during the second quarter of 2023. The year-over-year increase was favorably impacted by the calendar shift by approximately $0.30 per diluted share.

Previous wording

▪Repurchased 0.5 million shares of common stock for a total cost of $113.6 million under our share repurchase program;

Current wording

▪Repurchased 0.3 million shares of common stock for a total cost of $49.9 million under our share repurchase program;

Previous wording

(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, seven Public Lands stores, 18 Going Going Gone! stores, and other specialty concept stores. As of April 29, 2023, we operated 97 Golf Galaxy stores, seven 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.

Current wording

(1)Includes our Golf Galaxy, Public Lands, Going Going Gone! and other specialty concept stores. As of August 3, 2024, we operated 108 Golf Galaxy stores, eight Public Lands stores and 20 Going Going Gone! stores. As of July 29, 2023, we operated 97 Golf Galaxy stores, seven Public Lands stores, 16 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 August 3, 2024, the Company operated 19 combo stores.

Previous wording

(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.

Current wording

(2)Excludes temporary value chain locations, of which the Company operated 32 and 38 as of August 3, 2024 and July 29, 2023, respectively.

Previous wording

(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 ten of the previously acquired Moosejaw store locations during fiscal 2023.

Current wording

(3)Represents Moosejaw store locations acquired by the Company during the first quarter of fiscal 2023. The Company closed 10 of the previously acquired Moosejaw store locations during fiscal 2023 and the remaining locations during fiscal 2024.

Previous wording

The following table presents selected information from the unaudited Consolidated Statements of Income as a percentage of net sales and the changes in the percentage of net sales from the comparable 2023 period, and other data, and is provided to facilitate a further understanding of our business. This table should be read in conjunction with Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the accompanying unaudited Consolidated Financial Statements and related notes thereto.

Current wording

The following tables present selected information from the unaudited Consolidated Statements of Income as a percentage of net sales and the changes in the percentage of net sales from the comparable 2023 period, and other data, and are provided to facilitate a further understanding of our business. These tables should be read in conjunction with Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the accompanying unaudited Consolidated Financial Statements and related notes thereto.

Previous wording

(5)Due to the 53rd 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.

Current wording

(5)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 the 13 and 26 weeks ended August 3, 2024 net sales comparisons by approximately $95 million and $140 million, respectively. Comparable sales for fiscal 2024 are calculated by shifting the prior year period by one week to compare similar calendar weeks.

Previous wording

Net sales increased 6.2% to $3,018.4 million in the current quarter from $2,842.2 million in the quarter ended April 29, 2023. 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, as adjusted for the shifted retail calendar, increased 5.3%, or $150.6 million. The remaining decrease in net sales was primarily attributable to Moosejaw and other store closures.

Current wording

Net sales increased 7.8% to $3,473.6 million in the current quarter from $3,223.6 million for the quarter ended July 29, 2023. 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 $95 million. Comparable sales, as adjusted for the shifted retail calendar, increased 4.5%, or $143.4 million. The remaining increase in net sales was primarily attributable to new stores, including DICK’S House of Sport and Golf Galaxy Performance Center locations, partially offset by Moosejaw and other store closures.

Previous wording

Income from operations increased to $330.8 million in the current quarter compared to $325.6 million for the quarter ended April 29, 2023.

Current wording

Income from operations increased to $470.1 million in the current quarter compared to $311.8 million for the quarter ended July 29, 2023.

Previous wording

Gross profit increased to $1,095.3 million in the current quarter from $1,028.6 million for the quarter ended April 29, 2023 and increased as a percentage of net sales by 10 basis points. Merchandise margins as a percentage of net sales decreased 45 basis points as a result of higher markdowns to maintain vibrant and fresh inventory and bring in new inventory to drive sales growth and a 22 basis point increase in inventory shrink due to increased theft, partially offset by a favorable sales mix. Occupancy costs, which after the cost of merchandise represents the largest item within our cost of goods sold, are generally fixed on a per store basis and fluctuate based on the number of stores that we operate, increased $9.9 million and leveraged 23 basis points as a percentage of net sales. The remaining increase in gross profit as a percentage of net sales was driven by lower eCommerce shipping and fulfillment, and supply chain costs.

Current wording

Gross profit increased to $1,275.7 million in the current quarter from $1,109.5 million for the quarter ended July 29, 2023 and increased as a percentage of net sales by 231 basis points. Merchandise margins as a percentage of net sales increased 169 basis points as a result of a favorable sales mix and the quality of our assortment and an 83 basis point decrease in inventory shrink from the prior year quarter, which included the cumulative impact of shrink identified from our physical inventories compared to our estimates. Occupancy costs, which after the cost of merchandise represents the largest item within our cost of goods sold, are generally fixed on a per store basis and fluctuate based on the number of stores that we operate, increased $13.6 million and leveraged 24 basis points as a percentage of net sales. The remaining increase in gross profit as a percentage of net sales was driven by lower eCommerce shipping and fulfillment, and supply chain costs.

Previous wording

Selling, general and administrative expenses increased to $743.4 million in the current quarter from $693.8 million during the first quarter of 2023 and increased as a percentage of net sales by 22 basis points. The current quarter includes a $3.6 million expense increase related to changes in the investment values of our deferred compensation plans, which is fully offset in Other Income. The remaining 10 basis point increase, or $46.0 million, includes higher incentive compensation, increases in brand-building marketing expenses and other costs to support our sales growth.

Current wording

Selling, general and administrative expenses increased 4.2% to $796.7 million in the current quarter from $764.8 million for the quarter ended July 29, 2023, but decreased as a percentage of net sales by 79 basis points due to the current quarter increase in net sales. The $31.9 million increase includes higher incentive compensation, increases in brand-building marketing expenses and other costs in support of our sales growth. The current quarter also includes a $0.7 million expense increase related to changes in the investment values of our deferred compensation plans, which is fully offset in Other Income.

Previous wording

Pre-opening expenses increased to $21.1 million in the current quarter from $9.1 million for the quarter ended April 29, 2023. Pre-opening expenses in any period fluctuate depending on the timing and number of new store openings and relocations. The current year period includes pre-opening expenses to support the opening of two DICK’S House of Sport stores.

Current wording

Pre-opening expenses decreased to $8.9 million in the current quarter from $32.9 million for the quarter ended July 29, 2023. Pre-opening expenses in any period fluctuate depending on the timing and number of new store openings and relocations. The prior year quarter included pre-opening expenses to support the opening of seven DICK’S House of Sport stores.

Previous wording

Other income totaled $25.4 million in the current quarter compared to $17.7 million in the prior year quarter. This $7.7 million increase was primarily driven by a $4.4 million increase in interest income as a result of higher average interest rates on cash and cash equivalents during the current quarter and a $3.6 million expense decrease from changes in our deferred compensation plan investment values driven by performance in equity markets. The Company recognizes investment income or investment expense to reflect changes in deferred compensation plan investment values with an offsetting charge or reduction to selling, general and administrative costs for the same amount.

Current wording

Other income totaled $25.8 million in the current quarter compared to $28.5 million for the prior year quarter, and includes a $0.7 million expense decrease compared to the prior year from changes in our deferred compensation plan investment values driven by performance in equity markets. The Company recognizes investment income or investment expense to reflect changes in deferred compensation plan investment values with an offsetting charge or reduction to selling, general and administrative costs for the same amount.

Previous wording

The increase in comparable sales included a 2.7% increase in transactions and a 2.6% increase in sales per transaction, and reflects growth in footwear, hydration and athletic apparel, offset by declines in fitness and outdoor-related categories including outerwear, equipment and hunt.

Current wording

The increase in comparable sales included a 3.1% increase in sales per transaction and a 1.8% increase in transactions, and reflects growth in footwear, hydration and athletic apparel, offset by declines in fitness and outdoor-related categories including apparel, equipment and hunt.

Previous wording

Our effective tax rate increased to 19.6% in the current quarter from 7.2% in the quarter ended April 29, 2023. The prior year quarter effective tax rate included $39.7 million higher tax benefits from employee equity awards vesting and exercised as compared to the current year quarter.

Current wording

Our effective tax rate increased to 22.7% in the current period from 16.1% for the same period last year. The effective tax rate for the prior year period was favorably impacted by a $39.7 million increase in excess tax benefits, resulting from a higher number of employee equity awards vesting and exercised in the prior year compared to the current year period.

Previous wording

Our cash on hand as of May 4, 2024 was $1.65 billion. We believe that we have sufficient cash flows from operations and cash on hand to operate our business for at least the next twelve months, supplemented by funds available under our unsecured $1.6 billion credit facility (the “Credit Facility”), if necessary. We may require additional funding should we pursue strategic acquisitions, undertake share repurchases, pursue other investments or engage in store expansion rates in excess of historical levels. We had no revolving credit facility borrowings at any point during 2024.

Current wording

Our cash on hand as of August 3, 2024 was $1.69 billion. We believe that we have sufficient cash flows from operations and cash on hand to operate our business for at least the next twelve months, supplemented by funds available under our unsecured $1.6 billion credit facility (the “Credit Facility”), if necessary. We may require additional funding should we pursue strategic acquisitions, undertake share repurchases, pursue other investments or engage in store expansion rates in excess of historical levels. We had no revolving credit facility borrowings at any point during 2024.

Previous wording

As of May 4, 2024, our Senior Notes have long-term credit ratings by Moody’s and Standard & Poor’s rating agencies of Baa3 and BBB, respectively.

Current wording

As of August 3, 2024, our Senior Notes have long-term credit ratings by Moody’s and Standard & Poor’s rating agencies of Baa3 and BBB, respectively. As of August 9, 2024, Moody’s upgraded the credit rating for our Senior Notes to Baa2.

Previous wording

Our capital expenditures are primarily allocated toward the development of our omni-channel platform, including investments in new and existing stores and eCommerce technology, while we have also invested in our supply chain and corporate technology capabilities. Capital expenditures for the 13 weeks ended May 4, 2024 totaled $157.5 million on a gross basis and $126.2 million on a net basis, inclusive of construction allowances provided by landlords.

Current wording

Our capital expenditures are primarily allocated toward the development of our omni-channel platform, including investments in new and existing stores and eCommerce technology, while we have also invested in our supply chain and corporate technology capabilities. Capital expenditures for the 26 weeks ended August 3, 2024 totaled $372.1 million on a gross basis and $325.5 million on a net basis, inclusive of construction allowances provided by landlords.

Previous wording

We anticipate fiscal 2024 capital expenditures of approximately $800 million, net of construction allowances provided by landlords. As we continue to reposition our store portfolio, these investments will be concentrated in planned new store development, relocations and remodels that will include eight DICK’S House of Sport stores, ten Golf Galaxy Performance Centers and 16 next generation 50,000 square foot DICK’S stores that are scheduled to open in 2024 as well as, improvements within our existing stores including converting approximately 50 stores to premium full-service footwear decks. Additionally, we expect to begin construction on 15 DICK’S House of Sport stores that are scheduled to open throughout 2025 and a new regional distribution center that we plan to open in 2026, while continuing to invest in technology to enhance our store fulfillment, in-store pickup and other foundational capabilities. Our 2024 capital expenditures plan also includes the purchase of certain real estate assets related to DICK’S House of Sport stores, for which we are evaluating potential sale-leaseback opportunities.

Current wording

We anticipate fiscal 2024 capital expenditures of approximately $800 million, net of construction allowances provided by landlords. As we continue to reposition our store portfolio, these investments will be concentrated in planned new store development, relocations and remodels that will include eight DICK’S House of Sport stores, ten Golf Galaxy Performance Centers and 15 next generation 50,000 square foot DICK’S stores that are currently scheduled to open in 2024, as well as improvements within our existing stores including converting approximately 45 stores to premium full-service footwear decks. Additionally, we expect to begin construction on approximately 15 DICK’S House of Sport stores that are scheduled to open throughout 2025 and a new regional distribution center in Texas that we plan to open in 2026, while continuing to invest in technology to enhance our store fulfillment, in-store pickup and other foundational capabilities. Our 2024 capital expenditures plan also includes the purchase of certain real estate assets primarily related to DICK’S House of Sport stores, for which we are evaluating potential sale-leaseback opportunities.

Previous wording

From time-to-time, we may opportunistically repurchase shares of our common stock under our $2.0 billion share repurchase program authorized by our Board of Directors on December 16, 2021. During the 13 weeks ended May 4, 2024, we repurchased 0.5 million shares of our common stock at a cost of $113.6 million. As of May 4, 2024, the available amount remaining under the December 2021 share repurchase authorization is $665.9 million.

Current wording

From time-to-time, we may opportunistically repurchase shares of our common stock under our $2.0 billion share repurchase program authorized by our Board of Directors on December 16, 2021. During the 26 weeks ended August 3, 2024, we repurchased 0.8 million shares of our common stock at a cost of $163.6 million. As of August 3, 2024, the available amount remaining under the December 2021 share repurchase authorization is $616.0 million.

Previous wording

During the 13 weeks ended May 4, 2024, we paid $94.4 million of dividends to our stockholders. On May 28, 2024, our Board of Directors authorized and declared a quarterly cash dividend in the amount of $1.10 per share of common stock and Class B common stock, payable on June 28, 2024 to stockholders of record as of the close of business on June 14, 2024.

Current wording

During the 26 weeks ended August 3, 2024, we paid $183.1 million of dividends to our stockholders. On September 3, 2024, our Board of Directors authorized and declared a quarterly cash dividend in the amount of $1.10 per share of common stock and Class B common stock, payable on October 4, 2024 to stockholders of record as of the close of business on September 20, 2024.

Previous wording

We have entered into supply chain financing arrangements with third-party financial institutions, whereby suppliers have the opportunity to settle outstanding payment obligations early at a discount. We do not have an economic interest in suppliers’ voluntary participation and we do not provide any guarantees or pledge assets under these arrangements. Supplier invoices are settled with the third-party financial institutions in accordance with the original supplier payment terms and our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted by these arrangements. Liabilities associated with the funded participation in these arrangements, which are presented within accounts payable on the Consolidated Balance Sheets, were $56.6 million, $45.9 million and $41.6 million as of May 4, 2024, February 3, 2024 and April 29, 2023, respectively.

Current wording

We have entered into supply chain financing arrangements with third-party financial institutions, whereby suppliers have the opportunity to settle outstanding payment obligations early at a discount. We do not have an economic interest in suppliers’ voluntary participation and we do not provide any guarantees or pledge assets under these arrangements. Supplier invoices are settled with the third-party financial institutions in accordance with the original supplier payment terms and our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted by these arrangements. Liabilities associated with the funded participation in these arrangements, which are presented within accounts payable on the Consolidated Balance Sheets, were $49.8 million, $45.9 million and $38.1 million as of August 3, 2024, February 3, 2024 and July 29, 2023, respectively.

Previous wording

Cash flows provided by operating activities increased $280.1 million for the 13 weeks ended May 4, 2024 compared to the same period in the prior year, primarily due to changes in inventory levels and accounts payable, which increased operating cash flows by $106.7 million, and the timing of payments for payroll, rent and income taxes.

Current wording

Cash flows provided by operating activities decreased $67.3 million for the 26 weeks ended August 3, 2024 compared to the same period in the prior year, primarily due to changes in inventory levels and accounts payable, which decreased operating cash flows by $218.3 million and reflects our investments in key categories to support our sales growth, partially offset by the timing of year-over-year rent payments and higher earnings.

Previous wording

Cash used in investing activities increased $69.6 million for the 13 weeks ended May 4, 2024 compared to the same period last year. Gross capital expenditures increased $73.0 million primarily driven by investments in future DICK’S House of Sport and next generation 50,000 square foot DICK’S stores, future Golf Galaxy Performance Centers as well as higher investments in remodels or other store enhancements. Cash used in investing activities for the 13 weeks ended April 29, 2023 also includes our acquisition of Moosejaw, offset by proceeds received from the sale of our Field & Stream trademark and other intellectual property.

Current wording

Cash used in investing activities increased $98.1 million for the 26 weeks ended August 3, 2024 compared to the same period last year. Gross capital expenditures increased $123.5 million primarily driven by investments in future DICK’S House of Sport and next generation 50,000 square foot DICK’S stores, future Golf Galaxy Performance Centers, as well as higher investments in remodels or other store enhancements. Cash used in investing activities for the 26 weeks ended July 29, 2023 included our acquisition of Moosejaw and progress payments for the purchase of corporate aircraft, offset by proceeds received from the sale of our Field & Stream trademark and other intellectual property.

Previous wording

Financing activities have historically consisted of capital return initiatives, including share repurchases and cash dividend payments, cash flows generated from stock option exercises and cash activity associated with our Credit Facility, or other financing sources. Cash used in financing activities increased $80.9 million for the 13 weeks ended May 4, 2024 compared to the prior year period, primarily driven by changes in bank overdraft balances between periods. Additionally, the current year includes higher cash payments for share repurchases, which were offset by lower cash payments for minimum tax withholding requirements as a result of the vesting of employee equity awards compared to the prior year quarter.

Current wording

Financing activities have historically consisted of capital return initiatives, including share repurchases and cash dividend payments, cash flows generated from stock option exercises and cash activity associated with our Credit Facility, or other financing sources. Cash used in financing activities decreased $78.7 million for the 26 weeks ended August 3, 2024 compared to the prior year period, primarily driven by lower share repurchases and lower cash payments for minimum tax withholding requirements as a result of the vesting of employee equity awards compared to the prior year, partially offset by changes in bank overdraft balances between periods.