Dick's Sporting Goods Inc

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Dix Sporting Goods second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again, press star 1. Thank you. I will now turn the conference over to Nate Gilt, Senior Director of Investor Relations. Nate, you may begin.

Good morning, everyone, and thank you for joining us to discuss our second quarter of 2024 results. On today's call will be Lauren Hobart, our President and Chief Executive Officer, and Navdeep Gupta, our Chief Financial Officer. A playback of today's call will be archived on our Investor Relations website, located at investors.dix.com for approximately 12 months. As a reminder, we will be making forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release, risk factor discussions in our filings with the SEC, including our last annual report on Form 10-K, as well as cautionary statements made during this call. We assume no obligation to update any of these forward-looking statements or information. Please refer to our investor relations website to find the reconciliation of our non-GAAP financial measures referenced in today's call. And finally, for your future scheduling purposes, we are tentatively planning to publish our third quarter 2024 earnings results on November 26, 2024. And with that, I'll now turn the call over to Lauren.

Thank you, Nate, and good morning, everyone. As we announced earlier this morning, we delivered a very strong quarter. Our Q2 results continue to demonstrate how well our long-term strategies are working and the great execution of our team. Powered by our compelling omnichannel athlete experience, differentiated product assortment, best-in-class teammate experience, and our ability to create deep engagement with the Dix brand, we are driving sustained top-line momentum and gaining market share. I am really proud of our team. Today we are again raising our full year outlook. This reflects our strong Q2 results and the confidence we have in our business. We now expect comp sales growth for the year to be in the range of 2.5% to 3.5%, and EPS to be in the range of $13.55 to $13.90. Now moving to our results. For the second quarter, our sales increased 7.8% to just under $3.5 billion. Adjusting for the calendar shift, our comps increased 4.5%. This strong comp was driven by growth in average ticket and in transactions. We saw more athletes purchase from us, and they spent more each trip compared to the prior year. With growth in sales, gross margin expansion, and SG&A leverage, we achieved EBT margin of nearly 14% and EPS of $4.37, both significantly ahead of last year. At the heart of our strategies is our omni-channel athlete experience. We're continuing to invest across our digital and store experiences to meet our athletes wherever they are, create confidence and excitement, and get product into their hands faster. We continue to be very pleased with the performance of House of Sport and our next generation 50,000 square foot Dick's locations, which internally we refer to as our field house concept. With House of Sport, we are redefining sports retail and creating very strong engagement with our athletes, our brand partners, and communities. It's also driving significant benefits to our real estate partners. We continue to hear from mall operators that our House of Sport locations drive increased traffic, sales per square foot, and occupancy rates for the malls where they operate. House of Sport is drawing unprecedented landlord interest and the opportunity to join many of the best shopping centers in the country. Later this month, we are excited to open our 15th House of Sport location and look forward to opening another five locations this year. We've also completely revolutionized our most typical format, our 50,000 square foot Dick store into what we're calling our Fieldhouse concept. Fieldhouse is inspired by House of Sport and includes interactive experiences and elevated presentation and service. These stores are performing exceptionally well. During Q2, we opened four Fieldhouse locations and with 17 now open, we look forward to opening nine more locations this year. Investing in our digital capabilities is central to our omni-channel athlete experience. This includes Dix.com and our Dix mobile app, which continues to be key to our business and have strong engagement with our athletes. We continue to make the digital shopping experience better for our athletes and recently launched several features to help accelerate this journey, including elevated imagery, 3D viewing of select footwear, and AI-powered chat features. As we've talked about, we're also focused on digital innovation. With Game Changer, we've built a platform that engages with youth sport families in a uniquely authentic way with the content most valuable to them, their kids' sports games. Over 6 million unique users engaged with Game Changer in Q2, an 11% increase from last year, averaging approximately 45 minutes per day in the app. speaking to the power of this content to sport families, coaches, and players. Game Changer allows us to connect with our athletes beyond the traditional shopping experience and reinforces our leadership in sport. Importantly, Game Changer families are some of Dick's most valuable customers. A Game Changer customer who also has a Dick's scorecard spends over two times more per year at Dick's than a typical scorecard customer. The Game Changer business model generates predictable, recurring, high-margin subscription revenue, and during Q2, it drove continued robust sales growth. Providing differentiated on-trend product, which is our second strategic pillar, helps make Dick's the go-to destination for sport in the U.S. We're excited about our assortment for the important back-to-school season and the product pipeline from our key brand partners and vertical brands. Our teammates are a critical driver of our success, and our third strategic priority is providing a best-in-class teammate experience. Our engagement surveys demonstrate that we are a fun and rewarding place to work. Our teammates are proud, personally committed, and optimistic about our future, and we're seeing fantastic improvement in turnover across our stores. Lastly, we're continuing to invest in Dick's brand building. We recently announced a new partnership with Team USA and LA28, designating Dick's as the official sporting goods retail provider. During the recent Olympic Games, we launched our latest marketing campaign that celebrates youth athletes and builds on our belief that sports have the power to change lives. In closing, we are very pleased with our second quarter performance, including the strong results at House of Sport, our Fieldhouse Concept, and Game Changer. and we are highly confident in our strategies to drive sustained and profitable growth. Before concluding, I'd like to thank all of our teammates across this company for their outstanding efforts and continued commitment to Dick's Sporting Goods. Our strong performance is a direct result of their efforts. With that, I'll turn the call over to Navdeep to share our financial results in more detail.