DICKS SPORTING GOODS INC

Previous wording

▪Macroeconomic conditions, including inflation, ongoing elevated interest rates and recessionary pressures, adverse changes in consumer disposable income, consumer confidence and perception of economic conditions, geopolitical conflicts, terrorism or public unrest; wage and unemployment levels; consumer debt and the cost of basic necessities and other goods; pandemics, epidemics, contagious disease outbreaks and other public health concerns and the effectiveness of measures to mitigate such impact;

Current wording

▪Macroeconomic conditions, including inflation and/or prolonged inflationary pressures, elevated interest rates and recessionary pressures, adverse changes in consumer disposable income, consumer confidence and perception of economic conditions, including as a result of new and shifting economic policies, geopolitical conflicts (including the conflicts in Ukraine and the Middle East) and the threat or outbreak of further conflicts, war, terrorism or public unrest; wage and unemployment levels; consumer debt and the cost of basic necessities and other goods; pandemics, epidemics, contagious disease outbreaks and other public health concerns and the effectiveness of measures to mitigate such impact;

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▪Our ability to grow our DICK’S House of Sport, DICK’S Field House and Golf Galaxy Performance Center Stores and execute our overall real estate strategy;

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▪Our ability to grow our DICK’S House of Sport, DICK’S Field House and Golf Galaxy Performance Center stores and execute our overall real estate strategy, including the projected range of capital expenditures and associated costs;

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▪Fluctuations in product costs and availability due to inflationary pressures, fuel price uncertainty, supply chain constraints, increases in commodity prices, labor shortages and other factors;

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▪Fluctuations in product costs and availability due to tariffs, currency exchange rate fluctuations, inflationary pressures, fuel price uncertainty, supply chain constraints, increases in commodity prices, labor shortages and other factors;

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▪That our investments in omni-channel growth or other business transformation initiatives may not produce the anticipated benefits within the expected time frame or at all;

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▪That our investments in omni-channel growth, DICK’S Media Network, or other business transformation initiatives may not produce the anticipated benefits within the expected time frame or at all;

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▪The impact of an increase to corporate tax rates or other changes in tax laws;

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▪The impact of an increase to corporate tax rates or other changes in tax laws and regulations;

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▪Risks associated with our vertical brand offerings, including product liability and product recalls, specialty concept stores, and GameChanger;

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▪Risks associated with our vertical brand offerings, including product safety and labeling, product liability and product recalls, and specialty concept stores;

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▪Disruptions or other problems with our information systems;

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▪Disruptions or other problems with our information systems, including GameChanger, our sports technology platform;

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▪Risks and costs relating to changing laws and regulations affecting our business, including consumer products; firearms and ammunition; tax; foreign trade and tariff structures; labor; data protection; privacy; eCommerce (including AI and machine learning); and environmental, social, and governance issues;

Current wording

▪Risks and costs relating to changing laws, regulations, interpretations and other guidance affecting our business, including consumer products; firearms and ammunition; tax; foreign trade and tariff structures; labor; data protection; privacy; eCommerce (including AI and machine learning); and environmental, social, and governance issues;

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▪Litigation risks for which we may not have sufficient insurance or other coverage;

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▪Compliance and litigation risks for which we may not have sufficient insurance or other coverage;

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▪Negative reactions from our customers, stockholders or vendors regarding changes to our policies or positions related to social and political issues;

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▪Our ability to protect the reputation of our Company and our brands, which may include managing negative reactions from our customers, stockholders or vendors regarding changes to our policies or positions related to social and political issues;

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▪Disruptions to our distribution and fulfillment network or customer support center;

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▪Disruptions to our Customer Support Center and/or distribution and fulfillment network (including supply chain delays), including our ability to optimize our distribution and fulfillment networks to efficiently deliver merchandise to our stores;

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▪Risks related to our indebtedness, including the senior notes due 2032 (the “2032 Notes”) and senior notes due 2052 (the “2052 Notes” and together with the 2032 Notes, the “Senior Notes”);

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▪Obligations and other provisions related to our indebtedness, including the senior notes due 2032 (the “2032 Notes”) and senior notes due 2052 (the “2052 Notes” and together with the 2032 Notes, the “Senior Notes”);

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▪Our charter’s current anti-takeover provisions, which could prevent or delay a change in control of the Company; and

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▪Our charter’s current anti-takeover provisions, which could prevent or delay a change in control of the Company;

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, foreign trade, geopolitical conflicts, 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, which we refer to internally as “DICK’S Field House”, 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 co…

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Current wording

▪Our future results of operations and financial condition; and

Previous wording

The foregoing and additional risk factors are described in more detail in Item 1A. “Risk Factors” of this Quarterly Report and other reports or filings filed or furnished by us with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended February 3, 2024, filed on March 28, 2024 (our “2023 Annual Report”). In addition, we operate in a highly competitive and rapidly changing environment; therefore, new risk factors can arise, and it is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on our business or the extent to which any individual risk factor, or combination of risk factors, may cause results to differ materially from those contained in any forward-looking statement. The forward-looking statements included in this Quarterly Report on Form 10-Q are made as of the date hereof. We do not assume any obligation and do not intend to update or revise any forward-looking statements whether as a result of new information, future developments or otherwise except as may be required by securities laws.

Current wording

The foregoing and additional risk factors are described in more detail in Item 1A. “Risk Factors” of this Quarterly Report and other reports or filings filed or furnished by us with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the year ended February 1, 2025, filed on March 27, 2025 (our “2024 Annual Report”). In addition, we operate in a highly competitive and rapidly changing environment; therefore, new risk factors can arise, and it is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on our business or the extent to which any individual risk factor, or combination of risk factors, may cause results to differ materially from those contained in any forward-looking statement. The forward-looking statements included in this Quarterly Report on Form 10-Q are made as of the date hereof. We do not assume any obligation and do not intend to update or revise any forward-looking statements whether as a result of new information, future developments or otherwise except as may be required by securities laws.

Previous wording

We are a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-quality sports equipment, apparel, footwear and accessories. In addition to DICK’S Sporting Goods stores, we own and operate Golf Galaxy, Public Lands and Going Going Gone! specialty concept stores, and also offer our products online and through our mobile apps. We also own and operate DICK’S House of Sport and Golf Galaxy Performance Center, as well as GameChanger, a youth sports mobile platform for live streaming, scheduling, communications and scorekeeping. When used in this Quarterly Report on Form 10-Q, unless the context otherwise requires or specifies, any reference to “year” is to our fiscal year.

Current wording

We are a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-quality sports equipment, apparel, footwear and accessories. In addition to DICK’S Sporting Goods stores, we own and operate Golf Galaxy, Public Lands and Going Going Gone! specialty concept stores and offer our products online and through our mobile apps. We also own and operate DICK’S House of Sport and Golf Galaxy Performance Center stores, as well as GameChanger, a youth sports mobile platform for live streaming, scheduling, communications and scorekeeping. When used in this Quarterly Report on Form 10-Q, unless the context otherwise requires or specifies, any reference to “year” is to our fiscal year.

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 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 DICK’S Field House stores, 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.

Current wording

Through our strategic pillars of athlete experience, differentiated product, brand engagement and teammate experience, 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 DICK’S Field House stores, 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 ongoing elevated interest rates and inflationary pressures, which could impact consumer discretionary spending behavior and the promotional landscape in which we operate, as well as higher levels of 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.

Current wording

The macroeconomic environment in which we operate remains dynamic as a result of numerous factors, including ongoing elevated interest rates, inflationary pressures, potential changes to international trade relations from taxation and tariffs, all of which could impact pricing, consumer discretionary spending behavior and the promotional landscape in which we operate.

Previous wording

Despite the dynamic macroeconomic environment, we continue to drive comparable sales growth through execution of our core strategies. As a result of our strong performance, confidence in our strategic initiatives and operational strength, balanced against the macroeconomic environment and a shorter traditional holiday shopping season, we have raised our full year outlook for 2024 and now expect comparable sales growth for the year to be in the range of 3.6% to 4.2% and earnings per diluted share to be in the range of $13.65 to $13.95.

Current wording

As a result of our strong performance and confidence in our strategic initiatives, balanced against the macroeconomic environment, we have reaffirmed our full year outlook for 2025 and continue to expect comparable sales growth for the year to be in the range of 1% to 3% and earnings per diluted share to be in the range of $13.80 to $14.40, which does not include acquisition-related costs, investment losses or results from the recently announced plan to acquire Foot Locker.

Previous 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.

Current wording

▪Comparable sales performance – Our management considers comparable sales, which includes digital 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. Our digital revenue includes all eCommerce sales, including omni-channel transactions which are fulfilled by our stores, GameChanger subscriptions as well as revenue from our DICK’S Media Network. 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 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.

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 quarters. For further discussion of our cash flows refer to the “Liquidity and Capital Resources” section herein.

Previous wording

▪In the current quarter, we reported net income of $227.8 million, or $2.75 per diluted share, compared to $201.1 million, or $2.39 per diluted share, during the third quarter of 2023.

Current wording

▪In the current quarter, we reported net income of $264.3 million, or $3.24 per diluted share, compared to $275.3 million, or $3.30 per diluted share, during the first quarter of 2024.

Previous wording

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

Current wording

▪During the first quarter of 2025, we:

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▪Declared and paid a quarterly cash dividend in the amount of $1.10 per share of our common stock and Class B common stock.

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▪Declared and paid a quarterly cash dividend in the amount of $1.2125 per share of our common stock and Class B common stock;

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▪The following table summarizes store activity for the periods indicated:

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▪The following table summarizes store activity in fiscal 2025:

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(1)Includes our Golf Galaxy, Public Lands, Going Going Gone! and other specialty concept stores. As of November 2, 2024, we operated 109 Golf Galaxy stores, eight Public Lands stores and 20 Going Going Gone! stores. As of October 28, 2023, we operated 104 Golf Galaxy stores, seven Public Lands stores, 17 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 November 2, 2024, the Company operated 19 combo stores.

Current wording

(1)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 3, 2025, the Company operated 14 combo stores.

Previous 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.

Current 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 2024 period, and other data, and are 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.

Previous wording

(A) Column does not add due to rounding.

Current wording

(A)Column does not add due to rounding.

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(1)Revenue from retail sales is recognized at the point of sale, net of sales tax. Revenue from eCommerce sales, including vendor-direct sales arrangements, is recognized upon shipment of merchandise. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded. Revenue from gift cards and returned merchandise credits (collectively the “cards”) is deferred and recognized upon the redemption of the cards. The cards have no expiration date.

Current wording

(1)Revenue from retail sales is recognized at the point of sale, net of sales tax. Revenue from eCommerce sales, including vendor-direct sales arrangements, is recognized upon shipment of merchandise. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded. Revenue from gift cards and returned merchandise credits (collectively the “cards”) is deferred and recognized upon the redemption of the cards. The cards have no expiration date. Subscription revenue from our GameChanger platform is recognized ratably over the subscription period with our customers.

Previous wording

(2)Cost of goods sold includes: the cost of merchandise (inclusive of vendor allowances, inventory shrinkage and inventory write-downs for the lower of cost or net realizable value); freight; distribution; shipping; and store occupancy costs. We define merchandise margin as net sales less the cost of merchandise sold. Store occupancy costs include rent, common area maintenance charges, real estate and other asset-based taxes, general maintenance, utilities, depreciation and certain insurance expenses.

Current wording

(2)Cost of goods sold includes: the cost of merchandise and services (inclusive of vendor allowances, inventory shrinkage and inventory write-downs for the lower of cost or net realizable value and GameChanger costs); freight; distribution; shipping; and store occupancy costs. We define merchandise margin as net sales less the cost of merchandise and services sold. Store occupancy costs include rent, common area maintenance charges, real estate and other asset-based taxes, general maintenance, utilities, depreciation and certain insurance expenses.

Previous wording

(3)Selling, general and administrative expenses include store and field support payroll and fringe benefits, advertising, bank card charges, operating costs associated with our internal eCommerce platform, information systems, marketing, legal, accounting, other store expenses and all expenses associated with operating our customer support center.

Current wording

(3)Selling, general and administrative expenses include payroll and fringe benefits for our stores, field support, administrative and our GameChanger platform, advertising, bank card charges, operating costs associated with our internal eCommerce platform, technology, other store expenses and all expenses associated with operating our customer support center.

Previous wording

(4)Pre-opening expenses, which consist primarily of rent, marketing, including grand opening advertising costs, payroll, recruiting and other store preparation costs are expensed as incurred. Rent is recognized within pre-opening expense from the date the Company takes possession of a site through the date of store opening and during periods when stores are closed for remodeling. Beginning in fiscal 2024, the Company now reflects grand opening advertising costs within pre-opening expenses, which were historically included within selling, general and administrative expenses. Prior period amounts have been reclassified to conform to the current year presentation.

Current wording

(4)Pre-opening expenses, which consist primarily of rent, marketing (including grand opening advertising costs), payroll, recruiting and other store preparation costs are expensed as incurred. Rent is recognized within pre-opening expense from the date the Company takes possession of a site through the date of store opening and during periods when stores are closed for remodeling.

Previous wording

(6)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.

Current wording

(5)Beginning in fiscal 2025, we revised our method for calculating comparable sales to include Warehouse Sale locations beginning in the stores’ 14 th full month of operations, similar to our other store locations. 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 11, 2025.

Previous wording

The increase in comparable sales included a 4.8% increase in sales per transaction and a 0.6% decrease in transactions, and reflects growth in certain back-to-school categories including footwear, athletic apparel, and team sports, offset by declines in outdoor-related categories including hunt, apparel and equipment, and fitness.

Current wording

Net sales increased 5.2% to $3,174.7 million in the current quarter from $3,018.4 million for the quarter ended May 4, 2024, due primarily to a $131.9 million, or 4.5%, increase in comparable sales. The remaining increase in net sales was primarily attributable to new stores, including DICK’S Field House, DICK’S House of Sport and Golf Galaxy Performance Center locations. The increase in comparable sales included a 3.7% increase in sales per transaction and a 0.8% increase in transactions, and reflects growth in footwear, athletic apparel, licensed merchandise and team sports, offset by declines in outdoor equipment.

Previous wording

Income from operations increased to $286.0 million in the current quarter compared to $272.9 million for the quarter ended October 28, 2023.

Current wording

Income from operations increased to $366.1 million in the current quarter compared to $330.8 million for the quarter ended May 4, 2024.

Previous wording

Gross profit increased to $1,093.4 million in the current quarter from $1,061.5 million for the quarter ended October 28, 2023 and increased as a percentage of net sales by 88 basis points primarily due to higher merchandise margins, partially offset by occupancy deleverage. Merchandise margins as a percentage of net sales increased 104 basis points as a result of a favorable sales mix and the quality of our assortment. Additionally, merchandise margins for the prior year quarter included a $6.3 million write-down of inventory related to the Company’s business optimization. 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 $13.4 million and deleveraged 39 basis points as a percentage of net sales primarily driven by the unfavorable impact of the calendar shift. The remaining increase in gross profit as a percentage of net sales was driven by lower eCommerce shipping and fulfillment costs.

Current wording

Gross profit increased to $1,165.1 million in the current quarter from $1,095.3 million for the quarter ended May 4, 2024 and increased as a percentage of net sales by 41 basis points. Merchandise margins as a percentage of net sales increased 37 basis points as a result of the quality of our assortment. 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 $16.1 million and deleveraged six 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 costs, partially offset by higher supply chain costs.

Previous wording

Selling, general and administrative expenses increased 2.9% to $790.6 million in the current quarter from $768.2 million for the quarter ended October 28, 2023, and increased as a percentage of net sales by 61 basis points, which includes the unfavorable impact on net sales resulting from the calendar shift of approximately 65 basis points. The $22.4 million increase in current quarter expense is primarily due to strategic investments across marketing, technology and talent, and higher incentive compensation, partially offset by business optimization charges of $46.2 million incurred in the prior year quarter. The current quarter also includes a $15.5 million expense increase related to changes in the investment values of our deferred compensation plans, which is fully offset in Other Income.

Current wording

Selling, general and administrative expenses increased 5.7% to $785.5 million in the current quarter from $743.4 million for the quarter ended May 4, 2024, and increased as a percentage of net sales by 11 basis points. The $42.1 million increase in current quarter expense is primarily due to strategic digital and in-store investments across technology and talent, and marketing, partially offset by lower incentive compensation compared to the quarter ended May 4, 2024. The current quarter also includes a $9.5 million expense decrease related to changes in the investment values of our deferred compensation plans, which is fully offset in Other Expense (Income).

Previous wording

Pre-opening expenses decreased to $16.8 million in the current quarter from $20.3 million for the quarter ended October 28, 2023. Pre-opening expenses in any period fluctuate depending on the timing and number of new store openings and relocations.

Current wording

Pre-opening expenses decreased to $13.4 million in the current quarter from $21.1 million for the quarter ended May 4, 2024. Pre-opening expenses in any period typically fluctuate depending on the timing and number of new store openings and relocations.

Previous wording

Other income totaled $24.0 million in the current quarter compared to $10.1 million for the prior year quarter, and includes a $15.5 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.

Current wording

Other expense totaled $6.3 million in the current quarter compared to income of $25.4 million for the prior year quarter. The $31.7 million expense increase was primarily driven by non-cash losses from an investment in Foot Locker equity securities of $13.9 million, a $9.2 million decrease in interest income as a result of lower average cash and cash equivalents and lower average interest rates during the current quarter, and a $9.5 million expense increase 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

Our effective tax rate decreased to 23.3% in the current quarter from 25.1% for the quarter ended October 28, 2023. The effective tax rate for the prior year quarter was unfavorably impacted by a $3.4 million decrease in excess tax benefits resulting from a lower number of employee equity awards vesting and exercised in the prior year compared to the current quarter.

Current wording

Our effective tax rate increased to 24.0% in the current quarter from 19.6% for the quarter ended May 4, 2024. The effective tax rate for the prior year quarter was favorably impacted by a higher number of employee equity awards exercised, which resulted in $15.6 million of higher excess tax benefits in the prior year quarter compared to the current year.