2022 Annual Report OUR BELIEF
WE BELIEVE SPORTS
HAVE THE POWER
TO CHANGE LIVES.
OUR COMMON PURPOSE
WE CREATE CONFIDENCE AND
EXCITEMENT BY INSPIRING,
SUPPORTING, AND PERSONALLY
EQUIPPING ALL ATHLETES
TO ACHIEVE THEIR DREAMS.
Dear Fellow Shareholders:
In 2022, DICK’S continued to build momentum and delivered another year of strong performance. Our 2022 results
underscore the value of our long-term business strategies and highlight our commitment to exceptional execution.
They also demonstrate the excellent relationship we have with our customers, whom we call athletes. Our athletes
continue to prioritize sport and are passionate about maintaining healthy, active lifestyles. They increasingly rely on
DICK’S to meet their needs and achieve their dreams, and we are proud to support them on this journey.
Our highlights for 2022 include strong overall annual performance, as well as a significant financial growth trajectory
over the past three years. Specifically:
• We delivered record sales of $12.4 billion, representing a 41% increase compared with our sales in 2019.
• We continued to gain market share at an accelerating pace, with considerable growth in our largest and most
important categories.
• We acquired seven million new athletes into our ecosystem, and we reached a record number of members in
our top-tier loyalty program, ScoreCard Gold, which accounts for more than 40% of our total sales.
• We posted an EBT margin rate of more than 11%, more than double our rate in 2019.
• We delivered earnings per diluted share of $10.78 and non-GAAP earnings per diluted share of $12.04, more
than three times higher than 2019.
The credit for these accomplishments belongs to our exceptional team. DICK’S employs more than 50,000
teammates across our stores, distribution centers and headquarters nationwide. These individuals have a passion for
our business, a strong work ethic and a dedication to excellence. Together, our teammates give DICK’S a true
competitive advantage, and I am deeply grateful to each of them for their ongoing support.
We believe that the key to providing a great experience for our athletes is to ensure that our teammates are highly
engaged. One of the ways we achieve this is through promoting a unique, family-oriented culture that supports
our teammates both in and out of the workplace. For example, our Teammate Relief Fund provides financial
assistance to teammates and their immediate families who are experiencing unexpected hardship. During 2022,
the Fund distributed approximately $500 thousand in aid to more than 350 teammates. We are pleased to note
that our outstanding commitment to our teammates continues to be recognized by national media organizations
and industry experts as a great place to work. As identified within our most recent teammate engagement survey,
DICK’S was also rated as a fun place to work by more than 80% of our teammates, representing a key driver of
engagement across our company.
75 Years of Supporting Athletes
In 2023, we are celebrating DICK’S 75th anniversary. This milestone presents us with an opportunity to reflect on our
growth story, which is a classic American dream including ingenuity and hard work. DICK’S was founded in 1948 by
Dick Stack. Dick had a dream of opening a local bait and tackle shop, and when his grandmother gave him $300 that
she had stashed in a cookie jar, he made his dream a reality. Over time, Dick opened a second location, and in 1984
his son, Ed Stack, with his siblings, purchased the business from their father. Under Ed’s leadership, DICK’S grew
from two small stores in upstate New York into the nation’s preeminent sporting goods retailer. We move forward with
Ed as our Executive Chairman, with pride in our past and with confidence in our ability to write the next chapter in our
growth story.
Changing Lives Through Sports
DICK’S has always believed that sports have the power to change lives. We hold this belief because we’ve seen the
impact sports can make. Sports have the power to change our perspectives, shape our character, and enrich our
communities. It’s with this belief in mind that in 2019, The DICK’S Sporting Goods Foundation set a goal to give one
million kids a chance to play by 2024. In February 2022, we surpassed this goal two years early. Now, we are aiming
higher. Our current goal is to impact two million youth athletes by 2024, and we are well on our way toward achieving
this. In support of this, and to honor our 75th anniversary, The DICK’S Sporting Goods Foundation will award 75 grants
worth $75,000 each to select youth sports organizations that we believe are changing lives through sports. Through
this commitment, we will donate more than $5.6 million to underfunded communities across the country during 2023.
Helping athletes achieve their dreams is what we do. Our presence in our communities and our commitment to
creating access to sport in every one of them sets us apart in the marketplace.
We also continue to advance our sustainability goals, which are outlined in our annual Purpose Playbook. The
Purpose Playbook highlights the efforts of our teammates across our four major sustainability pillars. One of these
pillars centers on protecting the environment, and we made progress in 2022 toward the goal of reducing our
greenhouse gas emissions by 30% by 2030. Another of our pillars is to promote inclusivity, and we have pledged to
allocate $300 million of our annual spending to diverse suppliers by 2025.
Rewarding Our Shareholders
We leverage our financial strength to increase our investment in long-term growth opportunities and to return capital to
our shareholders. Since 2021, we have returned nearly $2.4 billion to our shareholders, and in 2023, we more than
doubled our quarterly dividend, which equates to an annualized payout of $4.00 per share. This decision underscores
our confidence in the structurally higher sales and earnings profile of our business and our ongoing focus on
rewarding the loyalty of our shareholders.
We believe our confidence in our future is well placed. Since 2017, we have methodically transformed virtually every
aspect of our business. DICK’S has emerged from this process solidly positioned not only to maintain our leadership
but to extend it within our large and highly fragmented industry. In 2023, we will continue to execute our current
strategies. We will also build on our exceptional 2022 results, which set a new bar for us in both sales and profitability
and provide an excellent foundation for growth.
Driving Continuous Improvement
Just like the athletes we serve, we believe we can always do better, and we demonstrate this by driving continuous
improvement across every aspect of our business.
Within merchandising, we have curated an industry-leading assortment of products that are both differentiated and
on-trend. We maintain strong relationships with key brand partners who value that DICK’S is rooted in sport and our
ability to showcase their complete brand portfolios. We are also committed to developing relationships with new and
emerging brands, as well as creating powerhouse vertical brands.
Providing an unparalleled athlete experience is a top priority. In our stores, we have made significant investments in
training to provide an enhanced level of service to our athletes, as well as to ensure that DICK’S remains a fun and
rewarding place to work. We also leverage technology to provide our athletes with access to unique in-store
elements, such as HitTrax™ batting cages, TrackMan™ golf simulators, and premium full-service footwear decks.
These experiential elements help to set DICK’S apart and inspire confidence in our athletes. Furthermore, our stores
remain the hub of our omnichannel experience. During 2022, they enabled over 90% of our total sales, including a
thriving in-store pickup and curbside business.
Over time, we have built the most extensive youth sports dataset in our industry. Combined with our digital capabilities
and our expertise in data science, this dataset represents a key strategic advantage. We are committed to leveraging
these collective assets to deliver a seamless athlete experience, including creating personalized marketing strategies
that truly resonate with our athletes and drive loyalty. We also continue to innovate within the multibillion-dollar youth
sports technology market. Our GameChanger app has become the premier scoring and statistics mobile app for youth
sports, and we are capitalizing on this to strengthen our relationships with young athletes and their families.
We have also innovated through new specialty concepts, such as Public Lands and Golf Galaxy Performance Center,
which cater to the precise needs of outdoor enthusiasts and avid golfers. We recently acquired leading outdoor
retailer, Moosejaw, underscoring our commitment to expanding and innovating within the multibillion-dollar
outdoor category.
There is no greater example of our commitment to improving the athlete experience than DICK’S House of Sport,
which we launched in 2021. House of Sport fosters a deep sense of community involvement, while elevating
traditional expectations for retail service, products, and experience. As a result, it has become a destination where
athletes can fuel their passions. We currently have three House of Sport locations, all of which have exceeded our
initial performance expectations, and we expect House of Sport to be a significant part of our future growth story. Over
the next two years, we plan to open approximately 20 additional locations, and by 2027, we estimate that we will have
between 75 and 100 House of Sport locations nationwide.
Defining Our Future
We will continue to create and define our future, and as the largest U.S. sporting goods retailer, we are well-positioned
to extend our lead and continue gaining share in a vibrant $140 billion industry. On behalf of our Board of Directors,
our management team and our teammates, thank you for your continued belief in our company and commitment to
our shared vision for DICK’S role in the future of sport. We appreciate your support.
Lauren R. Hobart
President and Chief Executive Officer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 28, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File No. 001-31463
DICK'S SPORTING GOODS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
16-1241537
(I.R.S. Employer Identification No.)
345 Court Street, Coraopolis, PA 15108
(Address of principal executive offices)
(724) 273-3400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $0.01 par value
Trading Symbol(s)
DKS
Name of Each Exchange on which Registered
The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D- 1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the voting common equity held by non-affiliates of the registrant was $4,821,879,309 as of July 29, 2022
based upon the closing price of the registrant's common stock on the New York Stock Exchange reported for July 29, 2022.
As of March 17, 2023, DICK’S Sporting Goods, Inc. had 62,047,488 shares of common stock, par value $0.01 per share, and 23,570,633
shares of Class B common stock, par value $0.01 per share, outstanding.
Documents Incorporated by Reference: Part III of this Annual Report on Form 10-K incorporates certain information from the registrant's
definitive proxy statement for its Annual Meeting of Stockholders to be held on June 14, 2023 (the “2023 Proxy Statement”).
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TABLE OF CONTENTS
PAGE
Part I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Item 6. [Reserved]
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Part III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services
Part IV
Item 15. Exhibits and Financial Statement Schedules
Item 16. Form 10-K Summary
SIGNATURES
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Forward-Looking Statements
We caution that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of
1995) contained in this Annual Report on Form 10-K 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 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 and rising interest
rates; supply chain disruptions, including factory closures and port congestion, which are resulting in apparel overages from late
arriving inventory and elevated rising container and transportation costs; the normalization of sales in certain categories,
including fitness and outdoor equipment; the adequacy of our cash flow; our ability to control expenses; 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 and our plans to add new retail
concepts and experiential stores; plans to open additional DICK’S House of Sport stores in 2023; plans to convert the existing
Field & Stream stores to DICK’S House of Sport stores, expanded DICK’S Sporting Goods stores, or other specialty concept
stores; plans to provide our vertical brands with improved space in-store, increased marketing and expansion into additional
product categories; our diversity goals; the belief that our inventory is healthy and well-positioned to meet the demands of our
athletes in 2023; our decision to redeem our intention to repay the principal outstanding amounts of the Convertible Senior
Notes in shares and our intention to unwind the remaining portions of the convertible bond hedge and warrants; our intention to
offset the dilutive impact of anticipated conversions of the Convertible Senior Notes through the shares received from the
convertible bond hedge and share repurchases using excess cash, free cash flow or borrowings on our unsecured $1.6 billion
revolving credit facility (the “Credit Facility”); our belief that the Inflation Reduction Act will not materially impact our
financial results, including our annual 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 100 stores to premium full-service footwear decks, and continued
investments in technology to enhance our store fulfillment, in-store pickup and other foundational capabilities; and our plans to
make improvements within our existing stores and new store development and to continue investing in technology to enhance
our store fulfillment and in-store pickup capabilities; anticipated store openings and relocations; plans to return capital to
stockholders through dividends and share repurchases; and our future results of operations and financial condition.
Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which
may cause actual results to differ materially from those expressed or implied in the forward-looking statements. A detailed
discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking
statements is included in the section titled “Risk Factors” (Item 1A of this Form 10-K). 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 Annual Report on Form 10-K are made as of this date. 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.
PART I
ITEM 1. BUSINESS
General
DICK’S Sporting Goods, Inc. (together with its subsidiaries, referred to as “the Company”, “we”, “us” and “our” unless
specified otherwise) is a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-
quality sports equipment, apparel, footwear and accessories. As of January 28, 2023, we operated 728 DICK’S Sporting Goods
locations across the United States, serving and inspiring our customers, whom we refer to as athletes, to achieve their personal
best through interactions with our dedicated employees, whom we refer to as our teammates, in-store experiences and unique
specialty shop-in-shops. 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 both 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 app for
scheduling, communications, live scorekeeping and video streaming.
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We are celebrating our 75th anniversary as a Company in 2023 and are proud of our growth and accomplishments since our
inception. We were founded and incorporated in 1948 in New York under the name Dick’s Clothing and Sporting Goods, Inc.
when Richard “Dick” Stack, the father of Edward W. Stack, our Executive Chairman, opened his original bait and tackle store
in Binghamton, New York. Edward W. Stack joined his father's business full-time in 1977 and in 1984 became President and
Chief Executive Officer of the then two-store chain. In November 1997, we reincorporated as a Delaware corporation, and in
April 1999 we changed our name to DICK’S Sporting Goods, Inc.
Our executive office is located at 345 Court Street, Coraopolis, Pennsylvania 15108 and our phone number is (724) 273-3400.
Our website is located at dicks.com. The information on our website does not constitute a part of this Annual Report on
Form 10-K. We include on the investor relations portion of our website (dicks.com/investors), free of charge, copies of our
Annual and Quarterly Reports on Forms 10-K and 10-Q, Current Reports on Form 8-K and amendments to those reports filed
or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
When used in this Annual Report on Form 10-K, unless the context otherwise requires or unless otherwise specified, any
reference to “year” is to the Company’s fiscal year, which ends on the Saturday closest to the end of January each year.
Business Strategy
Since 1948, our Company has believed in the power of sports to change lives, and we are committed to bringing this belief to
life through our athlete experience, brand engagement, differentiated product, and most importantly, our teammates. With this
belief as our foundation, our common purpose is to create confidence and excitement by inspiring, supporting, and personally
equipping all athletes to achieve their dreams. Driven by this common purpose and our commitment to all athletes, our mission
is to:
•
•
Create an environment where passionate and skilled teammates thrive;
Create and build leading brands that serve and inspire athletes;
• Make a lasting impact on communities through sport; and
•
Deliver shareholder value through growth and relentless improvement.
We believe that through this mission and the following key elements of our business strategy, we can be the best sports
company in the world.
Reimagining the Athlete Experience
We put our athletes at the center of everything we do, and we are committed to creating a unique and differentiated shopping
experience for them. We seek to proactively manage our in-stock merchandise positions in our diverse category portfolio and
elevate our merchandise presentation to provide a clear point of view for in-demand items, such as our premium full-service
footwear departments, which are offered in nearly two-thirds of our DICK’S Sporting Goods stores as of the end of fiscal 2022.
We provide a wide range of in-store support services and incorporate experiential elements and technology into our stores to
better engage and serve our athletes, including our HitTrax® baseball simulators in nearly 200 stores and our investment in
Trackman technology, which is used to enhance the fitting and lesson experience for our athletes in all of our Golf Galaxy
stores. We also offer soccer shops in nearly 200 stores, which feature enhanced in-store elements including an elevated cleat
shop, an expanded selection of licensed jerseys and soccer trial cages in select locations, which are all supported by especially
trained in-store soccer experts to help better serve our athletes.
We develop and test new store prototypes and concepts to grow our business, while incorporating key learnings into the rest of
our chain. Since fiscal 2021, we have opened three DICK’S House of Sport stores, which are built around experience, service,
community and product. In fiscal 2023, we plan to open nine additional DICK’S House of Sport stores, which will provide
experiential destinations for our athletes, drive strong engagement with our key brand partners, and continue to set us apart as a
clear market leader of the sporting goods industry. In fiscal 2021, we also launched our redesigned Golf Galaxy Performance
Centers, which are equipped with Trackman and Biomech golf technologies and include an elevated staffing and service model
to ensure our teammates become trusted advisors to golf enthusiasts of all levels. In addition to innovating within our core
business, we launched Public Lands, an omni-channel specialty concept for our outdoor athletes, in fiscal 2021.
We continue to improve our service and selling culture, with an emphasis on engaging and inspiring our athletes. We provide
our teammates with robust training to increase knowledge about our products, which builds confidence for our athletes through
the power of our opinion and expertise. We equip our teammates with current technology to improve their productivity and
enhance the athlete experience, including providing real-time product information, detailed product descriptions, inventory
availability and alternative product recommendations as well as other metrics and communications while on the sales floor.
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Our marketing program is focused on inspiring athletes to participate in sports and building loyalty to DICK’S Sporting Goods
through brand-building campaigns, including the expansion of our ScoreCard Rewards loyalty program. In fiscal 2019, we
launched ScoreCard Gold, which provides our top-tier athletes with more ways to earn ScoreCard points and member-only
benefits, including early access to sales and product launches. Our loyalty program has over 25 million active members who
account for over 70% of total sales, which includes 7 million active Gold athletes who account for 40% of total sales. As of the
end of fiscal 2022, we had over 150 million athletes in our database, including over 20 million new athletes in the past three
years who skewed younger and more female.
We leverage the robust data in our database to enhance the athlete experience by engaging our athletes through digital
marketing and providing them with personalized offers and communications. We also use data science to improve the speed at
which we deliver products to our athletes through optimized order routing and to enhance our in-stock and merchandise
availability positions. Our GameChanger mobile app has also provided an opportunity for us to innovate within youth sports
technology and connect with athletes and their communities by offering video streaming, highlights and scorekeeping for youth
sports programs.
Optimizing Our Assortment to Meet the Needs of All Athletes
We carry a full range of products within each category, including premium items for the sports enthusiast. We believe our
compelling industry-leading product assortment in each sporting goods category offers our athletes a wide range of good, better
and best price points and enables us to address the needs of our athletes, from beginner to sports enthusiast, which distinguishes
us from other large format sporting goods stores. We focus on those growth categories in which we believe an opportunity to
gain market share exists. We support these growth categories, which have recently included the apparel, footwear, golf, and
team sports categories, with greater quantities of enthusiast product and improved presentation and in-stock positions.
We deliver a differentiated multi-brand experience to our athletes through our offering of national and vertical brands.
National brands
We carry a wide variety of well-known brands, including but not limited to adidas, Asics, Brooks, Callaway Golf,
Carhartt, Columbia, Easton, Hoka, Nike, On, Patagonia, Peloton, TaylorMade, The North Face, Titleist, Under Armour
and Yeti. Our ability to showcase an entire brand portfolio is valued by our strategic partners, and our relationships with
key brands provide access to wider, deeper and exclusive product offerings that provide authenticity and credibility to
our athletes and that further differentiate us from our competitors. During fiscal 2021, we also partnered with Nike to
provide a connected marketplace in our DICK’S mobile app which gives our athletes access to exclusive product,
experiences and content.
Vertical brands
Our vertical brands include brands that we own across hardlines and softlines and are available exclusively in our stores
and online such as Alpine Design, CALIA, DSG, ETHOS, Fitness Gear, MAXFLI, Nishiki, Quest, Top-Flite, VRST, and
Walter Hagen, as well as brands that we license from third parties including adidas (baseball and football) and Prince
(tennis). These brands offer high-quality, on-trend products to our athletes with compelling technical and performance
attributes while providing differentiation in our merchandise assortment at higher gross margins as compared to sales of
similar products from national brands. Our vertical brands are our second largest brand category, representing $1.7
billion, or approximately 14%, of consolidated net sales in fiscal 2022. We consider our vertical brand strategy to be a
key area of opportunity to increase productivity in our stores and online, and we have invested in a research,
development and procurement staff to support its growth.
Our Improving Omni-channel Platform and Fulfillment Capabilities
We believe that when our athletes connect with the DICK’S Sporting Goods brand, they expect a seamless shopping
experience, regardless of the manner in which they choose to shop with us. Like our athletes, we view retail as an omni-channel
experience that seamlessly integrates our stores and online channels.
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Our stores remain at the core of our omni-channel platform. We believe our store base gives us a competitive advantage over
our online-only competitors, as our physical presence allows us to better serve our athletes by creating strong engagement
through interactive in-store elements, offering the convenience of accepting in-store returns or exchanges and expediting
fulfillment of eCommerce orders, the ability to place online orders in our stores if we are out of stock in the retail store, buy-
online, pick-up in store, curbside pickup and return, and same-day delivery capabilities with Instacart or DoorDash, all while
offering direct, live access to well-trained and knowledgeable teammates. In fiscal 2022, approximately 70% of online sales
were fulfilled directly by our stores, which serve as localized points of distribution, and they enabled 90% of our total sales
through online fulfillment and in-person sales.
We continually improve the functionality and performance of our eCommerce sites and mobile app, which has included a faster
and more convenient checkout process with new payment options, greater visibility and accuracy of delivery dates, improved
page responsiveness, enhanced integration of our ScoreCard loyalty program, new content development through our Pro Tips
platform and localized website experiences. Additionally, we continue to leverage our omni-channel platform, fulfillment
centers and our delivery partnership with FedEx, which have enabled us to provide our athletes with faster delivery times. In
fiscal 2022, we invested in our digital experience by expanding our personalization capabilities and other features, and we plan
to continue building enhancements on those features to assist our athletes in finding the right product, at the right time. We also
plan to continue investing in in-store technology to further enhance fulfillment efficiency with intelligence to improve in-stocks
and merchandise availability, and by improving our speed to athletes with optimized order routing.
Merchandising
The following table sets forth the approximate percentage of our sales attributable to the following categories for the fiscal
years presented:
Category
Hardlines (1)
Apparel
Footwear (2)
Other (3)
Total
2022
Fiscal Year
2021
2020
40 %
34 %
24 %
2 %
100 %
44 %
34 %
21 %
1 %
100 %
46 %
33 %
19 %
2 %
100 %
(1)
(2)
(3)
Includes items such as sporting goods equipment, fitness equipment, golf equipment and hunting and fishing gear.
Includes athletic shoes for running, walking, tennis, fitness and cross training, basketball and hiking. In addition, this category also
includes specialty footwear, including casual footwear and a complete line of cleats for team sports.
Includes our non-merchandise sales categories, including in-store services, shipping revenues, software subscription revenues and
credit card processing revenues.
Additional information about our sales categories is included within Part IV. Item 15. Exhibits and Financial Statement
Schedules, Note 1–Basis of Presentation and Summary of Significant Accounting Policies of this Annual Report on Form 10-K.
Selling Channels
We offer products to our athletes through our retail stores and online, and although we sell through both of these channels, we
believe that sales in one channel are not independent of the other. Regardless of the sales channel, we seek to provide our
athletes with a seamless omni-channel shopping experience.
Retail Stores
Our DICK’S Sporting Goods, Golf Galaxy and other specialty concept stores, including Public Lands, are designed to create an
exciting and interactive shopping environment for the sporting enthusiast that highlights our extensive product assortments and
value-added services. Each of our DICK’S Sporting Goods stores unites several sports specialty stores under one roof and
typically contains the following specialty shops: Team Sports, Athletic Apparel, Outdoor, Golf, Fitness and Footwear. We
believe our “store-within-a-store” concept creates a unique shopping environment by combining the convenience, broad
assortment and competitive prices of large format stores with the brand names, differentiated product selection and customer
service of a specialty store. We monitor and evaluate store performance on an ongoing basis and reallocate space in our stores
to categories and products that we believe can drive sales growth, including our removal of the hunt department from many of
our stores, in which we reallocated product space to a localized assortment of categories. In addition, we operate Going Going
Gone! and Warehouse Sale stores, through which we are able to improve our clearance optimization through the consolidation
of clearance inventory for omni-channel selling opportunities to better serve our value athletes.
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We seek to expand our presence through the opening of new stores and believe that growing our store network and eCommerce
business simultaneously will enable us to profitably grow the business by delivering an omni-channel shopping experience for
our athletes. Approximately three-quarters of our DICK’S Sporting Goods stores will be up for lease renewal at our option over
the next five years, which provides us with the opportunity to relocate, close, or renegotiate lease terms for these stores. In
recent years, we have opportunistically opened new stores in under-penetrated markets and leveraged the significant flexibility
within our existing real estate portfolio to capitalize on real estate opportunities as leases came up for renewal. While we plan to
continue to leverage this flexibility to capitalize on future real estate opportunities, we plan to grow our square footage footprint
in the upcoming year. Over the long-term, our DICK’S House of Sport stores will be the primary driver of this growth.
eCommerce
Through our websites, we seek to provide our athletes with in-depth product information and the ability to shop with us at any
time. We continue to innovate our eCommerce sites and applications with customer experience enhancements, new releases of
our mobile and tablet apps, and the development of omni-channel capabilities that further integrate our online presence with our
brick and mortar stores to provide our athletes with an omni-channel shopping experience. Currently, we have return-to-store
capabilities for online orders, the ability to place online orders in our stores if we are out of stock in the retail store, buy-online,
pick-up in store, and curbside pickup and return capabilities. Our websites also give us the ability to ship online orders from our
retail locations, which reduces delivery times for online orders and improves inventory productivity and availability.
Purchasing, Distribution and Customer Fulfillment
During fiscal 2022, we purchased merchandise from approximately 1,500 vendors, with Nike, our largest vendor, representing
approximately 23% of our merchandise purchases. No other vendor represented 10% or more of our fiscal 2022 merchandise
purchases. We do not have long-term purchase contracts with any of our vendors; all of our purchases from vendors are made
on a short-term purchase order basis.
We currently operate five regional distribution centers which enable us to supply stores with merchandise. Vendors ship floor-
ready merchandise to our distribution centers, where it is processed and allocated directly to our stores or stored temporarily.
Our distribution centers are responsible for consolidating damaged or defective merchandise from our stores that is being
returned to vendors. We have contracted with common carriers to deliver merchandise from all of our distribution centers to our
stores, which generally facilitates prompt and efficient distribution to our stores to enhance in-stocks, minimize freight costs
and improve inventory turnover. During fiscal 2022, our stores received over 90% of their merchandise through our distribution
network; the remaining merchandise was shipped directly to our stores from our vendors.
We leverage our store and distribution center network, two eCommerce fulfillment centers (one owned and one operated by a
third-party, which we exited in February 2023) and direct shipping capabilities from our vendors to ensure merchandise
delivery speed to our athletes and to minimize shipping costs. During fiscal 2022, we also maintained offsite storage locations
following the supply chain disruptions caused by COVID-19.
Competition
The competition among retailers that sell sporting goods is highly fragmented. We compete with many retail formats, including
large format sporting goods stores, traditional sporting goods stores, specialty stores, mass merchants and department stores,
online retailers, and vendors selling directly to consumers through retail stores and online. We seek to attract athletes by
offering a wide range of products that enable us to address the needs of all athletes, from beginner to enthusiast, and by utilizing
distinctive merchandise presentation in stores to create a unique shopping environment. We differentiate ourselves from our
competitors by showcasing our and key partners’ brands through brand shops and giving access to wider, deeper and exclusive
product offerings that provide authenticity and credibility to our athletes. We believe our store base gives us a competitive
advantage over our online-only competitors, as our physical presence allows us to better serve our athletes by creating strong
engagement. We also offer superior service both in-store and via a seamless omni-channel experience which includes buy-
online, pick-up in store and curbside pickup and return capabilities.
Seasonality
Our business is subject to seasonal influences, including the holiday selling season and the impact of unseasonable weather
conditions. Although our highest sales and operating income results have historically occurred in the second and fourth fiscal
quarters, our business has increasingly been less affected by seasonal fluctuations in recent years. However, results for any
quarter are not necessarily indicative of the results that may be achieved for the fiscal year.
7
Proprietary Rights
We have a number of service marks and trademarks registered with the United States Patent and Trademark Office, including
various versions of the following: “Alpine Design”, “CALIA”, “DICK’S”, “DICK’S Sporting Goods”, “DSG”, “ETHOS”,
“Fitness Gear”, “GameChanger”, “Golf Galaxy”, “The GolfWorks”, “MAXFLI”, “Monarch”, “Nishiki”, “Primed”, “Public
Lands”, “Quest”, “ScoreCard”, “ScoreRewards”, “Top-Flite”, “VRST” and “Walter Hagen”. We also have a number of
registered domain names, including “dickssportinggoods.com”, “dicks.com”, “golfgalaxy.com”, “publiclands.com”,
“goinggoinggone.com”, “calia.com”, “vrst.com”, and “gamechanger.com”. Our service marks, trademarks and other intellectual
property are subject to risks and uncertainties that are discussed within Item 1A. “Risk Factors”.
We have also entered into licensing agreements for brands that we do not own, which provide for exclusive and/or non-
exclusive rights to use names such as “adidas” (baseball and football) and “Prince” (tennis) for specified product categories or
certain products and, in some cases, specified sales channels. These licenses are long-term business relationships and contain
customary termination provisions at the option of the licensor including, in some cases, termination upon our failure to purchase
or sell a minimum volume of products and may include early termination fees. Our licenses are also subject to general risks and
uncertainties common to licensing arrangements that are described within Item 1A. “Risk Factors”.
Governmental Regulations
We must comply with various federal, state and local regulations, including regulations relating to consumer products and
consumer protection, advertising and marketing, labor and employment, data protection and privacy, intellectual property, the
environment and tax. In addition, in connection with the sale of firearms in our stores, we must comply with a number of
federal and state laws and regulations related to the sale of firearms and ammunition. Ensuring our compliance with these
various laws and regulations, and keeping abreast of changes to the legal and regulatory landscape present in our industry, may
cause us to expend considerable resources. For additional information, see the risk factors herein in “Item IA. Risk Factors.”
Social Responsibility
In addition to our mission of supporting our athletes to achieve their dreams, we are committed to supporting youth sports in
local communities. We sponsor thousands of teams in various sports and support the philanthropic efforts of our private
corporate foundation, The DICK’S Sporting Goods Foundation. In partnership with The DICK’S Sporting Goods Foundation,
in 2014 we launched our Sports Matter initiative, a philanthropic effort singularly focused on supporting youth sports. Through
Sports Matter, we remain committed to addressing the barriers of participation in youth sports, including accessibility of
equipment, safe recreational space to play, league costs to maintain youth sports programs in local communities and family
registration fees often required for youth sport participation. Since the establishment of the Sports Matter initiative, the
Company and The DICK’S Sporting Goods Foundation have committed over $170 million to help save thousands of youth
sports teams and give more than one million young athletes across all 50 states the chance to play.
We also support The DICK’S Sporting Goods Foundation in expanding economic opportunities in local communities through
programs established for education and the outdoors. During 2021, the DICK’S Sporting Goods Foundation entered into a long-
term partnership with a public school district located outside of Pittsburgh, PA to help serve the needs of students, families and
staff in the community and create access to holistic resources and programming to support their education and well-being.
Additionally, in partnership with The DICK’S Sporting Goods Foundation, we established the Public Lands Fund in 2021,
which provides grants to local and national non-profit organizations that protect and maintain public lands, break down the
barriers of access to outdoor experiences, and improve inclusion and equity in the outdoors.
We are also dedicated to supporting our teammates professionally and personally, as they are the core of our organization. In
2021, we established the Teammate Relief Fund, a public charity that provides financial support to teammates and their
immediate families facing unexpected financial difficulty beyond their control. The Teammate Relief Fund is available to all
DICK’S teammates and is funded by DICK’S Sporting Goods and teammate donations.
Human Capital Management
As of January 28, 2023, we employed approximately 18,800 full-time and 34,000 part-time teammates. Total employment
figures fluctuate throughout the year and typically peak during the fourth quarter in alignment with the holiday selling season.
None of our teammates are covered by a collective bargaining agreement.
8
As stated in our mission, we strive to create an environment where dedicated, optimistic, authentic and high-integrity
teammates thrive. We believe our teammates’ dedication to creating a positive experience for our athletes is what drives our
success as a company, and we are committed to creating a great place to work for our teammates through competitive wages
and benefits, promoting teammate safety, health and well-being, providing learning and career development opportunities and
promoting diversity, equity and inclusion.
Wages and Benefits
In addition to offering our teammates competitive salaries and wages, we offer comprehensive health and retirement benefits to
eligible teammates, which typically include all full-time hourly and salaried teammates. Our benefits include, but are not
limited to, medical, dental, vision, disability and life insurance, flexible paid time off programs covering parental and family
leave, hybrid work arrangements, and a company-matched retirement savings 401(k) plan that vests immediately and is open
for all teammates.
We are committed to equal pay for equal work independent of gender and race when establishing and maintaining wages. We
achieved and maintained 100% female-to-male unadjusted median pay ratio in fiscal 2022 and fiscal 2021.
Safety, Health and Well-Being
We are committed to ensuring the safety, health and well-being of our teammates. We have robust policies, procedures and
training in place to ensure a safe environment across our organization, including a comprehensive crisis management plan that
allows us to respond immediately to critical incidents involving people, company assets, our business or our reputation. We
provide support to our teammates to enable them to maintain and improve their professional and personal lives, which includes
an employee assistance plan, an onsite health and fitness center, and a childcare facility at our corporate headquarters, which we
refer to as our Customer Support Center (“CSC”). We also provide opportunities for volunteerism and launched our Teammate
Relief Fund to offer additional support to our teammates experiencing hardship.
Training and Development
We empower our teammates to develop their careers and provide tools that are necessary for them to reach their personal and
professional goals. We have created rotational development programs in various functional disciplines to develop leadership
pipelines and offer various live and recorded training programs across the organization based on job role and function,
including safety, compliance, leadership or other skills, as well as store manager onboarding programs. We also provide tuition
reimbursement programs for all eligible teammates to pursue a job-related degree at an accredited college or university, and we
offer a part-time MBA program online in partnership with a local university.
Diversity, Equity and Inclusion
We are committed to creating a workplace environment and culture that supports, celebrates and honors each individual and to
promoting inclusion for all teammates. Doing so strengthens our ability to serve all of our athletes, drives innovation and
growth, and enables us to attract and retain the best talent. Our Diversity, Equity, and Inclusion Council, formed in 2019, is
comprised of a group of teammates from across our organization who represent diverse backgrounds, roles, experiences and
communities, and was formed to help steer and support our diversity, equity, and inclusion efforts. Teammates with shared
interests have come together in various resource groups to discuss shared experiences, increase awareness, offer mentorship to
others and communicate with senior management. We use the feedback provided by our Diversity, Equity and Inclusion
Council, various resource groups, and other surveys provided to our teammates to foster an inclusive workplace.
We have committed to increasing diversity at all levels of our organization. Consistent with this commitment, our Board of
Directors includes women and people of color and reflects a diversity of background and experience in varying substantive
areas relevant to our operations and industry.
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Information About Our Executive Officers
The following table and accompanying narrative sets forth the name, age and business experience of our current Executive
Officers as of March 1, 2023:
Name
Edward W. Stack
Lauren R. Hobart
Navdeep Gupta
Ray Sliva
Vlad Rak
John E. Hayes III
Julie Lodge-Jarrett
Age
Position
68
54
50
49
46
60
47
Executive Chairman
President and Chief Executive Officer
Executive Vice President - Chief Financial Officer
Executive Vice President - Stores
Executive Vice President - Chief Technology Officer
Senior Vice President - General Counsel and Secretary
Senior Vice President - Chief People and Purpose Officer
Edward W. Stack is our Executive Chairman. From 1984 to January 2021, Mr. Stack served as our Chairman and Chief
Executive Officer taking over operation of the Company after his father and our founder, Richard “Dick” Stack, retired from
our then two-store chain. Mr. Stack has served us full-time since 1977 in a variety of positions, including President, Store
Manager and Merchandise Manager.
Lauren R. Hobart became our President and Chief Executive Officer effective February 1, 2021 and has served as our President
since May 2017. Ms. Hobart was appointed to the Company’s Board of Directors in January 2018. Ms. Hobart joined DICK’S
Sporting Goods in February 2011 as our Senior Vice President and Chief Marketing Officer. In September 2015, Ms. Hobart
was promoted to Executive Vice President and Chief Marketing Officer and in April 2017 to Executive Vice President - Chief
Customer & Digital Officer. Prior to joining DICK’S Sporting Goods, Ms. Hobart spent 14 years with PepsiCo, Inc., most
recently serving as Chief Marketing Officer for its carbonated soft drink portfolio in the United States. During her career at
PepsiCo, Ms. Hobart held several other significant marketing roles and also spent several years in strategic planning and
finance. Prior to joining PepsiCo, Ms. Hobart worked in commercial banking for JP Morgan Chase and Wells Fargo Bank. In
addition, Ms. Hobart joined the Board of Directors of Marriott International, Inc. (NASDAQ: MAR) on March 15, 2023. Ms.
Hobart also served as a member of the Board of Directors of YUM! Brands, Inc. (NYSE: YUM) from 2020 - 2022 and served
as a member of the Board of Directors of Sonic Corp. (NASDAQ: SONC) from 2014 - 2018.
Navdeep Gupta became our Executive Vice President, Chief Financial Officer effective October 1, 2021 and served as our
Senior Vice President, Chief Accounting Officer from November 2017 through September 2021. Prior to joining the Company,
Mr. Gupta most recently served as the Senior Vice President of Finance at Advance Auto Parts, Inc., where he held numerous
leadership roles from 2006 to 2017, including Chief Audit Executive, Vice President of Finance and Treasurer, and Director of
Finance. Previously, Mr. Gupta held management roles at Sprint Nextel Corporation (now part of T-Mobile US, Inc.).
Ray Sliva became our Executive Vice President, Stores, in January 2023. Prior to joining DICK’S Sporting Goods, Mr. Sliva
spent 23 years at Best Buy Co., Inc., where he most recently served as Chief People Officer and was responsible for leading a
broad range of employee engagement initiatives. During his tenure at Best Buy, Mr. Sliva held various leadership roles
including President of Retail, Senior Vice President of Retail Operations, Senior Vice President/Territory Manager, District
Manager, Customer Experience Director, General Manager and District Human Resources Manager.
Vlad Rak became our Chief Technology Officer in April 2020. Prior to joining DICK'S Sporting Goods, Mr. Rak served as
Senior Vice President & Chief Technology Officer at Merck & Co., Inc. from 2019 to 2020. Prior to that, Mr. Rak served as
Vice President, Enterprise Architecture, Innovation, Platforms & Portfolio at Nike, Inc. from 2016 to 2019. Previously, Mr. Rak
also held senior technology leadership roles at The Walt Disney Company and Wyndham Worldwide Corp. (now Travel &
Leisure Co.). In April 2022, Mr. Rak joined the Board of Directors of Mastech Digital Inc (NYSEAMERICAN: MHH).
John E. Hayes III became our Senior Vice President - General Counsel and Secretary in January 2015. Prior to joining DICK’S
Sporting Goods, Mr. Hayes served as Senior Vice President and General Counsel of Coldwater Creek Inc. from February 2009
to September 2014. During his tenure with Coldwater Creek, Mr. Hayes also served as the Company’s interim Chief Financial
Officer from November 2009 to April 2010 and as Senior Vice President, Human Resources from April 2010 to May 2013.
Prior to joining Coldwater Creek, Mr. Hayes was engaged for seventeen years in private law practice, most recently as a partner
with Hogan & Hartson, LLP, from March 2003 to February 2009. Prior to his legal career, Mr. Hayes practiced as a certified
public accountant with KPMG LLP.
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Julie Lodge-Jarrett became our Chief People and Purpose Officer in April 2020. Prior to joining DICK’S Sporting Goods, Ms.
Lodge-Jarrett spent more than 21 years at Ford Motor Company, most recently serving as Chief Talent Officer. Ms. Lodge-
Jarrett held various human resources and organizational development roles during her tenure with Ford, including Chief
Learning Officer; Human Resources Director, Global Purchasing; Human Resources Vice President, Greater China; and Human
Resources Business Partner & Talent Director, Asia Pacific & Africa.
ITEM 1A. RISK FACTORS
Risks Related to Our Industry and Macroeconomic Conditions
Macroeconomic conditions may adversely affect consumer discretionary spending and our business, operations, liquidity,
and financial results.
Our business depends on consumer discretionary spending, which can be adversely affected by many factors outside of the
Company’s control, including general economic conditions, such as inflation; recessionary pressures; changes in consumer
disposable income; consumer confidence and perception of economic conditions, including the instability in the banking sector;
the threat or outbreak of war, terrorism or public unrest (including, without limitation, the conflict in Ukraine) which may cause
supply chain disruptions, increase fuel and transportation costs and the cost of materials, and create general economic
instability; wage and unemployment levels; consumer debt and inflationary pressures; the costs of basic necessities and other
goods; interest rates; effects of weather and natural disasters caused by climate change or otherwise; and epidemics, contagious
disease outbreaks, and other public health concerns (including but not limited to the long-term impacts of the COVID-19
pandemic).
Decreases in consumer discretionary spending may result in a decrease in comparable sales, which might cause us to utilize
pricing strategies that will have a negative impact on our gross margins, all of which could negatively affect our financial
results, particularly if consumer spending levels are depressed for a prolonged period of time. To the extent that the COVID-19
pandemic continues to adversely affect our business and financial results, it may also have the effect of heightening many of the
other risks described herein, including risks relating to the changes in consumer demand or shopping patterns.
Intense competition in the sporting goods industry and in retail could limit our growth and reduce our profitability.
The market for sporting goods retailers is highly fragmented, intensely competitive, and continually evolving. We compete with
retailers from multiple categories and in multiple channels, including large formats; traditional and specialty formats; mass
merchants; department stores; internet-based and direct-sell retailers; and increasingly from vendors that sell directly to
customers. Our competitors include companies that have greater market presence (both brick and mortar and online), name
recognition and financial, marketing, and other resources than we do. An inability to successfully respond to competitive
pressures could have a materially adverse effect on our results of operations or reputation. Further, the ability of consumers to
compare prices in real-time puts additional pressure on us to maintain competitive pricing. If we are unsuccessful in our varied
marketing and advertising strategies, especially via online and social media platforms, we could lose athletes and sales could
decline.
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 could negatively impact our business and results of
operations.
Our product costs are affected, in part, by the costs and availability of component materials. A substantial increase in the prices
of raw materials or commodities used in the products we sell, whether due to material shortages, supply chain disruptions or
otherwise could increase the costs associated with manufacturing our products and the products that we purchase from our
vendors. Significant increases in the prices of raw materials and commodities and our ability to pass these increases on to our
athletes or manage increased costs by other means may affect our sales and profitability.
We rely upon third-party transportation to deliver products from vendors and our manufacturing facilities to our distribution
centers, from our distribution centers to our stores, and directly to our athletes using our omni-channel platform. Consequently,
our results may be adversely affected by those factors impacting transportation, including the price of fuel and the availability
of aircraft, ships, trucks, and drivers. The price of fuel and demand for transportation services has fluctuated significantly in
recent years and has resulted in increased transportation costs for us and our vendors.
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Labor and employee shortages in the transportation industry could negatively affect transportation costs and our ability to
supply our stores in a timely manner. Our business also is highly dependent on the shipping and trucking industry to deliver
products to our distribution centers and our stores. Our results of operations may be adversely affected if we, or our vendors, are
unable to secure adequate transportation resources at competitive prices to fulfill our delivery schedules to our distribution
centers or our stores. Further, difficulties in moving products manufactured overseas and through the ports of North America,
whether due to port congestion, government shutdowns, labor disputes, product regulations and/or inspections or other factors,
including natural disasters, health pandemics or other global conflicts, could negatively affect our business.
A significant amount of our products are manufactured abroad, which subjects us to various international risks and costs,
including foreign trade issues, currency exchange rate fluctuations, shipment delays and supply chain disruptions, and
political instability, which could cause our sales and profitability to suffer.
Many of the products that we purchase as well as most of our vertical brand merchandise, are manufactured abroad. Foreign
imports subject us to risk relating to changes in import duties quotas, the introduction of U.S. taxes on imported goods or the
extension of U.S. income taxes on our foreign suppliers’ sales of imported goods through the adoption of destination-based
income tax jurisdiction, loss of “most favored nation” status with the U.S., freight cost increases and economic and political
uncertainties. We may also experience shipment delays caused by shipping port constraints, labor strikes, work stoppages, acts
of war, and terrorism, or other supply chain disruptions, including those caused by extreme weather, natural disasters, and
pandemics and other public health concerns, including ongoing supply chain and manufacturing issues whether caused by the
COVID-19 pandemic, the conflict in Ukraine, or otherwise.
If any of these or other factors, including trade tensions between the U.S. and foreign nations, including China and Russia, were
to cause a disruption of trade from the countries in which our vendors’ supplies or our vertical brand products’ manufacturers
are located, our inventory levels may be reduced and/or the cost of our products may increase. We may need to seek alternative
suppliers or vendors, raise prices, or make changes to our operations, any of which could have a material adverse effect on our
sales and profitability, results of operations and financial condition. Also, the prices charged by foreign manufacturers may be
affected by the fluctuation of their local currency against the U.S. dollar and the price of raw materials, which could cause the
cost of our products to increase and negatively impact our sales or profitability.
Risks Related to Our Operations and Reputation
If we are unable to predict or effectively react to changes in consumer demand or shopping patterns, we may lose athletes
and our sales may decline.
Our success depends in part on our ability to anticipate and respond in a timely manner to changing consumer demand,
preferences and trends, and shopping patterns, which are subject to continual change and evolution. We have adopted a fully
omni-channel business model, as we strive to deliver a seamless shopping experience to our athletes through both online and in-
store shopping experiences. For example, we must meet athletes’ expectations with respect to, among other things, creating
appealing and consistent online experiences while also offering localized assortments of merchandise to appeal to local
geographic and demographic tastes; offering differentiated and premium products and regionally relevant products; delivering
elevated customer service; and providing desirable in-store experiences, fast, accurate and reliable delivery and pick-up, and
convenient return options. Our athletes have expectations about how they shop in stores or through eCommerce or more
generally engage with businesses across different channels or media (through online and other digital or mobile channels or
particular forms of social media), which may vary across demographics and may evolve rapidly. If we are unable to provide an
omni-channel shopping experience across all channels that aligns with our athletes’ expectations and preferences, it could have
an adverse impact on the results of our operations.
We often make advanced commitments to purchase products, which may make it more difficult for us to adapt to rapidly-
evolving changes in consumer preferences and trends. The COVID-19 pandemic created a shift in consumer demand, resulting
in an increase in demand in certain categories due to the renewed interest and perceived importance of health and fitness,
participation in socially-distant and outdoor activities, and a shift toward athletic apparel and active lifestyle products. It is
uncertain whether or the extent to which these trends will continue now that the COVID-19 pandemic has subsided or if another
pandemic or similar public health event would have the same positive or negative impact.
Furthermore, ongoing supply chain challenges as a result of the COVID-19 pandemic, the conflict in Ukraine, and other factors
have made it more difficult to obtain certain in-demand products. Our sales could decline significantly if we misjudge the
market for our new merchandise, which may result in significant merchandise markdowns and lower margins, missed
opportunities for other products, and inventory write-downs.
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Our vertical brand offerings and new specialty concept stores expose us to potential increased costs and certain additional
risks.
We develop and offer our athletes vertical brand products that are not available from other retailers and expend considerable
resources to develop new brands. Unexpected or increased costs or delays in development of the brand, excessive demands on
management resources, legal or regulatory constraints, changes in consumer demands and shopping patterns regarding sporting
goods, or a determination that consumer demand no longer supports the brand could cause us to curtail or abandon any of our
new brands at any time which could result in asset impairments and inventory write-downs. Additional risks relating to our
vertical brand offerings include increased potential product liability and product recalls for which we do not have third-party
indemnification and contractual rights or remedies (including product safety concerns); increased reputational risks related to
the responsible domestic and international sourcing of our vertical brand products; increased costs for labor or raw materials
used to manufacture products; our ability to successfully protect our proprietary rights (e.g., defending against counterfeit or
unauthorized goods); our ability to successfully navigate and avoid claims related to the proprietary rights of third parties; our
ability to anticipate consumer trends and styles; and our ability to utilize talent and other generational advertising techniques to
reach the relevant market specific to each vertical brand.
We also may develop and introduce new store concepts and formats or expand upon existing formats, which may require
considerable resources, and there is no assurance that these initiatives will be successful. We have included a variety of other
experiential opportunities in our current store concept offerings, such as climbing walls, fields, ice rinks, and other in-person
activations. Issues that may pose potential risks for our new store concepts and formats include: increased potential liability for
bodily injury to athletes or teammates; increased liability for property damage; increased costs for implementing, installing,
building, repairing, and maintaining our experiential concepts or creating new concepts; our ability to attract and retain
teammates with specific skill sets as it relates to experiential concepts; our ability to anticipate consumer trends or engaging
activities; increased reputational risks related to community involvement, giving, and other activations at a localized level;
increased risk related to competitors attempting to create similar concepts to gain market share; and our ability to successfully
administer and comply with obligations under license agreements that we have with third-party licensors of certain brands.
Harm to our reputation could adversely impact our ability to attract and retain athletes and teammates.
Negative publicity or perceptions involving us or our brands, products, vendors, foreign manufacturers, spokespersons, or
marketing and other partners, or failure to detect, prevent, mitigate or address issues giving rise to reputational risk could
adversely impact our reputation, business, results of operations, and financial condition, and may adversely impact our ability to
attract and retain athletes and teammates. Issues that might pose a reputational risk include: an inability to provide an omni-
channel experience that meets the expectations of consumers; failure of our cyber-security measures to protect against data
breaches; product liability, recalls, and boycotts; our handling of issues relating to environmental, social, and governance
(“ESG”) matters, including our response to ESG matters and the transparency of our progress toward ESG goals and initiatives;
our social media activity; failure to comply with applicable laws and regulations (including those in other countries where we
manufacture goods); our policies related to the sale of firearms and accessories; public stances on controversial social or
political issues; product sponsorship relationships, including those with celebrity spokespersons, influencers and other
partnerships or group affiliations; our real estate strategy and selection of new store openings or relocations; concerns
surrounding labor, environmental, workplace safety and other practices that may vary from U.S. standards in any of our foreign
manufacturers, whether directly or indirectly; and any of the other risks enumerated in these risk factors. Furthermore, the
prevalence of social media and a constant, on-demand news cycle may accelerate and in the short-term increase the potential
scope of any negative publicity we or others might receive and could increase the negative impact of these issues on our
reputation, business, results of operations, and financial condition.
Our strategic plans and initiatives may initially result in a negative impact on our financial results and such plans and
initiatives may not achieve the desired results within the anticipated time frame or at all.
Our ability to successfully implement and execute our strategic plans and initiatives depends on many factors, some of which
are out of our control. Our focus on long-term strategic investments, including investments in our digital capabilities, our
eCommerce platform, improvements to the athlete experience in our stores and online, our supply chain, enhancements to our
ScoreCard loyalty program, the continued development of our vertical brands and specialty concepts (including but not limited
to store remodels, experiential concepts and relocations), and improving teammate productivity, may require significant capital
investment and management attention at the expense of other business initiatives and may take longer than anticipated to
achieve the desired return. Additionally, any new initiative is subject to certain risks, including athlete acceptance, competition,
product differentiation, and the ability to attract and retain qualified personnel to support the initiative.
13
An inability to execute our real estate strategy could affect our financial results.
Our financial performance depends on our ability to optimize our retail real estate portfolio, including opening new stores and
relocating existing stores in desirable locations, and, where appropriate, consolidating the stores serving particular markets to
maximize efficiencies; opportunistically purchasing real estate in compelling long-term or barrier-to-entry markets or assets;
renewing leases for existing stores, restructuring leases for existing stores to obtain more favorable renewal terms; refreshing
and remodeling existing stores; if necessary, closing underperforming and poorly located stores; and where appropriate,
repurposing real estate holdings to provide specialty banner opportunities or ancillary retail support to the stores in the market.
There is no assurance that we will be able to locate desirable real estate for new stores or relocations of existing stores, or that
an existing store will continue to be profitable in its current location. Additionally, our ability to negotiate favorable lease terms
or purchase terms on a new store location or a relocation of an existing store, or in connection with an expiring lease, remodel,
consolidation, or closing depends on conditions in the real estate market, competition for desirable properties, our relationships
with current and prospective landlords and shopping center operators, construction costs, the availability of labor and materials,
and other factors that are not within our control. We may incur costs that are excessive and cause operating margins to be below
acceptable levels if we are unable to negotiate appropriate terms.
If an existing store is not profitable, we might be required to record an impairment charge and we may not be able to terminate
the lease or sell the real estate associated with the underperforming store. Further, closing stores generally result in certain
short-term economic consequences, such as, ongoing rent payment obligations or other expenses for the balance of the lease
term or ownership period, termination charges in connection with a lease or, if the property is owned, costs, expenses and losses
in connection with a sale. We may remain liable for certain post-assignment or sublease obligations if the assignee, sublessee or
tenant, as applicable, does not perform.
Furthermore, the success of our stores depends on several factors including the sustained success of the shopping center where
the store is located, consumer demographics, and consumer shopping habits and patterns. Changes in consumer shopping habits
and patterns, reduced customer traffic in the shopping centers where our stores are located, financial difficulties of our
landlords, or the shopping center operators, anchor tenants or a significant number of other retailers, and shopping center
vacancies or closures, could impact the profitability of our stores and increase the likelihood that our landlords or the shopping
centers operators fail to fulfill their obligations and conditions under our lease agreements or governing documents. We may
need to respond to declines in customer traffic or conversion rates by increasing markdowns or promotions to attract athletes,
which could adversely impact our financial results.
Our business relies on our distribution and fulfillment network and our customer support center. An inability to optimize
this network or a disruption to the network, including delays or failures by independent third-party transportation providers,
could cause us to lose merchandise, be unable to effectively deliver merchandise to our stores and athletes, and could
adversely affect our financial condition and results of operations.
The ability to optimize our distribution and fulfillment network, which includes our owned and leased distribution centers and
eCommerce fulfillment center, and our stores that serve as forward distribution points, and avoid disruptions, depends on a
variety of factors, some of which are beyond our control, including severe weather conditions, natural disasters, pandemics or
other catastrophic events, problems with our information technology systems, labor or employee disagreements, supply chain
disruptions or other shipping problems, and general economic and real estate conditions.
We may not be able to maintain our existing distribution and fulfillment network if the cost of the facilities increase or the
location of a facility is no longer desirable. In those cases, we may not be able to locate suitable alternative sites or modify or
enter into new leases on acceptable terms. Furthermore, we may need to locate new sites for additional eCommerce fulfillment
centers to satisfy omni-channel demand. If we cannot locate suitable locations for these fulfillment centers on acceptable terms,
we will need to increase reliance on our store network, third-party logistic fulfillment centers, our distribution centers, and
vendors to help meet our fulfillment needs. An inability to optimize our distribution and fulfillment network, including the
expiration of a lease or an unexpected lease termination at one of our facilities (without timely replacement of the applicable
facility) or serious disruptions (including natural disasters or closures of distribution and fulfillment centers) at any of these
facilities might impair our ability to adequately stock our stores, process returns of products to vendors and fulfill eCommerce
orders at the speed expected by athletes, increase costs associated with shipping and delivery, damage a material portion of our
inventory, and otherwise negatively affect our operations, sales, profitability, and reputation.
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In addition, we rely on independent third-party transportation providers for substantially all of our merchandise shipments,
including shipments to our stores and directly to athletes through our eCommerce platform. If we change shipping companies,
we could face logistical difficulties that could adversely impact deliveries and we would incur costs and expend resources in
connection with such change. Moreover, we may not be able to obtain terms as favorable as those received from the
independent third-party transportation providers we currently use, which could have a material adverse impact on our business.
Unauthorized disclosure of sensitive or confidential athlete, teammate, vendor or Company information could result in
substantial costs and reputational damage, harm our business and standing with our athletes and could subject us to
litigation and enforcement actions.
The protection of our data, including athlete and teammate data, is critical. We collect, receive, store, manage, transmit and
delete confidential athlete data, including payment card and personally identifiable information, in the normal course of
customer transactions, as well as other confidential and sensitive information, such as personal information about our
teammates and our vendors, and confidential Company information. We also work with third-party vendors and service
providers that provide technology, systems and services that we use in connection with the collection, storage and transmission
of this information. We have implemented and regularly review and update our systems, processes, and procedures to protect
against unauthorized access to or use of data and to prevent data loss. Although we have taken measures to protect athlete and
others’ confidential information, the intentional or negligent actions of third parties, business associates or teammates may
undermine our existing security measures and allow unauthorized parties to obtain access to our data systems and
misappropriate confidential data. While we have no knowledge of any material data security breaches to date, any compromise
of our data security could result in a violation of applicable privacy and other laws or standards, significant legal and financial
exposure beyond the scope or limits of our insurance coverage, interruption of our operations, increased operating costs
associated with remediation, equipment acquisitions or disposal, added personnel, and a loss of confidence in our security
measures, which could harm our business, reputation or investor confidence.
Further, the data privacy and cyber-security regulatory environment is constantly changing, with new and increasingly rigorous
and complex requirements. Maintaining our compliance with those requirements, including state consumer privacy laws, may
require significant effort and cost, require changes to our business practices, and limit our ability to obtain data used to provide
a personalized customer experience. In addition, failure to comply with applicable requirements could subject us to fines,
sanctions, governmental investigations, lawsuits or reputational damage.
Problems with our information systems could disrupt our operations and negatively impact our financial results and
materially adversely affect our business operations.
We utilize several third-party information systems for core system needs of our business, including our use of an independent
service provider for electronic payment processing. If any of these systems fail to function properly, it could disrupt our
operations, including our ability to track, record and analyze the merchandise that we sell, process shipments of goods, process
financial information or credit card transactions, deliver products or engage in similar normal business activities. If any of these
independent service providers become unwilling or unable to provide these services to us or if the cost of using these providers
increases, our business could be harmed.
Our information systems, including our back-up systems, are subject to damage or interruption from power outages; computer
and telecommunications failures; malicious computer programs; denial-of-service attacks; security breaches (through cyber-
attacks from cyber-attackers or sophisticated organizations); catastrophic events; and usage errors by our teammates.
Additionally, we have adopted a hybrid remote work environment which relies on the efficiency and functionality of our
information systems. If our information systems and our back-up systems are damaged, breached or cease to function properly,
we may have to make a significant investment to repair or replace them, and we may suffer loss of critical data and
interruptions or delays in our business operations. Any material disruption, malfunction, or other similar problems in or with
our core information systems could negatively impact our financial results and materially adversely affect our business
operations.
We may be unable to attract, train, engage and retain key teammates.
Our long-term success and ability to implement our strategic and business planning processes depends on our ability to attract,
retain, train and develop key and qualified teammates in all areas of the organization, including store managers and sales
associates, teammates who staff our distribution centers, and professionals to implement our technology and other strategic
initiatives. Our ability to meet our labor needs while controlling labor costs is subject to numerous external factors, including
market pressures with respect to prevailing wage rates, equity compensation, unemployment levels, and health and other
insurance costs; the impact of legislation or regulations governing labor and employee relations, immigration, federal and state
minimum wage requirements, and benefit costs; changing demographics; and our reputation within the labor market. If we are
15
unable to attract and retain a workforce that meets our needs, our operations, service levels, support functions, and
competitiveness could suffer and our results could be adversely affected.
The loss of one or more of our key executives or the inability to successfully attract and retain executive officers or
implement effective succession planning strategies could have a material adverse effect on our business.
Our long-term success and ability to implement our strategic and business planning processes depends in large part on our
ability to continue to attract and retain executive management. All teammates, including members of our executive management
and key personnel, are at-will employees, and we generally do not maintain key-person life insurance policies on our
teammates. The loss of any one our executive management, including our President & Chief Executive Officer, Lauren Hobart,
or other key personnel could seriously harm our business. Additionally, effective succession planning for executive
management and key personnel is vital to our long-term continued success. Failure to ensure effective transfer of knowledge,
maintenance of our culture, setting of strategic direction, and smooth transitions involving executive management and key
personnel could hinder our long-term strategies and success. Furthermore, our success depends on continued service from
Edward W. Stack, our Executive Chairman, who began operating the Company in 1984 and continues to oversee our
merchandising group and key strategic growth initiatives. Mr. Stack possesses detailed and in-depth knowledge of the issues,
opportunities and challenges that we and the industry face. If Mr. Stack no longer serves a role in our business, our results could
be materially adversely affected.
The seasonality of our operations, along with the current geographic concentrations of our stores, exposes us to certain
risks (including but not limited to extreme weather conditions and/or natural disasters and other catastrophic events).
Our business is subject to seasonal influences and certain holidays and sports seasons during the year. Many of our stores are in
geographic areas that experience seasonally cold weather, and we sell a significant amount of cold weather sporting goods and
apparel. Historically, our highest sales and operating income results have occurred during our second and fourth fiscal quarters,
which is partly due to golf and team sports sales during the second quarter and partly due to the winter holiday season and our
strong sales of cold weather sporting goods and apparel in the fourth quarter. Results for any quarter are not necessarily
indicative of the results that may be achieved for the fiscal year. Poor performance during a quarter because of slow holiday
seasons or unseasonable weather conditions, including unusually warm weather in the winter months or abnormally wet or cold
weather in the spring or summer months, whether due to climate change or otherwise, could have a material adverse effect on
our business, financial condition, and operating results for the entire fiscal year.
Furthermore, extreme weather conditions and natural disasters caused by climate change or otherwise and other catastrophic
events in the areas in which our stores and/or distribution centers are located could negatively impact consumer shopping
patterns, consumer confidence and disposable income, or otherwise could have a negative effect on our financial performance.
Natural disasters such as hurricanes, tornadoes and earthquakes, or a combination of these or other factors, could damage or
destroy our facilities or make it difficult for customers to travel to our stores. Extreme weather conditions and/or natural
disasters, or other catastrophic events in areas where we or our vendors have operations, including our stores and our
distribution and eCommerce fulfillment centers, could result in disruption or delay of production and delivery of merchandise
and products in our supply chain and cause staffing shortages in our stores, negatively affecting our business and results of
operations.
We cannot provide any guaranty of future dividend payments or that we will continue to repurchase our common stock
pursuant to our stock repurchase program.
Any determination to pay cash dividends on our common stock in the future will be based upon our financial condition, results
of operations, business requirements, and the continuing determination from our Board of Directors that the declaration of
dividends is in the best interests of our stockholders and is in compliance with all laws and agreements applicable to the
dividend. Furthermore, although our Board of Directors has authorized a share repurchase program, we are not obligated to
make any purchases under the program, and the Board may discontinue the program at any time.
Risks Related to Our Class B Common Stock and Other Anti-Takeover Mechanisms
We are controlled by holders of our Class B common stock, whose interests may differ from other stockholders.
Holders of our Class B common stock, who consist of our Executive Chairman, Mr. Edward W. Stack, his relatives and various
trusts established for the benefit of their families, control a majority of the combined voting power of our common stock and
Class B common stock and would control the outcome of a vote on any corporate transaction or other matter submitted to our
stockholders for approval. The interests of the holders of Class B common stock may differ from the interests of our other
stockholders and they may take actions with which our other stockholders disagree.
16
The issuance of Class B common stock and other anti-takeover mechanisms could prevent or delay a change in control of
our Company, even if such change in control would be beneficial to our stockholders.
Provisions of our Amended and Restated Certificate of Incorporation, as amended, and our Amended and Restated Bylaws as
well as provisions of Delaware law could discourage, delay, or prevent a merger, acquisition or other change in control of our
Company, even if such change in control would be beneficial to our stockholders. These provisions include: authorizing the
issuance of Class B common stock; authorizing the issuance of “blank check” preferred stock that could be issued by our Board
of Directors to increase the number of outstanding shares and thwart a takeover attempt; prohibiting the use of cumulative
voting for the election of directors; prohibiting stockholder action by partial written consent and requiring all stockholder
actions to be taken at a meeting of our stockholders or by unanimous written consent if our Class B common stock is no longer
outstanding; and establishing advance notice requirements for nominations for election to the Board of Directors or for
proposing matters to be acted upon by stockholders at stockholder meetings. In addition, the Delaware General Corporation
Law, to which we are subject, prohibits us, except under specified circumstances, from engaging in any mergers, significant
sales of stock or assets or business combinations with any stockholder or group of stockholders who owns 15% or more of our
common stock.
Risks Related to Third Parties and Legal and Regulatory Requirements
We depend on our suppliers, distributors and manufacturers to provide us with sufficient quantities of quality products in a
timely fashion.
In fiscal 2022, we purchased merchandise from approximately 1,500 vendors. Purchases from Nike represented approximately
23% of our total merchandise purchases. Although in fiscal 2022 purchases from no other vendor represented 10% or more of
our total purchases, our dependence on suppliers involves risk. We might be unable to obtain merchandise that consumers
demand in a timely manner if there are disruptions in our relationships with key suppliers, which could cause our revenue to
materially decline. We generally do not have long-term written contracts with our suppliers that would require them to continue
supplying us with merchandise. Key vendors may fail to deliver on their commitments or fail to supply us with sufficient
products that comply with our safety and quality standards, whether as a result of supply chain disruptions or other causes, or
fail to continue to develop new products that create consumer demand. Furthermore, vendors increasingly sell their products
directly to customers or through broadened or alternative distribution channels, such as department stores, family footwear
stores, or eCommerce companies. Many of our suppliers also provide us with incentives, such as return privileges, volume
purchasing allowances and cooperative advertising, which are not guaranteed. A decline or discontinuation of these incentives
could reduce or eliminate our profit margins.
We are subject to costs and risks associated with laws and regulations affecting our business.
We are subject to a wide array of laws and regulations that expose us to compliance and litigation risks that could negatively
affect our operations and financial results. Some of the federal, state or local laws and regulations that affect us include those
relating to consumer products, product liability and consumer protection; eCommerce, data protection and privacy;
advertisement and marketing; labor and employment; taxes, including changes to tax rates and new taxes, tariffs, and
surcharges; firearms, ammunition, knives, food items or other regulated products; accounting, corporate governance and
securities; custom or import; intellectual property; and environmental and/or climate change. Establishing the necessary internal
infrastructure to allow for the monitoring and other compliance requirements required by these new laws and regulations and
enforcement efforts requires expenditure of considerable Company resources.
To the extent that another pandemic or similar public health event occurs, we could be subject to another period of store
closures or other potential governmental regulations, whether at the local, state, or federal level(s) (including requiring a
reduction in work force), which would likely have a significant adverse effect on our financial condition and results of
operations.
Our sales and operating results could be adversely affected by product safety concerns.
If the products that we offer, whether via national brands or our vertical brands, do not meet applicable safety standards or our
athletes’ expectations regarding safety, we could experience decreased sales, increased costs, and/or be exposed to legal and
reputational risk. Our vendors must comply with applicable product safety laws, and we are dependent on them to ensure that
the products we buy comply with all safety standards. Negative customer perceptions regarding the safety and sourcing of the
products we sell, and events that give rise to actual, potential, or perceived product safety concerns could expose us to
government enforcement action and/or private litigation. Furthermore, reputational damage caused by real or perceived product
safety concerns could have a negative impact on our sales and operating results.
17
We may be subject to various types of litigation and other claims, and our insurance may not be sufficient to cover damages
related to those claims.
From time-to-time the Company or its subsidiaries may be involved in lawsuits or other claims arising in the ordinary course of
business, including those related to federal or state wage and hour laws, product liability, consumer protection, advertising,
employment, intellectual property, tort, privacy and data protection, disputes with landlords and vendors due to the disruptions
caused by the COVID-19 pandemic, company policies, and other matters. We may incur losses relating to claims filed against
us, including costs associated with defending against such claims, and there is risk that any such claims or liabilities will exceed
our insurance coverage, or affect our ability to retain adequate liability insurance in the future. Even if a claim is unsuccessful
or is not fully pursued, the negative publicity surrounding any such assertions could adversely affect our reputation. Due to the
inherent uncertainties of litigation and other claims, we cannot accurately predict the ultimate outcome of any such matters.
We sell firearms and ammunition in some of our stores. These products are associated with an increased risk of injury and
related lawsuits with respect to our compliance with Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) and state
laws and regulations. Any improper or illegal use by our athletes of ammunition or firearms sold by us could have a negative
impact on our reputation and business. We may incur losses due to lawsuits, including potential class actions, relating to our
performance of background checks on firearms purchases and compliance with other sales laws and regulations as mandated by
state and federal law and related to our policies on the sale of firearms and ammunition, or due to lawsuits relating to the
improper use of firearms or ammunition sold by us, including lawsuits by municipalities or other organizations attempting to
recover costs from manufacturers and retailers of firearms and ammunition.
Our inability or failure to protect our intellectual property rights or any third parties claiming that we have infringed on
their intellectual property rights could negatively impact our brand or have a negative impact on our operating results.
Our trademarks, service marks, copyrights, patents, trade secrets, domain names and other intellectual property, including
exclusive licensing rights, are valuable assets that are critical to our success. Effective trademark and other intellectual property
protection may not be available in every country in which our products are manufactured or may be made available. The
unauthorized reproduction or other misappropriation of our intellectual property could diminish the value of our brands or
goodwill and cause a decline in our revenue. In addition, any infringement or other intellectual property claim made against us
could be time-consuming to address, result in costly litigation, cause product delays, require us to enter into royalty or licensing
agreements or result in our loss of ownership or use of the intellectual property.
Changes to tax laws and regulations could adversely affect our financial results or condition.
Our effective income tax rates could be unfavorably impacted by several factors, including changes in the valuation of deferred
tax assets and liabilities; other changes in applicable tax laws, regulations, treaties, interpretations, and other guidance,
including but not limited to the Inflation Reduction Act; changes in transfer pricing rules; and the outcome of income tax audits
in various jurisdictions. Current economic and political considerations make tax rules in the United States and other applicable
jurisdictions subject to significant change. Changes in applicable tax laws and regulations, or their interpretation and
application, including the possibility of retroactive effect, could affect our income tax expense and profitability.
Poor performance of professional sports teams within our core regions of operation, as well as league-wide lockouts, strikes
or cancellations, retirement of or serious injury to key athletes or scandals involving such athletes could adversely affect our
financial results.
We sell a significant amount of professional sports team merchandise, the success of which may be subject to fluctuations based
on the success or failure of such teams or their key players. Poor performance by the professional sports teams within our core
regions of operations; league-wide lockouts or strikes; and disruptions to, cancellations of, or negative publicity regarding
sports leagues and major sporting events could cause our financial results to fluctuate year-over-year. In addition, to the extent
we use individual athletes to market our products and advertise our stores or we sell merchandise branded by one or more
athletes, the retirement or injury of such athletes or scandals in which they might be implicated could negatively impact our
financial results.
18
Risks Related to Our Indebtedness and Strategic Transactions
We may pursue strategic alliances, acquisitions or investments and the failure of an alliance, acquisition or investment to
produce the anticipated results or the inability to successfully integrate the acquired companies could have an adverse
impact on our business.
From time-to-time, we may enter into strategic alliances or acquire or invest in complementary companies or businesses. The
success of strategic alliances, acquisitions, and investments is based on our ability to make accurate assumptions regarding the
valuation, operations, growth potential, integration and other factors relating to such businesses. Strategic alliances,
acquisitions, and investments may result in the diversion of capital and our management's attention from other business issues
and opportunities. We also may not be able to successfully integrate operations that we acquire, including their personnel,
financial systems, supply chain and other operations, which could adversely affect our business. Furthermore, acquisitions may
result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses or write-
offs of goodwill or other intangibles, any of which could harm our financial condition. There can be no assurance that our
strategic alliances, acquisitions, or investments will produce the anticipated results within the expected time frame or at all.
Our ability to operate and expand our business and to respond to changing business and economic conditions is dependent
upon the availability of adequate capital. In addition to certain restrictions imposed by the terms of existing debt
instruments, weakness in the capital markets could also negatively impact our access to capital.
The operation and growth of our business and our ability to respond to changing business and economic conditions depend on
the availability of adequate capital, which in turn depends on cash flow generated by our business and, if necessary, the
availability of equity or debt capital. Our revolving credit facility (the “Revolving Credit Facility”) contains provisions that
limit certain of our subsidiaries’ ability to incur additional unsecured indebtedness, and our Revolving Credit Facility and the
indenture that governs our 3.15% senior notes due 2032 (the “2032 Notes”) and our 4.10% senior notes due 2052 (the “2052
Notes” and together with the 2032 Notes, the “Senior Notes”) contain provisions that limit the Company’s and certain of our
subsidiaries’ ability to incur secured indebtedness and our ability to sell all or substantially all of our assets, in each case subject
to a number of exceptions and qualifications, the proceeds of which might otherwise be used to finance our operations. In the
event of our insolvency, liquidation, dissolution or reorganization, the lenders under our Revolving Credit Facility and the
holders of our Senior Notes would be entitled to payment in full from our assets before distributions, if any, were made to our
stockholders.
If we are unable to generate sufficient cash flows from operations in the future, and if availability under our Revolving Credit
Facility is not sufficient to meet our capital needs, we may have to obtain additional financing. Any future constriction of the
credit and public capital markets, including debt markets, or deterioration of our financial condition due to internal or external
factors, could restrict or limit our ability to access capital and could increase the cost of financing sources. We may not be able
to obtain such refinancing or additional financing on favorable terms or at all. Our liquidity or access to capital could also be
adversely affected by unforeseen changes in the financial markets and global economy.
Our indebtedness and liabilities could limit the cash flow available for our operations and we may not be able to generate
sufficient cash to service all of our indebtedness. We may be forced to take certain actions to satisfy our obligations under
our indebtedness or we may experience a financial failure.
Our ability to make scheduled payments on or to refinance our debt obligations, including our $575 million of 3.25%
convertible senior notes due 2025 (the “Convertible Senior Notes”), the Notes and our Revolving Credit Facility, will depend
on our financial and operating performance. If our cash flows and capital resources are insufficient to fund our debt service
obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or
restructure or refinance our indebtedness, including the Convertible Senior Notes, the Notes or the Revolving Credit Facility.
We may not be able to take any of these actions, these actions may not be successful or may not permit us to meet our
scheduled debt service obligations and these actions may not be permitted under the terms of our future debt agreements. In the
absence of sufficient operating results and resources, we could face substantial liquidity problems and might be required to
dispose of material assets or operations to meet our debt service and other obligations. We may not be able to consummate
those dispositions or obtain sufficient proceeds from those dispositions to meet our debt service and other obligations then due.
19
Our current and future indebtedness could have negative consequences for our business, results of operations and financial
condition by, among other things:
•
•
•
•
•
•
increasing our vulnerability to adverse economic and industry conditions;
limiting our ability to obtain additional financing;
requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which
will reduce the amount of cash available for other purposes;
limiting our flexibility to plan for, or react to, changes in our business;
diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of
the Convertible Senior Notes; and
placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access
to capital.
In addition, our Revolving Credit Facility contains certain restrictive covenants, including covenants that limit certain of our
subsidiaries’ ability to incur additional unsecured indebtedness, and our Revolving Credit Facility and the indenture that
governs our Notes contain provisions that limit the Company’s and certain of our subsidiaries’ ability to incur secured
indebtedness and our ability to sell all or substantially all of our assets, in each case subject to a number of exceptions and
qualifications, among other things. Any future indebtedness that we may incur may contain, restrictive covenants that limit our
ability to operate our business, raise capital or make payments under our other indebtedness. If we fail to comply with these
covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which
could, in turn, result in our other indebtedness becoming immediately payable in full.
Provisions in the indenture governing the Convertible Senior Notes and the indenture governing the 2032 Notes and the
2052 Notes could delay or prevent an otherwise beneficial takeover of us.
Certain provisions in the indenture governing the Convertible Senior Notes and the indenture governing the Notes could make a
third-party attempt to acquire us more difficult or expensive. For example, under the indenture governing the Convertible
Senior Notes, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase
their Convertible Senior Notes for cash, and if a takeover constitutes a make-whole fundamental change, then we may be
required to temporarily increase the conversion rate. Under the indenture governing the Notes, if a takeover results in a change
of control triggering event, then noteholders will have the right to require us to repurchase their Notes for cash equal to 101% of
the aggregate principal amount of such notes. In either case, and in other cases, our obligations under the indenture governing
the Convertible Senior Notes and the indenture governing the Notes could increase the cost of acquiring us or otherwise
discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or
holders of our common stock may view as favorable.
The convertible note hedge and warrant transactions may affect the value of our common stock.
In connection with the issuance of the Convertible Senior Notes, we entered into privately negotiated convertible note hedge
transactions with the hedge counterparties that cover, subject to customary anti-dilution adjustments, the number of shares of
common stock that initially underlie the Convertible Senior Notes. Concurrently with the entry into the convertible note hedge
transactions, we entered into separate, privately negotiated warrant transactions with the hedge counterparties collectively
relating to the same number of shares of our common stock, subject to customary anti-dilution adjustments, and for which we
will receive premiums to partially offset the cost of entering into the hedge transactions.
The convertible note hedge transactions are intended to reduce the potential dilution with respect to our common stock or offset
any potential cash payments we are required to make in excess of the principal amount of converted Convertible Senior Notes,
as the case may be, upon any conversion of the Convertible Senior Notes. The warrant transactions could have a dilutive effect
with respect to our common stock to the extent that the price per share of our common stock exceeds the strike price of the
warrants evidenced by the warrant transactions. In connection with establishing and maintaining their initial hedge positions
with respect to the convertible note hedge transactions and the warrant transactions, we understand that the hedge counterparties
or their respective affiliates may modify their hedge positions with respect to the convertible note hedge transactions and the
warrant transactions from time-to-time by purchasing or selling shares of our common stock or the Convertible Senior Notes in
privately negotiated transactions or open-market transactions or by entering into or unwinding various over-the-counter
derivative transactions with respect to our common stock.
The effect, if any, of these activities on the trading price of our common stock will depend on a variety of factors, including
market conditions, and is uncertain at this time. Any of these activities could, however, adversely affect the trading price of our
common stock.
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We are subject to counterparty risk with respect to the convertible note hedge transactions.
The hedge counterparties are financial institutions, and we will be subject to the risk that they might default under certain of the
convertible note hedge transactions. Our exposure to the credit risk of the hedge counterparties will not be secured by any
collateral. Global economic conditions have from time-to-time resulted in the actual or perceived failure or financial difficulties
of many financial institutions. If a hedge counterparty becomes subject to insolvency proceedings, we will become an
unsecured creditor in those proceedings with a claim equal to our exposure at that time under our transactions with that hedge
counterparty. Our exposure will depend on many factors, but, generally, the increase in our exposure will be correlated to the
increase in the market price and in the volatility of our common stock. In addition, upon a default by a hedge counterparty, we
may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock. We can
provide no assurances as to the financial stability or viability of any hedge counterparty.
Conversion of the Convertible Senior Notes or exercise of the warrants evidenced by the warrant transactions may dilute the
ownership interest of existing stockholders, including noteholders who have previously converted their notes.
At our election, we may settle Convertible Senior Notes tendered for conversion entirely or partly in shares of our common
stock. Furthermore, the warrants evidenced by the warrant transactions are expected to be settled on a net-share basis. As a
result, the conversion of some or all of the Convertible Senior Notes or the exercise of some or all of such warrants may dilute
the ownership interests of existing stockholders. Any sales in the public market of the common stock issuable upon such
conversion of the Convertible Senior Notes or such exercise of the warrants could adversely affect prevailing market prices of
our common stock. In addition, the existence of the Convertible Senior Notes may encourage short selling by market
participants because the conversion of the Convertible Senior Notes could depress the price of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We lease substantially all of our stores, which generally have initial lease terms of 10 to 15 years and contain multiple five-year
renewal options and rent escalation provisions. We believe that our leases, when entered into, are at market rate rents. We
generally select a new store site 12 to 24 months before its opening. Our stores are primarily located in shopping centers in
regional shopping areas, as well as in freestanding locations and malls.
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As of January 28, 2023, we operated 853 stores in 47 states. The following table sets forth the number of stores by state:
State
Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Total
DICK’S Sporting Goods (1)
Specialty Concept Stores (2)
Total (3)
13
9
4
58
16
11
3
1
48
23
6
32
19
7
10
12
8
4
17
18
22
10
7
13
4
4
7
19
4
43
32
1
38
7
10
39
2
11
1
17
48
5
2
27
16
6
13
1
4
3
—
7
2
3
1
—
8
3
1
5
2
2
2
1
—
—
2
4
4
4
—
2
1
2
—
3
—
3
8
—
11
2
2
9
1
2
—
3
9
1
—
5
—
—
3
—
17
12
4
65
18
14
4
1
56
26
7
37
21
9
12
13
8
4
19
22
26
14
7
15
5
6
7
22
4
46
40
1
49
9
12
48
3
13
1
20
57
6
2
32
16
6
16
1
728
125
853
(1)
(2)
(3)
As of January 28, 2023, includes three DICK'S House of Sport stores.
Includes our Golf Galaxy, Field & Stream, Public Lands and Going Going Gone! specialty concept stores. As of January 28, 2023, we operated 98
Golf Galaxy stores in 35 states, seven Public Lands stores in seven states, 15 Going Going Gone! stores in 13 states, and five Field & Stream stores
in two states. 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 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 counts, as applicable. As of January 28, 2023, we operated 16 combo stores.
Excludes 43 and 14 temporary Warehouse Sale store locations as of January 28, 2023 and January 29, 2022, respectively.
22
The following is a list of significant locations including the approximate square footage and whether the location is leased or
owned:
Facility Location
Conklin, New York
Atlanta, Georgia
Plainfield, Indiana
Goodyear, Arizona
Smithton, Pennsylvania
Type
Distribution and Fulfillment
Distribution
Distribution
Distribution
Distribution
Coraopolis, Pennsylvania
Customer Support Center (CSC)
Square Footage
Ownership
917,000
914,000
725,000
624,000
601,000
670,000
Owned
Leased
Leased
Owned
Leased
Owned
The land on which our CSC is built is subject to an underlying ground lease with Allegheny County Airport Authority, which
expires in 2038.
ITEM 3. LEGAL PROCEEDINGS
We and our subsidiaries are involved in various proceedings that are incidental to the normal course of our businesses. As of the
date of this Annual Report on Form 10-K, we do not expect that any of such proceedings will have a material adverse effect on
our financial position or results of operations.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
23
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Market Information and Dividend Policy
Shares of DICK’S Sporting Goods, Inc. common stock are listed and traded on the New York Stock Exchange (“NYSE”) under
the symbol “DKS”. We also have shares of Class B common stock outstanding, which are not listed or traded on any stock
exchange or other market. Shares of our Class B common stock can be converted on a one-for-one basis to shares of our
common stock at any time at the holder’s option and are automatically converted upon the occurrence of certain events.
The declaration of dividends and the establishment of the per share amount, record dates and payment dates for any such future
dividends are subject to the final determination of our Board of Directors, and are dependent upon multiple factors, including
future earnings, cash flows, financial requirements and other considerations.
As of March 17, 2023, there were 233 and 15 registered holders of our common stock and Class B common stock, respectively.
Comparison of 5 Year Cumulative Total Return
The following graph compares the performance of our common stock with that of the Standard & Poor’s 500 Composite Stock
Price Index (the “S&P 500”) and the S&P Specialty Retail Index for the periods indicated below. The graph assumes that $100
was invested on February 2, 2018 in our common stock, the S&P 500 and the S&P Specialty Retail Index and that all dividends
were reinvested.
DKS
S&P 500
S&P Specialty Retail Index
500.00
400.00
300.00
200.00
100.00
0.00
8
1
2
/
/
2
8
1
4
/
/
5
8
1
3
/
/
8
8
1
2
/
/
1
1
9
1
1
/
/
2
9
1
3
/
/
5
9
1
2
/
/
8
9
1
/
/
1
1
1
Unregistered Sales of Equity Securities
/
0
2
1
3
1
/
0
2
/
1
5
/
0
2
/
1
3
/
7
/
0
2
0
3
0
1
/
1
2
/
9
2
/
1
1
2
/
0
3
/
4
1
2
/
0
3
/
7
/
1
2
9
2
0
1
/
2
2
/
8
2
/
1
2
2
/
9
2
/
4
2
2
/
9
2
/
7
/
2
2
8
2
0
1
/
3
2
/
7
2
/
1
As previously disclosed, on December 7, 2022, the Company entered into exchange agreements (the “Exchange Agreements”)
with certain holders of the Company’s Convertible Senior Notes due 2025 pursuant to which such holders exchanged, in the
aggregate, $95.3 million aggregate principal amount of Convertible Senior Notes for cash, plus a number of shares of the
Company’s common stock based upon the volume-weighted average price per share of the Company’s common stock during an
averaging period that commenced on December 8, 2022. As a result of that valuation, the Company delivered to the exchanging
holders an aggregate amount of 2,183,202 shares of its common stock plus an aggregate of $95.3 million in cash in exchange
for an aggregate principal amount of $95.3 million of Convertible Senior Notes. These exchange transactions closed on
December 16, 2022 and December 19, 2022. The shares of common stock were delivered in reliance on an exemption from
registration provided by Section 4(a)(2) of the Securities Act of 1933.
24
A portion of the shares of common stock delivered pursuant to the exchanges described above were obtained by the Company
from financial institutions (each, a “Hedge Counterparty”) as part of the early unwinds of the convertible note hedge
transactions and related warrant transactions (collectively, the “Hedge Transactions”) entered into concurrently with the
Convertible Senior Notes issuance. The early unwind agreements between the Company and each Hedge Counterparty
(collectively, the “Hedge Early Termination Agreements”) related to a portion of the Hedge Transactions corresponding to the
amount of Convertible Senior Notes exchanged by holders thereof pursuant to the Exchange Agreements. The Company
received 221,215 shares as a result of the unwinds of the Hedge Transactions.
The foregoing description is qualified by reference to the full text of the forms of the Exchange Agreements and the Hedge
Early Termination Agreements, copies of which were filed with the Company’s Current Report on Form 8-K on December 8,
2022 as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 each of which is incorporated herein by reference.
Issuer Purchases of Equity Securities
The following table sets forth information with respect to common stock repurchases made during the three months ended
January 28, 2023:
Period
Total
Number of
Shares
Purchased (a)
Average
Price Paid
Per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (b)
Dollar Value of
Shares That May
Yet be Purchased
Under the Plans or
Programs (b)
October 30, 2022 to November 26, 2022
November 27, 2022 to December 31, 2022
January 1, 2023 to January 28, 2023
Total
397,239 $
217,307 $
1,357 $
615,903 $
102.34
117.20
120.57
107.62
396,547 $
1,453,118,659
213,289 $
1,428,118,972
— $
1,428,118,972
609,836
(a)
Includes shares withheld from employees to satisfy minimum tax withholding obligations associated with the vesting
of restricted stock during the period.
(b) Shares repurchased under our five-year $2.0 billion share repurchase program, which was authorized by the Board of
Directors on December 16, 2021.
The information set forth under Part III, Item 12. “Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters” is incorporated herein.
ITEM 6. [RESERVED]
25
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related
notes appearing elsewhere in this Annual Report on Form 10-K. This Annual Report on Form 10-K contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. Refer to “Forward-Looking Statements”
and Part I, Item 1A. “Risk Factors”.
Business Overview
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 both 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 app for scheduling, communications, live scorekeeping and video streaming. When used in this Annual Report on
Form 10-K, unless the context otherwise requires or specifies, any reference to “year” is to our fiscal year, which ends on the
Saturday closest to the end of January each year.
Since 2017, we have transformed our business to drive sustainable growth in sales and profitability. During this time, we
meaningfully improved our merchandise assortment through strong relationships with our key brand partners, which provided
access to highly differentiated product and our vertical brands. We also enhanced our store selling culture and service model
and incorporated additional experiential elements and technology into our stores to engage our athletes. Finally, we invested in
technology and data science to improve our pricing strategy, digital marketing and personalization capabilities. Consumers have
also made lasting lifestyle changes in recent years, increasing their focus on health and fitness, sports and outdoor activities
which has increased demand for our products. As a result of our core strategies, foundational improvements and these strong
secular consumer trends, net sales increased 41.3% in fiscal 2022 compared to fiscal 2019, and reflects growth in our key
priority categories including footwear, athletic apparel, team sports and golf.
Our profitability is primarily influenced by growth in comparable store sales, the strength of our merchandise margins and
ability to manage operating expenses. In addition to the structurally higher sales compared to pre-COVID levels, our
merchandise margins increased over 300 basis points as a percentage of net sales in fiscal 2022 as compared to fiscal 2019, as
we’ve maintained the majority of the merchandise expansion that we drove over the prior two years with our differentiated
product assortment, combined with our disciplined pricing strategy and favorable sales mix. We’ve also experienced
meaningful leverage on fixed occupancy costs and selling, general and administrative costs, due to the significant sales
increase. With our structurally higher sales, expanded merchandise margins, and operating expense leverage, our pre-tax
income as a percentage of net sales grew from 4.7% in fiscal 2019 to 11.2% in fiscal 2022 and our earnings per diluted share
grew from $3.34 in fiscal 2019 to $10.78 in fiscal 2022.
Field & Stream Exit
During the fourth quarter of 2022, we decided to exit the Field & Stream brand (the “Field & Stream Exit”). We plan to convert
the existing 17 Field & Stream stores, the majority of which are part of a DICK’S and Field & Stream combo store, to DICK’S
House of Sport stores, expanded DICK’S Sporting Goods stores, or other specialty concept stores. We closed twelve of these
stores for conversion during the fourth quarter of 2022 and incurred pre-tax charges totaling $30.1 million, which included
$28.5 million of non-cash impairment of store assets, $0.8 million of severance and a $0.7 million inventory write-down.
Additionally, we sold the Field & Stream trademark in fiscal 2023 for proceeds near its carrying value and plan to convert the
remaining Field & Stream stores by fiscal 2024.
Macroeconomic Outlook
The macroeconomic environment in which we operate remains uncertain as a result of numerous factors, including inflationary
pressures and the potential impact of rising interest rates. In addition, disruption of supply chains, including factory closures
and port congestion, has resulted in apparel overages from late arriving inventory and elevated container and transportation
costs which began to moderate during the second half of fiscal 2022. We took actions during the third and fourth quarter of
fiscal 2022 to address these targeted inventory overages, and as a result, we believe our inventory is healthy and well-positioned
to meet the demands of our athletes in fiscal 2023. Although we have successfully managed these issues thus far, the continued
effect of these challenges may impact longer-term consumer discretionary spending behavior and the promotional landscape in
which we operate. Our fiscal 2023 outlook contemplates this uncertainty.
26
How We Evaluate Our Operations
Senior management focuses on certain key indicators to monitor our performance including:
•
•
•
•
•
Comparable store sales performance – Our management considers comparable store sales, which includes online sales,
to be an important indicator of our current performance. Comparable store sales results are important to leverage our
costs, which include occupancy costs, store payroll and other store expenses. Comparable store sales also have a direct
impact on our total net sales, net income, cash and working capital. A store is included in the comparable store sales
calculation during the fiscal period that it commences its 14th full month of operations. Relocated stores are included
in the comparable store sales calculation from the open date of the original location. Stores that were permanently
closed during the applicable period have been excluded from comparable store sales results. For further discussion of
our comparable store sales refer to the “Results of Operations” section herein.
Earnings before taxes and the related operating margin – Our management views operating margin and earnings before
taxes as key indicators of our performance. The key drivers of earnings before taxes are comparable store sales, gross
profit, and our ability to control selling, general and administrative expenses.
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, which typically normalizes in our fourth fiscal
quarter. For further discussion of our cash flows refer to the “Liquidity and Capital Resources” section herein.
Quality of merchandise offerings – To measure effectiveness of our merchandise offerings, we monitor sell-throughs,
inventory turns, gross margins and markdown rates at the department and style level. This analysis helps us manage
inventory levels to reduce working capital requirements and deliver optimal gross margins by improving merchandise
flow and establishing appropriate price points to minimize markdowns.
Store productivity – To assess store-level performance, we monitor various indicators, including new store
productivity, sales per square foot, store operating contribution margin and store cash flow.
Executive Summary
•
Net sales increased 0.6% to $12.37 billion in fiscal 2022 from $12.29 billion in fiscal 2021, which included a decrease
in comparable store sales of 0.5% following a 27.4% increase in 2021. When compared to fiscal 2019, net sales
increased 41.3%.
• We reported net income of $1.0 billion, or $10.78 per diluted share, in fiscal 2022, compared to $1.52 billion, or
$13.87 per diluted share, during fiscal 2021.
◦ Fiscal 2022 net income includes charges of $22.3 million, net of tax, or $0.25 per diluted share, related to the
Field & Stream Exit. Additionally, earnings per diluted share for fiscal 2022 reflects our adoption of ASU
2020-06, which requires the assumption that our convertible senior notes due 2025 (the “Convertible Senior
Notes”) will be settled in shares of our common stock. As a result, fiscal 2022 earnings per diluted share
excluded $27.1 million of interest expense, net of tax, and included 10.8 million diluted shares related to the
Convertible Senior Notes, which together decreased earnings per diluted share by $1.01. During fiscal 2022, we
settled $515.9 million of our Convertible Senior Notes without dilutive effect, as the related principal was
settled in cash and due to the shares received from its convertible bond hedge.
◦ Fiscal 2021 net income included approximately $15.0 million of pre-tax expenses, or $0.10 per diluted share net
of tax, of teammate compensation and safety costs resulting from the COVID-19 pandemic. Additionally, fiscal
2021 net income included $22.8 million of non-cash interest expense, net of tax, and earnings per diluted share
included 11.3 million shares related to the Convertible Senior Notes that were designed to be offset at
conversion by our bond hedge, which together decreased earnings per diluted share by $1.83 in the prior year.
27
•
In addition, during fiscal 2022, we:
◦ Terminated the proportionate amount of warrants concurrent with our exchange of $515.9 million of our
Convertible Senior Notes, resulting in the issuance of 9.8 million shares of our common stock;
◦ Declared and paid aggregate cash dividends on a quarterly basis for a total amount of $1.95 per share on our
common stock and Class B common stock; and
◦ Repurchased 5.0 million shares of common stock under our share repurchase program for a total cost of $426.7
million.
•
The following table summarizes store openings and closings in fiscal 2022 and fiscal 2021:
DICK’S
Sporting
Goods (1)
Fiscal 2022
Specialty
Concept
Stores (2)
Total (3)
DICK’S
Sporting
Goods
Fiscal 2021
Specialty
Concept
Stores (2)
730
4
6
728
3
131
9
15
125
1
861
13
21
853
4
728
6
4
730
11
126
8
3
131
1
Total (3)
854
14
7
861
12
Beginning stores
New stores
Closed stores
Ending stores
Relocated stores
(1) As of January 28, 2023, includes three DICK'S House of Sport stores.
(2)
Includes our Golf Galaxy, Field & Stream, Public Lands and Going Going Gone! stores. As of January 28, 2023,
we operated 98 Golf Galaxy stores, seven Public Lands stores, 15 Going Going Gone! stores, and five Field &
Stream 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 January 28, 2023, the Company operated 16 combo stores.
(3) Excludes 43 and 14 temporary Warehouse Sale store locations as of January 28, 2023 and January 29, 2022,
respectively.
Results of Operations
The following table presents, for the fiscal years indicated, selected items in the Consolidated Statements of Income as a
percentage of our net sales, as well as the basis point change in percentage of net sales from fiscal 2022 to fiscal 2021:
28
Net sales (1)
Cost of goods sold, including occupancy and distribution costs (2)
Gross profit
Selling, general and administrative expenses (3)
Pre-opening expenses (4)
Income from operations
Interest expense
Other income
Income before income taxes
Provision for income taxes
Net income
Other Data:
Comparable store sales (decrease) increase (5)
Number of stores at end of period (6)
Total square feet at end of period (in millions) (6)
Fiscal Year
2022 (A)
100.00 %
2021
100.00 %
Basis Point
Change in
Percentage of
Net Sales from
Prior Year
2021 - 2022(A)
N/A
369
(369)
101
2
(472)
30
1
(503)
(111)
(393)
65.36
34.64
22.68
0.13
11.83
0.77
(0.13)
11.19
2.75
61.67
38.33
21.67
0.11
16.55
0.47
(0.14)
16.22
3.86
8.43 %
12.36 %
(0.5) %
853
42.6
27.4 %
861
42.4
(A) Column does not add due to rounding.
(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.
(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.
(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.
(4) Pre-opening expenses, which consist primarily of rent, marketing, payroll, recruiting and other store preparation costs are
expensed as incurred. Rent is recognized within pre-opening expense from the date we take possession of a site through
the date the store opens.
(5) Beginning in fiscal 2022, we revised our method for calculating comparable store sales by including relocated store
locations. Prior year fiscal 2021 information was revised to reflect this change for comparability purposes. See additional
details as furnished in Exhibit 99.2 of the Company’s Form 8-K, which was filed with the SEC on March 8, 2022.
(6)
Includes our DICK’S Sporting Goods, Golf Galaxy, Public Lands, Going Going Gone! and Field & Stream stores.
Excludes temporary Warehouse Sale store locations. Fiscal 2022 store count reflects the closure of twelve Field & Stream
stores for which the associated square footage of each closed store was retained as we plan in the near-term to convert
them into DICK’S House of Sport stores, expanded DICK’S Sporting Goods stores, or other specialty concept stores.
Note - As retailers vary in how they record costs of operating their stores and supply chain between cost of goods sold and
selling, general and administrative expenses, our gross profit rate and selling, general and administrative expenses rate may
not be comparable to other retailers. For additional information regarding the types of costs classified within cost of goods
sold, selling, general and administrative expenses or any other financial statement line items presented herein, refer to Note 1
– Basis of Presentation and Summary of Significant Accounting Policies included in Part IV. Item 15. Exhibits and Financial
Statement Schedules of this Annual Report on Form 10-K.
29
A discussion regarding our financial condition and results of operations for the year ended January 28, 2023 (Fiscal 2022)
compared to the year ended January 29, 2022 (Fiscal 2021) is presented below. A discussion regarding our financial condition
and results of operations for Fiscal 2021 compared to the year ended January 30, 2021 (Fiscal 2020) can be found under Item
7 of Part II of our Annual Report on Form 10-K for the fiscal year ended January 29, 2022, filed with the SEC on March 23,
2022.
Fiscal 2022 Compared to Fiscal 2021
Net Sales
Net sales increased 0.6% to $12.37 billion in fiscal 2022 from $12.29 billion in fiscal 2021 due to a $131.9 million increase in
net sales primarily attributable to new temporary Warehouse Sale and other stores, partially offset by $57.1 million, or 0.5%, of
a decrease in comparable store sales. The decrease in comparable store sales included a 0.7% decrease in transactions offset by
a 0.2% increase in sales per transaction, and reflects an anticipated sales normalization in certain categories, including fitness
and outdoor equipment, along with a favorable sales impact in fiscal 2021 following government stimulus payments, partially
offset by growth in footwear, team sports and athletic apparel.
Income from Operations
Income from operations decreased to $1,463.0 million in fiscal 2022 from $2,034.5 million in fiscal 2021.
Gross profit decreased to $4,284.6 million in fiscal 2022 from $4,711.9 million in fiscal 2021 and decreased as a percentage of
net sales by 369 basis points. Merchandise margins decreased 304 basis points as a result of our actions to reduce targeted
apparel inventory overages, item-level deals provided to our athletes during the holiday season and higher inventory shrink due
to increased theft. 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. Our occupancy costs
increased $44.1 million compared to fiscal 2021 and decreased gross profit as a percentage of net sales by 30 basis points. The
remaining decrease in gross profit as a percentage of net sales was driven by an increase in eCommerce shipping expense due
primarily to higher shipping rates and penetration of eCommerce sales compared to the prior year.
Selling, general and administrative expenses increased to $2,805.5 million in the current year from $2,664.1 million in fiscal
2021, and increased as a percentage of net sales by 101 basis points. Fiscal 2022 included Field & Stream Exit charges of $29.3
million, and fiscal 2021 included approximately $15.0 million of COVID-related costs. The remaining $127.1 million increase
was primarily driven by investments in hourly wage rates, talent and technology to support our growth strategies, offset by
lower incentive compensation expense and a $31.7 million net cost reduction compared to fiscal 2021 related to changes in the
investment values of our deferred compensation plans, for which the corresponding investment expense was recognized in
Other Income.
Interest Expense
Interest expense increased to $95.2 million in fiscal 2022 compared to $57.8 million in fiscal 2021. The increase was primarily
due to a $52.8 million increase in interest expense related to the aggregate $1.5 billion Senior Notes issued during the fourth
quarter of 2021 and $23.3 million of inducement charges related to the exchange of $515.9 million aggregate principal amount
of the Convertible Senior Notes, partially offset by a $36.2 million reduction in interest expense related to our Convertible
Senior Notes, due to exchange transactions and our adoption of ASU 2020-06; Refer to Part IV. Item 15. Exhibits and Financial
Statement Schedules, Note 1 – Basis of Presentation and Summary of Significant Accounting Policies for additional
information.
Other Income
Other income decreased to $15.9 million in fiscal 2022 compared to $17.8 million in fiscal 2021. 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. The Company recognized $14.6 million of
investment expense during fiscal 2022 compared to investment income of $17.1 million during fiscal 2021, primarily driven by
performance in equity markets which impacted the deferred compensation plan investment values. This total $31.7 million
decrease related to our deferred compensation plan investment values was offset by a $26.7 million increase in interest income
as a result of higher average interest rates on cash and cash equivalents during the current year.
30
Income Taxes
Our effective tax rate increased to 24.6% in the current year from 23.8% in fiscal 2021. The current year effective tax rate was
unfavorably impacted by eliminated tax deductions from our bond hedge following our Convertible Senior Notes exchange
transactions, which impacted our income tax expense by $21.5 million, partially offset by the favorable rate impact of the
vesting of employee equity awards on lower pre-tax income.
Liquidity and Capital Resources
Our cash on hand as of January 28, 2023 was $1.9 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, 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 fiscal 2022.
The following sections describe the potential short and long-term impacts to our liquidity and capital requirements.
Leases
We lease substantially all of our stores, three of our distribution centers, and certain equipment and storage under non-
cancellable operating leases that expire at various dates through 2035. Approximately three-quarters of our DICK’S Sporting
Goods stores will be up for lease renewal at our option over the next five years, and we plan to leverage the significant
flexibility within our existing real estate portfolio to capitalize on future real estate opportunities. Refer to Part IV. Item 15.
Exhibits and Financial Statement Schedules, Note 7 – Leases for further information.
Revolving Credit Facility
We have a $1.6 billion Credit Facility, which includes a maximum amount of $75 million to be issued in the form of letters of
credit. Loans under the Credit Facility bear interest at an alternate base rate or an adjusted secured overnight financing rate plus,
in each case, an applicable margin percentage. As of January 28, 2023, there were no borrowings outstanding under the Credit
Facility, and we have total remaining borrowing capacity, after adjusting for $16.1 million of standby letters of credit, of $1.58
billion. We were in compliance with all covenants under the Credit Facility agreement at January 28, 2023. Refer to Part IV.
Item 15. Exhibits and Financial Statement Schedules, Note 8 – Revolving Credit Facility for further information.
Senior Notes
As of January 28, 2023, we have $750 million principal amount of senior notes due 2032 (the “2032 Notes”) and $750 million
principal amount of senior notes due 2052 outstanding (the “2052 Notes” and together with the 2032 Notes, the “Senior
Notes”). Cash interest accrues at a rate of 3.15% per year on the 2032 Notes and 4.10% per year on the 2052 Notes, each of
which are payable semi-annually in arrears on January 15 and July 15. Refer to Part IV. Item 15. Exhibits and Financial
Statement Schedules, Note 9 – Senior Notes for further information.
As of January 28, 2023, our Senior Notes have long-term credit ratings by Moody’s and Standard & Poor’s rating agencies of
Baa3 and BBB, respectively.
Convertible Senior Notes
Following our exchanges totaling $515.9 million principal amount in cash during fiscal 2022, we have an aggregate remaining
principal amount of $59.1 million of Convertible Senior Notes outstanding as of January 28, 2023. On February 9, 2023, the
Company provided irrevocable notice to the noteholders of our Convertible Senior Notes of our election to redeem the
remaining principal in shares. The Company intends to offset share dilution from this settlement through share repurchases
using excess cash, free cash flow or borrowings on our Credit Facility. Refer to Part IV. Item 15. Exhibits and Financial
Statement Schedules, Note 16 – Subsequent Events for further information.
Capital Expenditures
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. In fiscal 2022, capital expenditures totaled $364.1 million on a gross basis and $328.0 million on a net
basis, which includes tenant allowances provided by landlords.
31
We anticipate that fiscal 2023 capital expenditures will be in a range of $550 to $600 million, net of tenant allowances provided
by landlords. We expect our capital expenditures to be concentrated on new store development, relocations and remodels,
including nine DICK’S House of Sport stores and eleven Golf Galaxy Performance Centers, improvements within our existing
stores including converting over 100 stores to premium full-service footwear decks, and continued investments in technology to
enhance our store fulfillment, in-store pickup and other foundational capabilities.
Share Repurchases
From time-to-time, we may opportunistically repurchase shares of our common stock. In fiscal 2022, we repurchased
approximately 5.0 million shares of our common stock for $426.7 million. During fiscal 2022, we also paid $31.7 million for
shares repurchased during fiscal 2021. We currently operate under a $2.0 billion share repurchase program that was authorized
by the Board of Directors in December 2021. As of January 28, 2023, the available amount remaining under the December
2021 authorization was $1.4 billion.
Any future share repurchase programs are subject to authorization by our Board of Directors and will be dependent upon future
earnings, cash flows, financial requirements and other factors.
Dividends
In fiscal 2022, we paid $163.1 million of dividends to our stockholders. On March 6, 2023, our Board of Directors declared a
105% increase in our quarterly cash dividend compared to the previous quarterly per share amount. The dividend of $1.00 per
share of common stock and Class B common stock is payable on March 31, 2023 to stockholders of record as of the close of
business on March 17, 2023. During fiscal 2021, we paid $603.0 million in dividends, which included quarterly dividends and a
special dividend in the amount of $5.50 per share, on our common stock and Class B common stock.
The declaration of future dividends and the establishment of the per share amount, record dates and payment dates for any such
future dividends are subject to authorization by our Board of Directors and are dependent upon multiple factors including future
earnings, cash flows, financial requirements and other considerations.
Supply Chain Financing
We have entered into supply chain financing arrangements with several financial institutions, whereby suppliers have the
opportunity to settle outstanding payment obligations early at a discount. In turn, we settle invoices with the financial
institutions in accordance with the original supplier payment terms. Our rights and obligations to our suppliers, including
amounts due and scheduled payment terms, are not impacted. Our liability associated with the funded participation in the
arrangements, which is presented within accounts payable on the Consolidated Balance Sheet, was $40.1 million and $76.0
million as of January 28, 2023 and January 29, 2022, respectively.
Cash Flows
Changes in cash and cash equivalents for the last three fiscal years are as follows (in thousands):
Net cash provided by operating activities
Net cash used in investing activities
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
$
$
Operating Activities
January 28,
2023
Fiscal Year Ended
January 29,
2022
1,616,872 $
(343,979)
(287,722)
(33)
985,138 $
January 30,
2021
1,552,769
(224,164)
260,057
71
1,588,733
921,881 $
(392,894)
(1,247,636)
(170)
(718,819) $
Cash flows provided by operating activities decreased $695.0 million in fiscal 2022 compared to fiscal 2021. The decrease was
primarily due to a $476.7 million decrease in earnings and a $213.1 million increase in cash payments for inventory and
accounts payable to replenish inventory levels after a 28.3% sales increase in fiscal 2021 and supply chain disruptions
following the emergence of COVID-19, which resulted in inventory growth to support our 41.3% sales growth in fiscal 2022
when compared to fiscal 2019. The remaining decrease in cash provided by operating activities was primarily driven by a
$135.5 million decrease from accrued expenses as a result of year-over-year changes in incentive compensation accruals and
corresponding payments, and the timing of marketing and deferred compensation plan payments, offset by an increase from
changes in operating lease assets and liabilities of $70.1 million due to the timing of rent payments at the end of fiscal 2022.
32
Investing Activities
Cash used in investing activities for fiscal 2022 increased $48.9 million to $392.9 million, due to an increase in gross capital
expenditures. Gross capital expenditures for fiscal 2022 included higher investments in our stores and technology, offset by last
year’s investments in merchandise presentation and improving the fitting and lesson experience in our golf business. Cash used
in investing activities also included progress payments for the purchase of corporate aircraft and investments in organizations
that focus on innovation and improving local communities through sport.
Financing Activities
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 $959.9 million during fiscal 2022 compared to fiscal 2021. Fiscal
2022 included the exchange of $515.9 million aggregate principal amount of our Convertible Senior Notes and $458.5 million
in share repurchases. Fiscal 2021 included over $1.1 billion in share repurchases and the payment of a special dividend of $5.50
per share, which was partially offset by our issuance of the Senior Notes that provided net proceeds of approximately $1.5
billion.
Contractual Obligations and Commercial Commitments
We are party to contractual obligations that involve commitments to make payments to third parties in the ordinary course of
business. Our future contractual obligations primarily consist of payments for operating leases, long-term debt and related
interest payments, and other purchase obligations. Refer to Part IV. Item 15. Exhibits and Financial Statement Schedules, Note
7 – Leases, Note 9 – Senior Notes and Note 10 – Convertible Senior Notes for amounts outstanding as of January 28, 2023
related to operating leases and long-term debt.
Other purchase obligations are for marketing commitments to promote our brand and products, including media and naming
rights, technology-related commitments, licenses for trademarks, and other ordinary course commitments. In the ordinary
course of business, we enter into many contractual commitments, including purchase orders and commitments for products or
services, but generally, such commitments represent annual or cancellable commitments. The amount of non-cancellable
purchase commitments as of January 28, 2023 were approximately $265 million.
Critical Accounting Policies and Use of Estimates
Our significant accounting policies are described in Part IV. Item 15. Exhibits and Financial Statement Schedules, Note 1 –
Basis of Presentation and Summary of Significant Accounting Policies. Critical accounting policies are those that we believe
are both 1) most important to the portrayal of our financial condition and results of operations and 2) require our most difficult,
subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently
uncertain. Judgments and uncertainties affecting the application of such policies may result in materially different amounts
being reported under different conditions or using different assumptions.
We consider the following policies to be the most critical in understanding the judgments that are involved in preparing our
consolidated financial statements.
Inventory Valuation
We value inventory using the lower of weighted average cost and net realizable value, which is generally based on the selling
price expectations of the merchandise. We regularly review inventories to determine if the carrying value of the inventory
exceeds net realizable value and, when determined necessary, record a reserve to reduce the carrying value to net realizable
value. Changes in customer merchandise preference, current and anticipated demand, consumer spending, weather patterns,
economic conditions, business trends or merchandising strategies could cause our inventory to be exposed to obsolescence or
slow-moving merchandise. A 10% change in our obsolete inventory reserves as of January 28, 2023, would have affected
income before income taxes by approximately $5.1 million in fiscal 2022.
Shrink expense is accrued as a percentage of merchandise sales based on historical shrink trends. We perform physical
inventories at our stores and distribution centers throughout the year. The shrink reserve represents the cumulative loss estimate
for each of our locations since the last physical inventory date through the reporting date. Estimates by location and in the
aggregate are impacted by internal and external factors and may vary significantly from actual results. A 10% change in our
shrink reserve as of January 28, 2023, would have affected income before income taxes by approximately $1.8 million in fiscal
2022.
33
Goodwill and Intangible Assets
Goodwill, indefinite-lived and other finite-lived intangible assets are reviewed for impairment on an annual basis, or whenever
circumstances indicate that a decline in value may have occurred. Our evaluation for impairment requires accounting judgments
and financial estimates in determining the fair value of the reporting unit or asset. If these judgments or estimates change in the
future, we may be required to record impairment charges for these assets.
Our goodwill impairment test compares the fair value of each reporting unit to its carrying value. We determine the fair value of
our reporting units using a combination of an income approach and a market approach. Estimates may differ from actual results
due to, among other things, economic conditions, changes to our business models, or changes in operating performance.
Significant differences between these estimates and actual results could result in future impairment charges and could
materially affect our future financial results. If the fair value of the reporting unit exceeds the carrying value of the net assets
assigned to that reporting unit, goodwill is not impaired. If the carrying value of the net assets assigned to the reporting unit
exceeds the fair value of the reporting unit, an impairment charge is recorded to reduce the carrying value of the reporting unit
to its fair value. As of January 28, 2023, we had no reporting units at risk of impairment and a 10% change in the fair value of
our reporting units would not indicate a potential impairment of goodwill. The fair value of our reporting unit has remained
substantially in excess of its carrying value over the last three fiscal years.
Similar to our test for impairment of goodwill, the impairment test for indefinite-lived intangible assets involves comparing
their estimated fair values to their carrying values. We estimate the fair value of indefinite-lived intangible assets, which are
comprised primarily of trademarks and trade names, based on an income approach using the relief-from-royalty method, which
assumes that, in lieu of ownership, a third-party would be willing to pay a royalty in order to derive a benefit from these types
of assets. This approach is dependent on a number of factors, including estimates of future sales projections and growth, royalty
rates in the category of intellectual property, discount rates and other variables. If actual results are not consistent with our
estimates and assumptions used in estimating fair value, we may be exposed to material losses. We recognize an impairment
charge when the estimated fair value of the intangible asset is less than its carrying value. We recorded no such impairments in
fiscal 2022 or 2021.
Impairment of Long-Lived Assets
We review long-lived assets whenever events and circumstances indicate that the carrying value of these assets may not be
recoverable based on estimated undiscounted future cash flows. Assets are reviewed at the lowest level for which independent
cash flows can be identified, which is typically the store level. We use an income approach to determine the fair value of
individual store locations, which requires discounting projected future cash flows over each store’s remaining lease term. When
determining the stream of projected future cash flows associated with an individual store location, we make assumptions about
key store variables that incorporate local market conditions, including sales growth rates, gross margin and controllable
expenses, such as store payroll. An impairment loss is recognized when the carrying amount of the store location is not
recoverable and exceeds its fair value. During fiscal 2022, we recorded a non-cash impairment charge of $28.5 million for store
asset disposals at twelve Field & Stream stores that we closed in the period for conversion into DICK’S House of Sport stores
or expanded DICK’S Sporting Goods stores. There were no other significant long-lived assets impairment charges recognized
during fiscal 2022, 2021 or 2020.
34
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
We maintain our Credit Facility to support potential liquidity and capital needs. The interest rate under our current Credit
Facility is variable and is benchmarked to, at our option, a base rate or an adjusted secured overnight financing rate (“SOFR”)
plus, in each case, an applicable margin percentage. As of January 28, 2023 and January 29, 2022, there were no outstanding
borrowings under the Credit Facility, and we did not draw on our current or former Credit Facility during fiscal 2022 or fiscal
2021. Accordingly, a hypothetical 100 basis point increase or decrease in interest rates would not have materially affected our
financial condition, results of operations or cash flows.
The cash coupons on our Senior Notes and Convertible Senior Notes are fixed. Accordingly, interest expense related to these
instruments is not affected by interest rate fluctuations. However, the fair value of our fixed rate debt will generally fluctuate
with movements of interest rates. The fair value of our debt instruments with fixed interest rates is disclosed in Part IV. Item 15.
Exhibits and Financial Statement Schedules, Note 11 – Fair Value Measurements.
Credit Risk
In April 2020, we issued the Convertible Senior Notes. In connection with the issuance of the Convertible Senior Notes, we
also entered into five-year convertible bond hedges with several parties (“the counterparties”) and/or certain of their affiliates.
Subject to the movement in our common stock price, we could be exposed to credit risk arising out of settling the convertible
bond hedges. Based on our review of the possible settlements and the credit strength of the counterparties and their affiliates,
along with our recent notice as announced on February 9, 2023 to call the $59.1 million remaining aggregate principal for
redemption on April 18, 2023, we do not believe there is a material exposure to credit risk as a result of these transactions.
Refer to Part IV. Item 15. Exhibits and Financial Statement Schedules, Note 16 – Subsequent Events for further information.
Impact of Inflation
Inflationary factors such as increases in the cost of our products, overhead costs or wage rates may adversely affect our
operating results. Although we do not believe that inflation has had a material impact on our financial position or results of
operations to date, a high rate of inflation in the future may adversely impact consumer demand or have an adverse effect on our
ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net sales if
the selling prices of our products do not increase with inflation.
Seasonality and Quarterly Results
Our business is subject to seasonal influences, including the success of holiday selling season and the impact of unseasonable
weather conditions. Although our highest sales and operating income results have historically occurred in the second and fourth
fiscal quarters, our business has increasingly been less affected by seasonal fluctuations in recent years. However, results for
any quarter are not necessarily indicative of the results that may be achieved for the fiscal year.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required to be filed hereunder are set forth on pages 44 through 69 of this Annual Report on Form 10-
K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
35
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company carried out an evaluation, under the supervision and with the participation of the Company’s management,
including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that
evaluation, the Company’s management, including the Company’s Chief Executive Officer and the Chief Financial Officer
concluded that, as of January 28, 2023, the Company’s disclosure controls and procedures were effective in ensuring that
material information for the Company, including its consolidated subsidiaries, required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s (“SEC”) rules and forms, and that it is accumulated and communicated
to management, including our principal executive and financial officers, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.
Report of Management on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial
reporting for external purposes in accordance with accounting principles generally accepted in the United States of America.
Internal control over financial reporting includes: maintaining records that in reasonable detail accurately and fairly reflect our
transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial
statements; providing reasonable assurance that receipts and expenditures of Company assets are made in accordance with
management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of Company
assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of
its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a
misstatement of our financial statements would be prevented or detected.
The Company’s management conducted an evaluation of the effectiveness of our internal control over financial reporting based
on the framework and criteria established in Internal Control—Integrated Framework (2013), issued by the Committee of
Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls,
evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this
evaluation. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was
effective as of January 28, 2023.
Deloitte & Touche LLP, an independent registered public accounting firm, has issued an attestation report on the Company’s
internal control over financial reporting included on the following page of this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
During the fourth quarter of fiscal 2022, there were no changes in the Company’s internal controls over financial reporting that
materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
Inherent Limitations of Control Systems
There are inherent limitations in the effectiveness of any control system, including the potential for human error and the
circumvention or overriding of the controls and procedures. Additionally, judgments in decision making can be faulty and
breakdowns can occur because of a simple error or mistake. An effective control system can provide only reasonable, not
absolute, assurance that the control objectives of the system are adequately met. Accordingly, our management, including our
Chief Executive Officer and Chief Financial Officer, does not expect that our control system can prevent or detect all error or
fraud. Finally, projections of any evaluation or assessment of effectiveness of a control system to future periods are subject to
the risks that, over time, controls may become inadequate because of changes in an entity’s operating environment or
deterioration in the degree of compliance with policies and procedures.
36
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of DICK’S Sporting Goods, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of DICK’S Sporting Goods, Inc. and subsidiaries (the
“Company”) as of January 28, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of January 28, 2023, based on criteria
established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended January 28, 2023, of the Company and our report
dated March 23, 2023, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of
Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
March 23, 2023
37
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
(a)
Information relative to Directors of the Company will be set forth under the section entitled “Item 1 - Election of Directors”
in the Company’s definitive Proxy Statement for the 2023 Annual Meeting of Stockholders (“2023 Proxy Statement”) and
is incorporated herein by reference.
(b) Information with respect to Executive Officers of the Company is set forth in Part I, Item 1 “Business.”
(c)
Information with respect to compliance with Section 16(a) of the Securities Exchange Act of 1934 is set forth under the
section entitled “Stock Ownership” in the 2023 Proxy Statement and is incorporated herein by reference.
(d) The Company has adopted a code of ethics that applies to all of its employees, including its principal executive officer,
principal financial officer, principal accounting officer, controller and other executive officers, and has adopted a separate
code of ethics that applies to the Board of Directors, the complete text of which are available through the Investor Relations
section of the Company’s website at dicks.com/investors. If the Company makes any amendments to either code of ethics
other than technical, administrative, or other non-substantive amendments, or grants any waivers, including implicit
waivers, from a provision of the Code of Conduct applicable to the Company’s principal executive officer, principal
financial officer, principal accounting officer or controller or persons performing similar functions, the Company will
disclose the nature of the amendment or waiver, its effective date and to whom it applies on its website or in a Current
Report on Form 8-K filed with the SEC. The Company’s website does not form a part of this Annual Report on Form 10-
K.
(e)
Information on our audit committee and audit committee financial experts will be set forth under the section entitled
“Corporate Governance” in the 2023 Proxy Statement and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is set forth under the sections entitled “Executive Compensation”, “Compensation
Tables”, “Corporate Governance” and “Item 1 - Election of Directors” in the Company’s 2023 Proxy Statement and is
incorporated herein by reference. The information under the caption “Executive Compensation - Compensation Committee
Report” shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by
reference into a future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the
Company specifically incorporates the information by reference.
38
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Part of the information required by this Item will be set forth under the caption “Stock Ownership” in the Company’s 2023
Proxy Statement and is incorporated herein by reference. The following table summarizes information, as of January 28, 2023,
for the equity compensation plans of the Company pursuant to which grants of options, restricted stock, restricted stock units or
other rights to acquire shares may be granted from time-to-time:
Equity Compensation Plan Information
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options
(a)
Weighted Average
Exercise Price of
Outstanding Options
(b)
2,711,481
$
19.96
—
2,711,481
Number of Securities
Available for Future
Issuance Under Equity
Compensation Plans
(Excluding Securities
Reflected in Column (a))
(c)
7,673,736 (2)
—
7,673,736
Plan Category
Equity compensation plans approved
by security holders (1)
Equity compensation plans not
approved by security holders
Total
(1) Represents outstanding awards pursuant to the Company’s 2012 Stock and Incentive Plan, as amended and restated
(the “2012 Plan”). Represents shares of common stock. Shares of Class B Common Stock are not authorized for
issuance under the 2012 Plan.
(2) Shares of common stock that are subject to any award (e.g., options, stock appreciation rights, restricted stock,
restricted stock units or performance stock) pursuant to the 2012 Plan will count against the aggregate number of
shares of common stock that may be issued as one share for every share issued.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item will be set forth under the caption “Transactions with Related Persons” and “Board
Independence” in the Company’s 2023 Proxy Statement and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item will be set forth under the caption “Ratification of Independent Registered Public
Accounting Firm – Audit and Non-Audit Fees and Independent Public Accountants” in the Company’s 2023 Proxy Statement
and is incorporated herein by reference.
39
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report on Form 10-K:
(1) Financial Statements. The Consolidated Financial Statements required to be filed hereunder are listed in the Index
to Consolidated Financial Statements on page 41 of this Annual Report on Form 10-K.
(2) Financial Statement Schedule. The consolidated financial statement schedule to be filed hereunder is included on
page 77 of this Annual Report on Form 10-K. Other schedules have not been included because they are not
applicable or because the information is included elsewhere in this report.
(3) Exhibits. The Exhibits listed in the Index to Exhibits, which appears on pages 70 to 74 and is incorporated herein
by reference, are filed as part of this Annual Report on Form 10-K. Certain Exhibits are incorporated by reference
from documents previously filed by the Company with the SEC pursuant to Rule 12b-32 under the Securities
Exchange Act of 1934, as amended.
40
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID 34)
Consolidated Statements of Income for the Fiscal Years Ended January 28, 2023, January 29, 2022, and January 30,
2021
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended January 28, 2023, January 29, 2022,
and January 30, 2021
Consolidated Balance Sheets as of January 28, 2023 and January 29, 2022
Consolidated Statements of Changes in Stockholders' Equity for the Fiscal Years Ended January 28, 2023, January
29, 2022, and January 30, 2021
Consolidated Statements of Cash Flows for the Fiscal Years Ended January 28, 2023, January 29, 2022, and
January 30, 2021
Notes to Consolidated Financial Statements for the Fiscal Years Ended January 28, 2023, January 29, 2022, and
January 30, 2021
Page
42
44
45
46
47
48
49 - 69
41
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of DICK’S Sporting Goods, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of DICK’S Sporting Goods, Inc. and subsidiaries (the
"Company") as of January 28, 2023 and January 29, 2022, the related consolidated statements of income, comprehensive
income, changes in stockholders’ equity, and cash flows, for each of the three years in the period ended January 28, 2023, and
the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Company as of January 28, 2023 and January 29, 2022, and the results of its
operations and its cash flows for each of the three years in the period ended January 28, 2023, in conformity with accounting
principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of January 28, 2023, based on criteria established in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 23, 2023 expressed an unqualified opinion on the Company's internal control over
financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Inventory Valuation— Refer to Note 1 to the financial statements
Critical Audit Matter Description
The Company values inventory using the lower of weighted average cost and net realizable value. Net realizable value is
generally based on the selling price expectations of the merchandise. The Company regularly reviews inventories to determine
if the carrying value of the inventory exceeds net realizable value and when determined necessary, records a reserve to reduce
the carrying value to net realizable value. Changes in customer merchandise preference, consumer spending, weather patterns,
economic conditions, business trends or merchandising strategies could cause the Company's inventory to be exposed to
obsolescence or slow-moving merchandise. Inventories, net and the inventory valuation reserve at January 28, 2023, totaled
$2.8 billion and $50.8 million, respectively.
We identified the inventory valuation reserve as a critical audit matter because of the extent of audit judgment and effort
required to evaluate management’s estimate and assumptions due to the subjective nature of the estimate described above.
42
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the inventory valuation reserve included the following, among others:
• We tested the effectiveness of controls over the inventory valuation reserve process, including controls over the inputs
that are used in management’s estimate.
• We evaluated the appropriateness and consistency of management’s methods and assumptions used in developing their
estimate of the inventory valuation reserve.
• We evaluated the appropriateness of specific inputs supporting management’s estimate, including the age of on-hand
inventory levels, historic inventory trends, and projected sales and gross margin rates used in the forecasted periods.
• We tested the mathematical accuracy of the Company’s inventory valuation reserve calculation.
• We compared actual inventory sold below cost in recent years to the inventory valuation reserve estimated by the
Company in recent years to evaluate management’s ability to accurately estimate the inventory valuation reserve.
/s/ Deloitte & Touche LLP
Pittsburgh, PA
March 23, 2023
We have served as the Company's auditor since 1998.
43
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Fiscal Year Ended
January 28,
2023
January 29,
2022
January 30,
2021
Net sales
$
12,368,198 $
12,293,368 $
Cost of goods sold, including occupancy and distribution costs
GROSS PROFIT
Selling, general and administrative expenses
Pre-opening expenses
INCOME FROM OPERATIONS
Interest expense
Other income
INCOME BEFORE INCOME TAXES
Provision for income taxes
NET INCOME
EARNINGS PER COMMON SHARE:
Basic
Diluted
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic
Diluted
8,083,640
4,284,558
2,805,462
16,077
1,463,019
95,220
(15,949)
1,383,748
340,610
7,581,482
4,711,886
2,664,083
13,300
2,034,503
57,839
(17,774)
1,994,438
474,567
$
$
$
1,043,138 $
1,519,871 $
13.43 $
10.78 $
18.27 $
13.87 $
77,672
99,274
83,183
109,578
9,584,019
6,533,312
3,050,707
2,298,534
10,696
741,477
48,812
(19,070)
711,735
181,484
530,251
6.29
5.72
84,258
92,639
See accompanying notes to consolidated financial statements.
44
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
NET INCOME
OTHER COMPREHENSIVE (LOSS) INCOME:
Foreign currency translation adjustment, net of tax
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME
Fiscal Year Ended
January 28,
2023
January 29,
2022
January 30,
2021
$
1,043,138 $
1,519,871 $
530,251
(170)
(170)
(33)
(33)
71
71
COMPREHENSIVE INCOME
$
1,042,968 $
1,519,838 $
530,322
See accompanying notes to consolidated financial statements.
45
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Accounts receivable, net
Income taxes receivable
Inventories, net
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Operating lease assets
Intangible assets, net
Goodwill
Deferred income taxes
Other assets
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Accrued expenses
Operating lease liabilities
Income taxes payable
Deferred revenue and other liabilities
Total current liabilities
LONG-TERM LIABILITIES:
Revolving credit borrowings
Senior notes due 2032 and 2052
Convertible senior notes due 2025
Long-term operating lease liabilities
Other long-term liabilities
Total long-term liabilities
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.01 per share; 5,000,000 shares authorized
Common stock, par value $0.01 per share; 200,000,000 shares authorized; 128,177,711 issued and 58,547,001
outstanding at January 28, 2023; 115,258,081 issued and 51,988,915 outstanding at January 29, 2022
Class B common stock, par value $0.01 per share; 40,000,000 shares authorized; 23,570,633 issued and
outstanding at January 28, 2023; 23,620,633 issued and outstanding at January 29, 2022
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
January 28,
2023
January 29,
2022
$
1,924,386 $
2,643,205
71,286
8,187
2,830,917
128,410
4,963,186
1,312,988
2,138,366
60,364
245,857
41,189
230,246
68,263
1,978
2,297,609
95,601
5,106,656
1,319,681
2,044,819
86,767
245,857
35,024
202,872
$
8,992,196 $
9,041,676
$
1,206,066 $
1,281,322
508,573
546,755
29,624
350,428
620,143
480,318
13,464
317,433
2,641,446
2,712,680
—
1,482,336
58,271
2,117,773
167,747
3,826,127
—
585
236
—
1,481,443
449,287
2,099,146
197,534
4,227,410
—
520
236
1,416,847
4,878,404
(252)
1,488,834
3,956,602
(82)
Treasury stock, at cost; 69,630,710 and 63,269,166 shares at January 28, 2023 and January 29, 2022, respectively
(3,771,197)
(3,344,524)
Total stockholders' equity
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
2,524,623
$
8,992,196 $
2,101,586
9,041,676
See accompanying notes to consolidated financial statements.
46
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except per share data)
Common Stock
Class B
Common Stock
Shares
Amount
Shares
Amount
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Total
BALANCE, February 1, 2020
59,256 $
593
24,291 $
243 $ 1,253,867 $ 2,645,281 $
(120) $ (2,168,266) $ 1,731,598
Equity component value of
convertible note issuance
Purchase of convertible note hedge
Sale of common stock warrants
Exchange of Class B common stock
for common stock
Exercise of stock options
Restricted stock vested
Minimum tax withholding
requirements
Net income
Stock-based compensation
Foreign currency translation
adjustment, net of taxes of $(22)
Cash dividends declared, $1.25 per
common share
—
—
—
555
781
804
(202)
—
—
—
—
—
—
—
6
8
8
(3)
—
—
—
—
—
—
—
(555)
—
—
—
—
—
—
—
—
—
—
(6)
—
—
—
—
—
—
—
160,693
(161,057)
105,225
—
37,615
(8)
(4,214)
—
—
—
—
—
—
—
—
530,251
50,177
—
—
—
—
(110,830)
—
—
—
—
—
—
—
—
—
71
—
—
—
—
—
—
—
—
—
—
—
160,693
(161,057)
105,225
—
37,623
—
(4,217)
530,251
50,177
71
—
(110,830)
BALANCE, January 30, 2021
61,195 $
612
23,736 $
237 $ 1,442,298 $ 3,064,702 $
(49) $ (2,168,266) $ 2,339,534
Exchange of Class B common stock
for common stock
Exercise of stock options
115
657
Restricted stock vested
1,151
Minimum tax withholding
requirements
Net income
Stock-based compensation
Foreign currency translation
adjustment, net of taxes of $10
(341)
—
—
—
1
6
12
(3)
—
—
—
Purchase of shares for treasury
(10,788)
(108)
Cash dividends declared, $7.10 per
common share
—
—
(115)
—
—
—
—
—
—
—
—
(1)
—
—
—
—
—
—
—
—
—
26,342
(12)
(32,594)
—
—
—
—
—
1,519,871
—
—
—
52,800
—
—
—
—
—
—
—
—
—
(33)
—
—
—
—
—
—
—
—
26,348
—
(32,597)
1,519,871
52,800
(33)
—
(1,176,258)
(1,176,366)
(627,971)
—
—
(627,971)
BALANCE, January 29, 2022
51,989 $
520
23,621 $
236 $ 1,488,834 $ 3,956,602 $
(82) $ (3,344,524) $ 2,101,586
Adjustment for cumulative effect
from change in accounting principle
(ASU 2020-06)
—
Exchange of convertible senior notes
due 2025 and partial unwind of
convertible bond hedge and warrants 9,782
Exchange of Class B common stock
for common stock
Exercise of stock options
50
837
Restricted stock vested
1,285
Minimum tax withholding
requirements
Net income
Stock-based compensation
Foreign currency translation
adjustment, net of taxes of $54
(425)
—
—
—
Purchase of shares for treasury
(4,971)
—
98
—
8
13
(4)
—
—
—
(50)
Cash dividends declared, $1.95 per
common share
—
—
—
—
(50)
—
—
—
—
—
—
—
—
—
(118,961)
34,232
—
—
—
—
—
—
—
—
—
—
16,643
—
23,673
(13)
(43,932)
—
—
—
—
—
—
1,043,138
50,603
—
—
—
—
—
—
(155,568)
—
—
—
—
—
—
—
—
(170)
—
—
—
(84,729)
—
—
—
—
—
—
—
—
16,741
—
23,681
—
(43,936)
1,043,138
50,603
(170)
(426,673)
(426,723)
—
(155,568)
BALANCE, January 28, 2023
58,547 $
585
23,571 $
236 $ 1,416,847 $ 4,878,404 $
(252) $ (3,771,197) $ 2,524,623
See accompanying notes to consolidated financial statements.
47
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
January 28,
2023
Fiscal Year Ended
January 29,
2022
January 30,
2021
$
1,043,138 $
1,519,871 $
530,251
Depreciation and amortization
Amortization of deferred financing fees and debt discount
Deferred income taxes
Stock-based compensation
Other, net
Changes in assets and liabilities:
Accounts receivable
Inventories
Prepaid expenses and other assets
Accounts payable
Accrued expenses
Income taxes payable / receivable
Construction allowances provided by landlords
Deferred revenue and other liabilities
Operating lease assets and liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
Proceeds from sale of other assets
Deposits and other investing activities
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Revolving credit borrowings
Revolving credit repayments
Proceeds from issuance of convertible senior notes due 2025
Principal paid in connection with exchange of convertible senior notes due 2025
Payments for purchase of bond hedges
Proceeds from issuance of warrants
Transaction costs for debt issuance
Proceeds from senior notes due 2032 and 2052, net of debt discount
Payments on finance lease obligations
Proceeds from exercise of stock options
Minimum tax withholding requirements
Cash paid for treasury stock
Cash dividends paid to stockholders
(Decrease) increase in bank overdraft
Net cash (used in) provided by financing activities
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD
Supplemental disclosure of cash flow information:
Accrued property and equipment
Cash paid during the fiscal year for interest
Cash paid during the fiscal year for income taxes
Accrued treasury stock
$
$
$
$
$
365,475
4,250
23,100
50,603
15,306
(13,558)
(533,308)
(9,690)
13,983
(74,205)
12,256
36,100
22,689
(34,258)
921,881
(364,075)
14,261
(43,080)
(392,894)
—
—
—
(515,865)
—
—
—
—
(740)
23,681
(43,936)
(458,456)
(163,081)
(89,239)
(1,247,636)
(170)
(718,819)
2,643,205
1,924,386 $
30,222 $
69,193 $
306,612 $
— $
322,551
30,794
16,451
52,800
—
2,011
(344,041)
(16,047)
37,782
61,307
(23,115)
40,195
20,648
(104,335)
1,616,872
(308,261)
9,671
(45,389)
(343,979)
—
—
—
—
—
—
(15,268)
1,496,671
(726)
26,348
(32,597)
(1,144,633)
(602,964)
(14,553)
(287,722)
(33)
985,138
1,658,067
2,643,205 $
35,903 $
22,899 $
487,808 $
31,733 $
326,014
21,581
(46,250)
50,177
—
2,308
248,707
3,898
199,295
108,420
29,908
56,713
57,795
(36,048)
1,552,769
(224,027)
—
(137)
(224,164)
1,291,700
(1,515,800)
575,000
—
(161,057)
105,225
(17,396)
—
(826)
37,623
(4,217)
—
(107,404)
57,209
260,057
71
1,588,733
69,334
1,658,067
26,981
20,517
203,082
—
See accompanying notes to consolidated financial statements.
48
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Summary of Significant Accounting Policies
DICK’S Sporting Goods, Inc. (together with its subsidiaries, referred to as “the Company”, “we”, “us” and “our” unless
specified otherwise) is a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-
quality sports equipment, apparel, footwear and accessories. As of January 28, 2023, we operated 728 DICK’S Sporting Goods
locations across the United States, serving and inspiring athletes and outdoor enthusiasts to achieve their personal best through
a blend of dedicated teammates, in-store experiences and unique specialty shop-in-shops. In addition to DICK’S Sporting
Goods stores, the Company owns and operates Golf Galaxy, Public Lands and Going Going Gone! specialty concept stores, and
offers its products both online and through mobile apps. The Company also owns and operates DICK’S House of Sport and
Golf Galaxy Performance Center, as well as GameChanger, a youth sports mobile app for scheduling, communications, live
scorekeeping and video streaming. When used in this Annual Report on Form 10-K, unless the context otherwise requires or
specifies, any reference to “year” is to the Company’s fiscal year.
Fiscal Year
The Company’s fiscal year ends on the Saturday closest to the end of January. Unless otherwise stated, references to years in
this Annual Report on Form 10-K relate to fiscal years, rather than to calendar years. Fiscal years 2022, 2021 and 2020 ended
on January 28, 2023, January 29, 2022 and January 30, 2021, respectively. All fiscal years presented include 52 weeks of
operations.
Principles of Consolidation
The Consolidated Financial Statements include DICK’S Sporting Goods, Inc. and its wholly-owned subsidiaries. All
intercompany accounts and transactions have been eliminated in consolidation.
Reclassifications
Certain reclassifications have been made to prior year amounts within the Consolidated Financial Statement Footnotes to
conform to the current year presentation.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and all highly liquid instruments purchased with a maturity of three months
or less at the date of purchase. Cash equivalents primarily consist of money market funds and commercial paper and are stated
at carrying value, which approximates fair value, and are considered Level 1 investments. Cash and cash equivalents were
comprised of the following for the fiscal years presented (in thousands):
Cash (1)
Money market funds
Commercial paper
Total cash and cash equivalents
2022
$
$
725,604 $
911,400
287,382
1,924,386 $
2021
678,236
1,910,000
54,969
2,643,205
(1) Cash includes amounts due from third-party financial institutions for the settlement of credit card and debit card transactions, which
typically process within three business days.
49
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Cash Management
The Company’s cash management system provides for the reimbursement of all major bank disbursement accounts on a daily
basis. Accounts payable at January 28, 2023 and January 29, 2022 include $7.4 million and $96.6 million, respectively, of
checks drawn in excess of cash balances not yet presented for payment.
Accounts Receivable
Accounts receivable primarily consist of amounts due from vendors and landlords. The amount of accounts receivable due from
landlords as of January 28, 2023 and January 29, 2022, was $34.3 million and $45.0 million, respectively. The Company’s
allowance for credit losses totaled $2.9 million and $3.2 million at January 28, 2023 and January 29, 2022, respectively.
Inventories
Inventories are stated at the lower of weighted average cost and net realizable value. Inventory costs consist of the direct cost of
merchandise including freight. Inventories are net of shrinkage, obsolescence, other valuation accounts and vendor allowances,
and totaled $139.5 million and $86.1 million at January 28, 2023 and January 29, 2022, respectively.
Property and Equipment
Property and equipment are recorded at cost and include finance leases. Renewals and betterments are capitalized. Repairs and
maintenance are expensed as incurred.
Depreciation is computed using the straight-line method over the following estimated useful lives:
Buildings
Leasehold improvements
Furniture, fixtures and equipment
Computer software
40 years
10-25 years
3-7 years
3-10 years
For leasehold improvements and property and equipment under finance lease agreements, depreciation is calculated using the
straight-line method over the shorter of the estimated useful lives of the assets or the lease term. Leasehold improvements made
after lease commencement are depreciated over the shorter of their estimated useful lives or the remaining lease term, including
renewal periods, if reasonably assured. The Company recognized depreciation expense of $332.3 million, $315.7 million and
$317.5 million in fiscal 2022, 2021 and 2020, respectively.
Impairment of Long-Lived Assets
The Company evaluates its long-lived assets and assesses whether the carrying values have been impaired whenever events and
circumstances indicate that the carrying values of these assets may not be recoverable based on estimated undiscounted future
cash flows. An impairment loss is recognized when the estimated undiscounted cash flows expected to result from the use of
the asset plus eventual net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset.
When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value as determined
based on quoted market prices or through the use of other valuation techniques. The related impairment expense is recorded
within selling, general and administrative expenses on the Consolidated Statements of Income.
Goodwill
Goodwill represents the excess of acquisition cost over the fair value of the net assets of acquired entities. The Company
assesses the carrying value of goodwill annually or whenever circumstances indicate that a decline in value may have occurred.
The Company’s goodwill impairment test compares the fair value of each reporting unit to its carrying value. The Company
determines the fair value of its reporting units using a combination of the income approach, by using a discounted cash flow
model, and a market value approach. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned
to that reporting unit, goodwill is not impaired. If the carrying value of the net assets assigned to the reporting unit exceeds the
fair value of the reporting unit, an impairment charge to selling, general and administrative expenses is recorded to reduce the
carrying value to the fair value. A reporting unit is the operating segment, or a business unit one level below that operating
segment, for which discrete financial information is prepared and regularly reviewed by management.
50
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Intangible Assets
Intangible assets consist of both indefinite-lived and finite-lived assets. The Company’s intangible assets are primarily
indefinite-lived, consisting mostly of trademarks and acquired trade names, which the Company tests annually for impairment,
or whenever circumstances indicate that a decline in value may have occurred, using Level 3 inputs. The Company estimates
the fair value of these intangible assets based on an income approach using the relief-from-royalty method.
The Company’s finite-lived intangible assets consist primarily of customer lists and other acquisition-related assets. Finite-lived
intangible assets are amortized over their estimated useful economic lives and are reviewed for impairment when factors
indicate that an impairment may have occurred. The Company recognizes an impairment charge when the estimated fair value
of the intangible asset is less than its carrying value.
Self-Insurance
The Company is self-insured for certain losses related to health, workers' compensation and general liability insurance, although
we maintain stop-loss coverage with third-party insurers to limit our liability exposure. Liabilities associated with these losses
are estimated in part by considering historical claims experience, industry factors, severity factors and other actuarial
assumptions.
Pre-opening Expenses
Pre-opening expenses, which consist primarily of rent, marketing, 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.
Earnings Per Common Share
Basic earnings per common share is computed based on the weighted average number of shares of common stock outstanding
for a given period. Diluted earnings per common share is computed based on the weighted average number of shares of
common stock outstanding, plus the effect of dilutive potential common shares, which include shares the Company could be
obligated to issue from its Convertible Senior Notes and warrants, and stock-based awards, such as stock options and restricted
stock. Dilutive potential common shares are excluded from the computation of earnings per share if their effect is anti-dilutive.
For all periods presented, dilutive potential common shares for the Company’s stock-based awards and warrants were
determined using the treasury stock method. For fiscal year 2021, the dilutive effect of the Convertible Senior Notes was
calculated using the treasury stock method; however, upon the adoption of ASU 2020-06, the Company was required to
calculate diluted earnings per common share using the if-converted method, which was applied to fiscal year 2022. Refer to
Recently Adopted Accounting Pronouncements below for further discussion.
Stock-Based Compensation
The Company has the ability to grant teammates a number of different stock-based awards, including restricted shares of
common stock, restricted stock units and stock options to purchase common stock, under the DICK’S Sporting Goods, Inc.
Amended and Restated 2012 Stock and Incentive Plan (the “2012 Plan”). The Company records stock-based compensation
expense based on the fair value of stock awards at the grant date, and recognizes the expense over the employees’ service
periods, net of estimated forfeitures.
Income Taxes
The Company utilizes the asset and liability method of accounting for income taxes and provides deferred income taxes for
temporary differences between the amounts reported for assets and liabilities for financial statement purposes and for income
tax reporting purposes, using enacted tax rates in effect in the years in which the differences are expected to reverse. The
Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be
sustained on examination by the relevant taxing authorities, based on the technical merits of the position. The tax benefits
recognized in the Consolidated Financial Statements from such a position are measured based on the largest benefit that will
more likely than not be realized upon ultimate settlement. Interest and penalties from income tax matters are recognized in
income tax expense.
51
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Revenue Recognition
Sales Transactions
Revenue is recognized upon satisfaction of all contractual performance obligations and transfer of control to the customer and is
measured as the amount of consideration to which the Company expects to be entitled to in exchange for corresponding goods
or services. Substantially all of the Company’s sales are single performance obligation arrangements for retail sale transactions
for which the transaction price is equivalent to the stated price of the product or service, net of any stated discounts applicable at
a point in time. Each sales transaction results in an implicit contract with the customer to deliver a product or service at the
point of sale. Revenue from retail sales is recognized at the point of sale. Sales tax amounts collected from customers that are
assessed by a governmental authority are excluded from revenue.
Revenue from eCommerce sales, including vendor-direct sales arrangements, is recognized upon shipment of merchandise.
Shipping and handling activities occurring subsequent to the transfer of control to the customer are accounted for as fulfillment
costs rather than as a promised service. 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.
Deferred Revenue
Revenue from gift cards and returned merchandise credits (collectively the “cards”) is deferred and recognized upon their
redemption. Income from unredeemed cards is recognized on the Consolidated Statements of Income within net sales in
proportion to the pattern of rights exercised by the customer in future periods. The Company performs an evaluation of
historical redemption patterns from the date of original issuance to estimate future period redemption activity. During the fiscal
years ended January 28, 2023 and January 29, 2022, the Company recognized $19.9 million and $19.5 million of gift card
breakage revenue, respectively, and experienced approximately $106.2 million and $87.2 million of gift card redemptions in
fiscal 2022 and fiscal 2021, respectively, that had been included in its gift card liability as of January 29, 2022 and January 30,
2021, respectively. Based on the Company’s historical experience, the majority of gift card revenue is recognized within 12
months of deferral. The cards have no expiration date.
Loyalty program points are accrued at the estimated retail value per point, net of estimated breakage. The Company estimates
the breakage of loyalty points based on historical redemption rates experienced within the loyalty program. Based on the
Company’s customer loyalty program policies, the majority of program points earned are redeemed or expire within 12 months.
Refer to Note 6 – Deferred Revenue and Other Liabilities for additional information regarding the amount of these liabilities at
January 28, 2023 and January 29, 2022.
Net sales by category
The following table disaggregates the amount of net sales attributable to hardlines, apparel and footwear for the last three fiscal
years (in millions):
Hardlines (1)
Apparel
Footwear (2)
Other (3)
Total net sales
2022
Fiscal Year
2021
$
4,952.2 $
5,407.9 $
4,218.1
2,979.1
218.8
4,131.2
2,562.8
191.5
2020
4,428.5
3,180.2
1,834.3
141.0
$
12,368.2 $
12,293.4 $
9,584.0
(1)
(2)
(3)
Includes items such as sporting goods equipment, fitness equipment, golf equipment and hunting and fishing gear.
Includes athletic shoes for running, walking, tennis, fitness and cross training, basketball and hiking. In addition, this category also
includes specialty footwear, including casual footwear and a complete line of cleats for team sports.
Includes the Company’s non-merchandise sales categories, including in-store services, shipping revenues, software subscription
revenues and credit card processing revenues.
52
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Cost of Goods Sold
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. The Company
defines 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.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include store and field support payroll and fringe benefits, advertising, bank card
charges, operating costs associated with the Company’s internal eCommerce platform, information systems, marketing, legal,
accounting, other store expenses and all expenses associated with operating the Company’s Customer Support Center (“CSC”).
Advertising Costs
Production costs for all forms of advertising and the costs to run the advertisements are expensed the first time the
advertisement takes place. Advertising expense, net of cooperative advertising, was $412.2 million, $410.9 million and $293.4
million for fiscal 2022, 2021, and 2020, respectively.
Business Development Allowances
Business development allowances include allowances, rebates and cooperative advertising funds received from vendors. These
funds are determined for each fiscal year and the majority are based on various quantitative contract terms. Amounts expected
to be received from vendors for the purchase of merchandise inventories (“vendor allowances”) are recognized as a reduction of
cost of goods sold as the merchandise is sold. Amounts that represent a reimbursement of costs incurred, such as advertising
(“cooperative advertising”), are recorded as a reduction to the related expense in the period that the related expense is incurred.
Segment Information
The Company is a specialty omni-channel retailer that offers a broad range of products in its specialty retail stores, which are
primarily located in the eastern United States. Given the economic characteristics of the store formats, the similar nature of the
products sold, the type of customer and method of distribution, the Company’s operating segments are aggregated within one
reportable segment. Refer to Revenue Recognition within this Note for additional disclosure of net sales by merchandise
category.
Construction Allowances
Nearly all of the Company’s store locations are leased. The Company may receive reimbursement from a landlord for a portion
of the cost of the structure, subject to satisfactory fulfillment of applicable lease provisions. These reimbursements may be
referred to as tenant allowances or construction allowances provided by landlords (“construction allowances”). The Company’s
accounting for construction allowances differs depending on whether the Company is deemed to have control of the underlying
asset prior to commencement of the lease.
•
•
If the Company is not deemed to have control of the underlying asset prior to lease commencement, reimbursement
from a landlord for tenant improvements is classified as a lease incentive and included as a reduction to the related
operating lease asset on the Consolidated Balance Sheets. The incentive is amortized as part of operating lease expense
on a straight-line basis over the term of the lease. Landlord reimbursements from these transactions are included in
cash flows from operating activities as a change in construction allowances provided by landlords.
If the Company is deemed to have control of the underlying asset prior to lease commencement, a sale and leaseback
of the asset occurs when construction of the asset is complete and the lease term begins, if relevant sale-leaseback
accounting criteria are met. Any gain or loss from the transaction is recorded in the period in which control of the
underlying asset is relinquished back to the lessor. The Company reports the amount of cash received for the
construction allowance as construction allowance receipts within the financing activities section of its Consolidated
Statements of Cash Flows when such allowances are received prior to completion of the sale-leaseback transaction.
The Company reports the amount of cash received from construction allowances as proceeds from sale leaseback
transactions within the investing activities section of its Consolidated Statements of Cash Flows when such amounts
are received after the sale-leaseback accounting criteria have been achieved.
53
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Leases
The Company determines whether a contract is or contains a lease at contract inception. Operating lease assets and liabilities
are recognized at the lease’s commencement date based on the present value of remaining fixed lease payments over the lease
term. As the rate implicit in the lease is not readily determinable in most of the Company’s leases, the Company uses its
incremental borrowing rate based on the information available at a lease’s commencement date to determine the present value
of lease payments. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a
collateralized basis to borrow an amount equal to the lease payments under similar terms. The operating lease asset also
includes any fixed lease payments made, net of lease incentives, and initial direct costs incurred.
Operating lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. Variable lease
payments are generally expensed as incurred and may include certain index-based changes in rent and other non-fixed payments
for services provided by the lessor. The Company’s lease terms may include options to extend or terminate the lease when it is
reasonably certain that the Company will exercise that option. The Company’s leases do not contain any material residual
guarantees or material restrictive covenants.
The Company has lease agreements with non-lease components that relate to the lease components and elected the practical
expedient to account for non-lease components, and the lease components to which they relate, as a single lease component for
all classes of underlying assets. The Company also elected the practical expedient to not recognize short-term leases with an
initial term of 12 months or less on the Consolidated Balance Sheet.
Recently Adopted Accounting Pronouncements
Reference Rate Reform
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04,
“Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The update
provides optional guidance to ease potential accounting impacts associated with transitioning away from reference rates such as
the London Interbank Offered Rate (“LIBOR”). The amendments in this ASU can be applied anytime between the first quarter
of fiscal 2020 and the fourth quarter of fiscal 2022, which were later deferred to December 2024 by the FASB’s issuance of
ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.” The Company’s primary
association with LIBOR was through interest rates applicable to loans under its former revolving credit facility, which was
terminated in January 2022 and replaced with a new revolving credit facility that uses an adjusted secured overnight financing
rate (“SOFR”). The Company adopted this guidance in the fourth quarter of fiscal 2022 on a prospective basis, which did not
have a material impact on the Company’s financial statements and related disclosures.
Convertible Instruments
In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and
Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40),” which removes the separation models for
convertible debt with cash conversion or beneficial conversion features. ASU 2020-06 also requires the application of the if-
converted method for calculating earnings per diluted share, under which the Company must assume that any conversion of its
convertible senior notes due 2025 (the “Convertible Senior Notes”) will be satisfied entirely in common stock.
The Company adopted ASU 2020-06 on the first day of fiscal 2022 using the modified retrospective approach, which resulted
in the following adjustments to the Consolidated Balance Sheet (in millions):
Balance sheet line item
Convertible senior notes due 2025
Net deferred tax assets
Additional paid-in capital
Retained earnings
Last Day of Fiscal
2021
Adoption of ASU
2020-06
First Day of Fiscal
2022
$
$
$
$
449.3 $
35.0 $
1,488.8 $
3,956.6 $
114.0 $
29.3 $
(119.0) $
34.2 $
563.3
64.3
1,369.8
3,990.8
54
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Following the adoption of ASU 2020-06, the embedded conversion feature of the Convertible Senior Notes is no longer
separately presented within stockholders’ equity, eliminating the non-cash debt discount. Accordingly, the Company’s effective
interest rate on the Convertible Senior Notes decreased from 11.6% to 3.9% upon adoption, resulting in a $27.4 million
reduction in pre-tax non-cash interest expense for fiscal 2022 as compared to fiscal 2021.
Despite the Company’s exchange of $515.9 million of principal in cash during fiscal 2022, the application of the if-converted
method requires earnings per diluted share to reflect that the Convertible Senior Notes will be settled entirely in shares upon
conversion. Prior to the adoption of ASU 2020-06, the Company used the treasury stock method which allowed the Company to
assume that the principal amount of the Convertible Senior Notes would be paid in cash. The impact of adoption was not
material to earnings per diluted share.
Recently Issued Accounting Pronouncement
Supplier Finance Programs
In September 2022, the FASB issued ASU 2022-04, “Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier
Finance Program Obligations,” which requires that a buyer in a supplier finance program disclose sufficient information about
the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from
period to period, and potential magnitude. The amendments in this ASU are effective for the first quarter of 2023, except for the
amendment on roll-forward information, which is effective for the first quarter of 2024, with early adoption permitted. The
Company is currently evaluating the impact that adoption of this accounting standard will have on its financial disclosures.
2. Earnings per Common Share
The computations for basic and diluted earnings per common share were as follows for the fiscal years presented below (in
thousands, except per share data):
Numerator:
Numerator for basic earnings per common share – Net income
$
1,043,138 $
1,519,871 $
530,251
Effect of dilutive securities
Interest expense associated with Convertible Senior Notes, net of tax
Numerator for diluted earnings per common share – Net income after the
effect of dilutive securities
27,060
—
—
$
1,070,198 $
1,519,871 $
530,251
2022
2021
2020
Denominator:
Weighted average common shares outstanding – basic
Dilutive effect of stock-based awards
Dilutive effect of warrants
Dilutive effect of Convertible Senior Notes
Weighted average common shares outstanding – diluted
Earnings per common share:
Basic
Diluted
77,672
5,235
5,575
10,792
99,274
83,183
6,503
8,560
11,332
109,578
84,258
4,185
736
3,460
92,639
$
$
13.43 $
10.78 $
18.27 $
13.87 $
6.29
5.72
Stock-based awards excluded from diluted shares
140
42
1,688
55
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The dilutive effect of the Convertible Senior Notes includes shares that were designed to be offset at settlement by shares
delivered from the bond hedge purchased by the Company. The shares provided by the bond hedge are anti-dilutive;
accordingly, they are not treated as a reduction to diluted weighted average shares outstanding for any periods presented. In
addition, following the adoption of ASU 2020-06, the dilutive effect of the Convertible Senior Notes for fiscal 2022 included
shares related to the principal amount of the Convertible Senior Notes, which has been cash settled to date. During fiscal 2022,
the Company exchanged $515.9 million aggregate principal amount of our 3.25% Convertible Senior Notes for cash and
terminated the proportionate amount of the convertible bond hedge without dilutive effect. Concurrently, the Company
terminated the proportionate amount of warrants, resulting in the issuance of 9.8 million shares of our common stock. Refer to
Note 10 – Convertible Senior Notes and Note 16 – Subsequent Events for further information.
3. Property and Equipment
Property and equipment are recorded at cost and consist of the following as of the end of the fiscal years presented below (in
thousands):
Buildings and land
Leasehold improvements
Furniture, fixtures and equipment
Computer software
Total property and equipment
Less: accumulated depreciation and amortization
Net property and equipment
2022
2021
$
355,105 $
332,207
1,940,711
1,275,236
545,136
1,846,630
1,246,138
508,870
4,116,188
3,933,845
(2,803,200)
(2,614,164)
$
1,312,988 $
1,319,681
The amounts above include construction in progress of $38.0 million and $39.8 million for fiscal 2022 and 2021, respectively.
4. Goodwill and Intangible Assets
Goodwill
The carrying amount of goodwill for fiscal 2022 and fiscal 2021 was $245.9 million, which is recorded net of $111.3 million in
accumulated impairments. No impairment charges were recorded against goodwill in fiscal 2022, 2021 or 2020.
Intangible Assets
The components of intangible assets were as follows as of the end of the fiscal years presented below (in thousands):
2022
2021
Trademarks (indefinite-lived) (1)
Trade names (indefinite-lived)
Customer lists
Other indefinite-lived intangible assets
Total intangible assets
Gross
Amount
Accumulated
Amortization
Gross
Amount
$
37,315 $
15,660
18,195
5,654
— $
—
(16,460)
—
Accumulated
Amortization
—
61,315 $
15,660
18,195
5,629
—
(14,032)
—
$
76,824 $
(16,460) $ 100,799 $
(14,032)
(1) In fiscal 2022 the $24.0 million carrying amount of the Field & Stream trademark was reclassified to current assets upon designation as
held-for-sale; refer to Note 11 – Fair Value Measurements for further information.
The Company had indefinite-lived and finite-lived intangible assets, net of accumulated amortization, of $58.6 million and $1.7
million, respectively, as of January 28, 2023 and $82.6 million and $4.2 million, respectively, as of January 29, 2022.
Amortization of the Company’s finite-lived intangible assets was $2.4 million, $3.7 million, and $4.3 million in fiscal 2022,
2021 and 2020, respectively.
56
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The Company expects to recognize amortization expense on existing finite-lived intangible assets as follows (in thousands):
Fiscal Year
2023
2024
Total
5. Accrued Expenses
Estimated
Amortization
Expense
$
$
1,544
191
1,735
Accrued expenses consist of the following as of the end of the fiscal years presented below (in thousands):
Payroll, withholdings and benefits
Real estate taxes, utilities and other occupancy costs
Property and equipment
Treasury stock
Sales tax
Other
Total accrued expenses
6. Deferred Revenue and Other Liabilities
2022
2021
$
218,802 $
297,409
91,527
30,222
—
33,404
134,618
$
508,573 $
88,860
35,903
31,733
30,540
135,698
620,143
Deferred revenue and other liabilities consist of the following as of the end of the fiscal years presented below (in thousands):
Current:
Deferred gift card revenue
Customer loyalty program
Other
Total current deferred revenue and other liabilities
Long-term:
Deferred compensation
Other
Total other long-term liabilities
7. Leases
2022
2021
$
230,601 $
209,763
44,644
75,183
46,071
61,599
350,428 $
317,433
133,489 $
150,825
34,258
46,709
167,747 $
197,534
$
$
$
The Company leases substantially all of its stores, three of its distribution centers, and certain equipment and storage under non-
cancellable operating leases that expire at various dates through 2035. The Company’s stores generally have initial lease terms
of 10 to 15 years and contain multiple five-year renewal options and rent escalation provisions. These lease agreements provide
primarily for the payment of minimum annual rentals, costs of utilities, property taxes, maintenance, common areas and
insurance.
57
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The components of lease cost for the following fiscal years presented below were as follows (in thousands):
Operating lease cost
Short-term lease cost
Variable lease cost
Sublease income
Total lease cost
2022
2021
2020
$
581,459 $
574,929 $
27,827
116,516
(11,787)
714,015 $
14,588
114,664
(11,571)
692,610 $
$
584,392
10,625
119,007
(10,798)
703,226
Supplemental cash flow information related to operating leases for the following fiscal years are presented below (in
thousands):
Cash paid for amounts included in the measurement of
operating lease liabilities
Non-cash operating lease assets obtained in exchange for
operating lease liabilities
$
$
2022
2021
2020
615,772 $
679,289 $
620,529
558,779 $
368,515 $
299,619
Supplemental balance sheet information related to operating leases were as follows:
Weighted average remaining lease term for operating leases
Weighted average discount rate for operating leases
January 28,
2023
January 29,
2022
6.58 years
5.64 %
6.09 years
5.82 %
Future maturities of operating lease liabilities were as follows as of January 28, 2023 (in thousands):
Fiscal Year
2023
2024
2025
2026
2027
Thereafter
Total future undiscounted lease payments
Less: imputed interest
Total reported lease liability
$
664,921
593,299
500,525
413,279
312,725
681,023
3,165,772
(501,244)
$
2,664,528
The Company has entered into operating leases related to future store locations that have not yet commenced. As of January 28,
2023 the future minimum payments on these leases approximated $238.2 million.
The Company acts as sublessor on several operating leases. As of January 28, 2023, total future undiscounted minimum rentals
under non-cancellable subleases approximated $58.3 million.
8. Revolving Credit Facility
On January 14, 2022, the Company entered into a new credit agreement (the “Credit Agreement”) with Wells Fargo Bank,
National Association, as administrative agent, providing for $1.6 billion in unsecured revolving credit capacity (the “Credit
Facility”), of which up to $75.0 million is available for letters of credit. The Credit Facility matures on January 14, 2027,
subject to extensions permitted under the Credit Agreement, and allows for $500.0 million in additional incremental borrowing
capacity, subject to existing or new lenders agreeing to provide such additional revolving commitments.
58
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The loans under the Credit Facility bear interest at an alternate base rate or an adjusted SOFR plus, in each case, an applicable
margin of 0.125% with respect to the alternate base rate and 1.125% with respect to the adjusted SOFR as of January 28, 2023,
which is subject to adjustment based on the Company’s public debt rating. The Credit Facility allows voluntary repayment of
outstanding loans at any time without premium or penalty, other than customary breakage costs with respect to SOFR loans.
The unused portion of the Credit Facility is subject to a commitment fee of 0.11% per year as of January 28, 2023, which is
adjusted based on the Company’s public debt rating. There were no borrowings outstanding under the Company’s revolving
line of credit agreements at January 28, 2023 or January 29, 2022. After adjusting for outstanding letters of credit of
$16.1 million, the Company’s total remaining borrowing capacity under the Credit Facility was $1.58 billion at January 28,
2023.
The Credit Agreement contains representations and warranties, affirmative and negative covenants and events of default
customary for unsecured financings of this type, including negative covenants that, among other things, limit the ability of the
Company and certain of its subsidiaries to incur liens, limit the ability of the Company to make certain fundamental changes
and limit the ability of the Company’s non-guarantor subsidiaries to incur indebtedness, in each case subject to a number of
important exceptions and qualifications. The Credit Agreement also contains a maximum lease-adjusted leverage ratio
covenant. The Company was in compliance with all covenants of the Credit Agreement at January 28, 2023.
9. Senior Notes
Key Terms
On January 14, 2022, the Company issued $750.0 million aggregate principal amount of 3.15% senior notes due 2032 (the
“2032 Notes”) and $750.0 million aggregate principal amount of 4.10% senior notes due 2052 (the “2052 Notes” and, together
with the 2032 Notes, the “Senior Notes”). The Senior Notes were issued under a base indenture, dated as of January 14, 2022
(the “Base Indenture”), as supplemented by a supplemental indenture, dated as of January 14, 2022 (the “Supplemental
Indenture” and, together with the Base Indenture, the “Indenture”), in each case by and between the Company and U.S. Bank
National Association, as trustee. The Notes are unsecured, unsubordinated obligations of the Company and rank equally in right
of payment to all of the Company’s existing and future unsecured and unsubordinated debt and other obligations. The Company
is required to pay interest on the Senior Notes semi-annually, in arrears, on January 15 and July 15 of each year, commencing
on July 15, 2022.
Net Proceeds and Carrying Values
Net proceeds from the issuance of the Senior Notes totaled approximately $1.5 billion, after deducting the applicable discount.
The Company also incurred approximately $15.3 million in offering expenses, including underwriting fees, related to the
issuance of the Senior Notes. Together, the discount, underwriting fees and offering expenses will be amortized over the
respective terms of the Senior Notes using the effective interest method. During fiscal 2022 and 2021, the Company recognized
interest expense of $55.3 million and $2.5 million, respectively, related to the Senior Notes using an effective interest rate on
the 2032 Notes of 3.28%, and an effective interest rate on the 2052 Notes of 4.18%.
The carrying values of the Senior Notes were as follows for the fiscal years presented (in thousands):
Fiscal 2022
Fiscal 2021
2032 Notes
2052 Notes
Total
2032 Notes
2052 Notes
Total
Principal
$
750,000 $ 750,000 $ 1,500,000 $
750,000 $
750,000
$ 1,500,000
Discounts and issuance costs
(7,572)
(10,092)
(17,664)
(8,288)
(10,269)
(18,557)
Carrying amount
$
742,428 $ 739,908 $ 1,482,336 $
741,712 $
739,731
$ 1,481,443
59
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Redemption
The Company may redeem the Senior Notes, at its option, in whole or in part, at any time and from time-to-time prior to (i) in
the case of the 2032 Notes, October 15, 2031 (the date that is three months before the maturity date of the 2032 Notes), and (ii)
in the case of the 2052 Notes, July 15, 2051 (the date that is six months before the maturity date of the 2052 Notes) (the
applicable date with respect to each such series of Senior Notes, the “Applicable Par Call Date”), in each case, at a “make-
whole” price described in the Supplemental Indenture plus accrued and unpaid interest to, but excluding, the redemption date.
In addition, on or after the Applicable Par Call Date, the Company may redeem either series of the Senior Notes, at its option,
in whole or in part, at any time and from time-to-time, at a redemption price equal to 100% of the principal amount of the
Senior Notes of such series to be redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date.
Change in Control
In the event of certain change of control triggering events with respect to the Senior Notes of either series (subject to certain
exceptions), the Company will be required to make an offer to each holder of the applicable Notes of such series to repurchase
all or part of its Senior Notes of such series at a purchase price in cash equal to 101% of the principal amount of such Senior
Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of purchase.
Covenants
The Indenture contains certain covenants that, among other things, restrict the Company’s and certain of its subsidiaries’ ability
to incur certain indebtedness secured by liens on certain assets and limit the ability of the Company to make certain
fundamental changes, in each case subject to a number of exceptions and qualifications described in the Indenture. The
Indenture also provides for customary events of default which, if any of them occur, would permit or require the principal of
and accrued interest on the Senior Notes to become or to be declared due and payable, as applicable. The Company was in
compliance with its covenants at January 28, 2023.
10. Convertible Senior Notes
Overview
In April 2020, the Company closed on an aggregate $575.0 million of 3.25% Convertible Senior Notes due 2025, including the
exercise of the full $75.0 million over-allotment option, receiving proceeds of $557.6 million, net of $17.4 million of
transaction fees and other third-party offering expenses. The Convertible Senior Notes accrue interest at a rate of 3.25% per
annum, payable semi-annually in arrears on April 15 and October 15 and mature on April 15, 2025, unless earlier repurchased,
redeemed or converted.
The Convertible Senior Notes are the Company’s unsecured, unsubordinated obligations and are equal in right of payment with
the Company’s existing and future unsecured, unsubordinated indebtedness; senior in right of payment to the Company’s
existing and future indebtedness that is expressly subordinated in right of payment to the Convertible Senior Notes; effectively
subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that
indebtedness; and structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables,
and preferred equity, if any, of the Company’s subsidiaries.
Conversion Terms
Upon issuance of the Convertible Senior Notes in April 2020, the initial conversion rate was 28.2618 shares of the Company’s
common stock per $1,000 principal amount of Convertible Senior Notes, which represented an initial conversion price of
approximately $35.38 per share. The conversion rate is subject to customary adjustments upon the occurrence of certain events,
such as the payment of dividends. In addition, upon the occurrence of a fundamental change prior to the maturity of the
Convertible Senior Notes, the Company will, in certain circumstances, increase the conversion rate by a specified number of
additional shares for a holder that elects to convert the Convertible Senior Notes in connection with such a fundamental change.
As of January 28, 2023, the conversion rate for the Convertible Senior Notes was 31.0915, which represents a conversion price
of $32.16 per share. The difference between the initial conversion rate and the conversion rate as of January 28, 2023 is due to
dividends that have been declared and paid on shares of the Company’s common stock following the issuance of the
Convertible Senior Notes.
60
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Upon conversion, the Company may settle the Convertible Senior Notes for cash, shares of the Company’s stock, or a
combination thereof, at the Company’s option.
Convertible Note Hedge and Warrant Transactions
In connection with the sale of the Convertible Senior Notes, the Company purchased a bond hedge designed to offset the
potential dilution to stockholders from the conversion of the Convertible Senior Notes. The cost of the bond hedge was partially
offset by the Company’s sale of warrants to acquire shares of the Company’s common stock. The bond hedge and warrants both
contained approximate five-year terms from issuance. The warrants were initially exercisable at a price of $52.42 per share and
are subject to customary adjustments upon the occurrence of certain events, such as the payment of dividends. As of January
28, 2023, the warrants were exercisable at a price of $47.65 per share. The difference between the initial and current exercise
price is due to dividends that have been declared and paid on shares of the Company’s common stock following the issuance of
the warrants.
The bond hedge and warrant transactions effectively increased the conversion price associated with the Convertible Senior
Notes during the term of these transactions from 35% to 100% at their issuance, thereby reducing the dilutive economic effect
to stockholders upon actual conversion. There is dilution from the conversion of the Convertible Senior Notes to the extent that
the then-market price per share of the common stock exceeds the exercise price of the warrants at the time of conversion.
The bond hedges and warrants are indexed to, and potentially settled in shares of, the Company’s common stock. The net cost
of $55.8 million for the purchase of the bond hedges and sale of the warrants was recorded during fiscal 2020 as a reduction to
additional paid-in capital in the Consolidated Balance Sheets.
Convertible Senior Notes Exchanges
During fiscal 2022, the Company entered into agreements with certain holders of the Convertible Senior Notes to exchange
$515.9 million in aggregate principal amount of the Convertible Senior Notes for a combination of cash and shares of the
Company’s common stock. The payments included all accrued and unpaid interest on the amounts exchanged. Concurrently
with each of the exchange transactions during fiscal 2022, the Company entered into agreements with certain counterparties to
terminate a proportionate amount of the convertible bond hedge and warrant agreements that were entered into by the Company
in April 2020 in connection with the issuance of the Convertible Senior Notes (collectively, the “Notes Exchanges”).
In connection with the Notes Exchanges, the Company recognized pre-tax non-cash inducement charges of $23.3 million
during fiscal 2022, which were recorded within interest expense on the Consolidated Statement of Income, paid a total of
$515.9 million to noteholders to redeem the principal amount of the Convertible Senior Notes with a carrying value of
$507.0 million, and issued 9.8 million shares of the Company's common stock to terminate the proportionate amount of the
warrants. Following the Notes Exchanges, $59.1 million aggregate principal amount of the Convertible Senior Notes remain
outstanding and 1.8 million shares underlie the outstanding Convertible Senior Notes, the convertible bond hedge and the
warrants at January 28, 2023. Because the closing price of the Company’s common stock of $126.23 at the end of fiscal 2022
exceeded the conversion price of $32.16, the remaining if-converted value exceeded the principal amount of the Convertible
Senior Notes by approximately $173.0 million at January 28, 2023.
Early Redemption
The Company may redeem the Convertible Senior Notes at its option at any time on or after April 17, 2023 at a cash
redemption price equal to the principal amount of the Convertible Senior Notes to be redeemed, plus accrued and unpaid
interest, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price
on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and
including, the trading day immediately before the date the Company sends the related redemption notice and (ii) the trading day
immediately before the date the Company sends such notice. In addition, calling any Convertible Senior Note for redemption
will constitute a make-whole fundamental change with respect to that Convertible Senior Note, in which case the conversion
rate applicable to the conversion of that Convertible Senior Note will be increased in certain circumstances if it is converted
after it is called for redemption. Refer to Note 16 – Subsequent Events for details surrounding the Company’s notice to call the
remaining $59.1 million aggregate principal amount of its Convertible Senior Notes for redemption on April 18, 2023.
61
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Financial Statement Impacts
As discussed in Note 1 – Basis of Presentation and Summary of Significant Accounting Policies, following the adoption of
ASU 2020-06, the Convertible Senior Notes are recorded entirely as a liability.
A summary of the composition of the net carrying value of the Convertible Senior Notes is as follows (in thousands):
Principal
Debt discount and issuance fees
Carrying amount
Equity component (*)
$
$
2022
2021
59,127 $
(856)
58,271 $
N/A $
575,000
(125,713)
449,287
160,693
(*) Included in additional paid-in capital on the Consolidated Balance Sheet as of January 29, 2022.
During fiscal 2022, the Company recognized $36.6 million of interest expense related to the Convertible Senior Notes. Interest
expense related to the Convertible Senior Notes included the aforementioned inducement charges and $2.0 million of non-cash
amortization of issuance fees. During fiscal 2021, the Company recognized $49.5 million of interest expense related to the
Convertible Senior Notes, of which $30.8 million was attributed to non-cash amortization of the debt discount and issuance
fees.
11. Fair Value Measurements
ASC 820, “Fair Value Measurement and Disclosures”, outlines a valuation framework and creates a fair value hierarchy for
assets and liabilities as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop
its own assumptions.
Recurring
The Company records in its Consolidated Balance Sheets deferred compensation plan assets held in trust at fair value on a
recurring basis using Level 1 inputs. Such assets consist of investments in various mutual funds made by eligible individuals as
part of the Company’s deferred compensation plans, as discussed in Note 15 – Retirement Savings Plans. As of January 28,
2023 and January 29, 2022, the fair value of the Company’s deferred compensation plans was $133.5 million and
$150.8 million, respectively.
The Company discloses the fair value of its Senior Notes and Convertible Senior Notes using Level 2 inputs which are based on
quoted prices for similar or identical instruments in inactive markets, as follows (in thousands):
2032 Notes
2052 Notes
Convertible Senior Notes
January 28, 2023
January 29, 2022
Carrying Value
Fair Value
Carrying Value
Fair Value
$
$
$
742,428 $
613,403 $
741,712 $
739,908 $
525,120 $
739,731 $
733,147
711,300
58,271 $
232,488 $
449,287 $
2,016,284
Prior to the adoption of ASU 2020-06, the carrying value of the Convertible Senior Notes excluded amounts classified within
additional paid-in capital and any unamortized discounts as of January 29, 2022. Refer to Note 1 – Basis of Presentation and
Summary of Significant Accounting Policies for further information.
Due to the short-term nature of the following instruments, the fair values of cash and cash equivalents, accounts receivable,
accounts payable and certain other liabilities approximated their carrying values at both January 28, 2023 and January 29, 2022.
62
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Nonrecurring
Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis may include property and equipment,
operating lease assets, goodwill and other intangible assets, equity and other assets. These assets are required to be assessed for
impairment when events or circumstances indicate that the carrying value may not be recoverable, and at least annually for
goodwill and indefinite-lived intangible assets. In the event that an impairment is required, the asset is adjusted to fair value,
using Level 3 inputs.
During the fourth quarter of 2022, the Company decided to exit the Field & Stream brand (the “Field & Stream Exit”). As a
result, we plan to convert the existing 17 Field & Stream stores to DICK’S House of Sport stores, expanded DICK’S Sporting
Goods stores, or other specialty concept stores. We closed twelve of these stores for conversion during the fourth quarter of
2022 and incurred pre-tax charges totaling $30.1 million, which included $28.5 million of non-cash impairment of store assets,
$0.8 million of severance and a $0.7 million inventory write-down. The $28.5 million non-cash impairment of store assets is
reflected within selling, general and administrative expenses on the Consolidated Statement of Net Income and within
depreciation and amortization on the Consolidated Statement of Cash Flows.
In connection with the Field & Stream Exit, the Company determined its Field & Stream trademark met held-for-sale criteria as
of January 28, 2023 and reclassified the $24.0 million carrying amount to prepaid expenses and other current assets on the
Consolidated Balance Sheet. The Field & Stream trademark was sold in March 2023 for proceeds near its carrying value.
12. Stockholders' Equity
Common Stock, Class B Common Stock and Preferred Stock
The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of 200,000,000 shares of common
stock, par value $0.01 per share, and the issuance of 40,000,000 shares of Class B common stock, par value $0.01 per share. In
addition, the Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares
of preferred stock.
Holders of common stock generally have rights identical to holders of Class B common stock, except that holders of common
stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share. A related party,
relatives of the related party and their trusts hold all outstanding Class B common stock, which can only be held by members of
this group. Class B common shares are not publicly tradable. Each share of Class B common stock can be converted at any time
into one share of common stock at the holder’s option.
Dividends per Common Share
The Company declared aggregate cash dividends of $1.95, $7.10 and $1.25 per share of common stock and Class B common
stock during fiscal 2022, 2021 and 2020, respectively, which resulted in cash payments for dividends of $163.1 million,
$603.0 million and $107.4 million, respectively. Fiscal 2021 included a special dividend of $5.50 per share on the Company’s
common stock and Class B common stock declared in August 2021.
Treasury Stock
As of January 30, 2021, the Company had approximately $1.031 billion collectively remaining under two five-year $1.0 billion
share repurchase programs originally authorized by its Board of Directors on March 16, 2016 and June 12, 2019, respectively,
both of which were fully exhausted during fiscal 2021. On December 16, 2021, the Company’s Board of Directors authorized
an additional five-year share repurchase program of up to $2.0 billion of its common stock, which the Company may suspend or
discontinue at any time.
63
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Total shares repurchased and amounts paid under the Company’s current and prior authorizations during the last three fiscal
years are presented below (in thousands):
Shares of common stock repurchased
2022
Fiscal Year
2021 (1)
2020
4,971
10,788
Treasury stock acquired during the fiscal year
$
426,723 $
1,176,366 $
—
—
(1) Fiscal 2021 included $31.7 million of cash settlements for 0.3 million shares of treasury stock that were paid in the first week of fiscal
2022.
As of January 28, 2023, the Company had $1.428 billion remaining under the December 2021 authorization.
13. Income Taxes
Provision for Income Taxes
The components of the provision for income taxes are as follows for the fiscal years presented (in thousands):
Current:
Federal
State
Total current provision
Deferred:
Federal
State
Total deferred provision
Total provision
2022
2021
2020
$
$
253,776 $
63,734
317,510
364,997 $
93,119
458,116
185,197
42,537
227,734
15,074
8,026
23,100
340,610 $
15,992
459
16,451
474,567 $
(37,376)
(8,874)
(46,250)
181,484
The Company’s effective income tax rate differs from the federal statutory rate as follows for the fiscal years presented:
Federal statutory rate
State tax, net of federal benefit
Excess tax (benefit) expense related to stock-based compensation
Eliminated bond hedge deduction following Convertible Senior Notes exchanges
Other permanent items
Effective income tax rate
2022
2021
2020
21.0 %
4.1 %
(1.9) %
1.6 %
(0.2) %
24.6 %
21.0 %
4.0 %
(1.2) %
— %
— %
21.0 %
3.6 %
0.6 %
— %
0.3 %
23.8 %
25.5 %
64
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Components of deferred tax assets (liabilities) consist of the following as of the end of the fiscal years presented (in thousands):
Operating lease liabilities
Inventory
Employee benefits and withholdings
Stock-based compensation
Gift cards
Deferred revenue currently taxable
Other accrued expenses not currently deductible for tax purposes
Net operating loss carryforward
Non income-based tax reserves
Uncertain income tax positions
Insurance
Convertible Senior Notes
Other
Total deferred tax assets
Operating lease assets
Property and equipment
Inventory valuation
Intangibles
Prepaid expenses
Other
Total deferred tax liabilities
Net deferred tax asset
2022
2021
$
689,319 $
45,612
47,351
15,739
20,500
495
15,660
166
5,228
526
3,275
3,537
1,616
849,024
(553,138)
(214,654)
(31,011)
(5,648)
(3,384)
—
(807,835)
41,189 $
$
683,205
32,901
54,610
16,810
16,448
1,398
14,655
332
6,089
511
2,194
1,396
1,621
832,170
(530,700)
(230,198)
(23,401)
(8,475)
(2,992)
(1,380)
(797,146)
35,024
The deferred tax asset from net operating loss carryforwards of $0.2 million represents state net operating losses, which expire
in 2034. The net deferred tax asset balances at January 28, 2023 and January 29, 2022 were included within long-term assets on
the Consolidated Balance Sheets.
Under the Tax Cuts and Jobs Act of 2017, a one-time transition tax resulted in the elimination of the excess of the amount of
financial reporting basis over the tax basis in the foreign subsidiaries and subjected $66.6 million of undistributed foreign
earnings to tax. No additional income taxes have been provided for any remaining undistributed foreign earnings or foreign
withholdings and US state taxes not subject to the one-time transition tax, as the Company intends to permanently reinvest the
earnings from foreign subsidiaries outside the United States.
Unrecognized Tax Benefits
The following table provides a reconciliation of the Company’s total balance of unrecognized tax benefits, excluding interest
and penalties (in thousands):
Beginning of fiscal year
Increases as a result of tax positions taken in a prior period
Decreases as a result of tax positions taken in a prior period
Decreases as a result of settlements during the current period
Reductions as a result of a lapse of statute of limitations during the
current period
End of fiscal year
2022
2021
2020
$
1,058 $
1,058 $
2,786
6
—
193
—
35
—
(6)
(193)
(1,380)
—
—
$
1,058 $
1,058 $
(383)
1,058
65
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The balance at January 28, 2023 includes $0.8 million of unrecognized tax benefits that would impact our effective tax rate if
recognized. The Company recognizes accrued interest and penalties from unrecognized tax benefits in income tax expense.
As of January 28, 2023, the Company’s total liability for uncertain tax positions, including $1.4 million for interest and
penalties, was approximately $2.5 million. During each of fiscal 2022, 2021 and 2020, the Company recorded $0.1 million for
the accrual of interest and penalties in the Consolidated Statements of Income. The Company does not anticipate that changes in
its unrecognized tax benefits will have a material impact on the Consolidated Statements of Income during fiscal 2023.
Audits
The Company participates in the Internal Revenue Service (“IRS”) Compliance Assurance Program (“CAP”). As part of CAP,
tax years are audited on a contemporaneous basis so that all or most issues are resolved prior to the filing of the tax return. The
IRS has completed examinations of 2019 and all prior tax years. For tax years 2020 and 2021, the Company was accepted into
the CAP Bridge phase during which it is not the intent of the IRS to examine the tax return. Acceptance into the Bridge phase is
based on a taxpayers low risk of noncompliance and having few, if any, material issues. For tax year 2022, the Company was
accepted into the CAP Compliance Maintenance phase during which the IRS will evaluate the necessary level of review based
on complexity and other factors. The Company is no longer subject to examination in any of its major state jurisdictions for
years prior to 2017.
Recent U.S. Tax Legislation
On March 27, 2020, the United States Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES
Act”), which among other things, promulgated various income tax provisions, including but not limited to, modifications for net
operating losses, an accelerated time frame for refunds associated with prior minimum taxes and modifications of the limitation
on business interest. The CARES Act also provided for refundable employee retention tax credits for wages paid to employees
who are unable to work during the COVID-19 pandemic and the deferral of the employer-paid portion of social security taxes.
Through fiscal 2020, employee retention tax credits provided under the CARES Act reduced the Company’s operating expenses
by approximately $17.4 million, substantially all of which related to wages and benefits the Company paid to teammates during
the period of its temporary store closures earlier in the fiscal year. In addition, the Company deferred qualifying payroll and
other tax payments of approximately $53.2 million in fiscal 2020 as permitted by the CARES Act, of which $26.4 million was
paid in fiscal 2021 and the remainder paid in fiscal 2022.
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 that includes, among other provisions,
changes to the U.S. corporate income tax system, including implementing a 15% minimum tax on adjusted financial statement
income for certain large corporations, a 1% excise tax on net stock repurchases after December 31, 2022 and tax incentives to
promote alternative sources of energy. We do not expect the Inflation Reduction Act to have a material impact on our financial
results, including on our annual estimated effective tax rate or on our liquidity.
14. Stock-Based Compensation
The Company has the ability to grant restricted and performance-based restricted stock, including shares and units, and options
to purchase common stock under the 2012 Plan, under which 7,673,736 shares of common stock were available for future
issuance at the end of fiscal 2022. The following table provides total stock-based compensation recognized in the Consolidated
Statements of Income for the fiscal years presented (in thousands):
Restricted stock expense
Performance-based restricted stock expense
Stock option expense
Total stock-based compensation expense
Total related tax benefit
Restricted Stock
2022
2021
2020
$
36,261 $
32,103 $
34,423
10,585
3,757
15,359
5,338
$
$
50,603 $
52,800 $
9,730 $
9,927 $
9,568
6,186
50,177
10,443
The Company issues shares of restricted stock to eligible employees, which are subject to forfeiture until the end of the
applicable vesting period. Restricted stock awards generally vest on the third anniversary of the date of grant, subject to the
employee’s continuing employment as of that date. The fair value of restricted stock is determined on the date of grant using the
Company’s stock price.
66
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Restricted stock activity for fiscal 2022 is presented in the following table:
Nonvested, January 29, 2022
Granted
Vested
Forfeited
Restricted Stock
Weighted
Average Grant
Date Fair Value
Intrinsic
Value
(in millions)
Shares
3,341,335 $
32.63 $
378.2
472,413
(639,181)
(258,644)
104.07
38.01
38.86
Nonvested, January 28, 2023
2,915,923 $
42.47 $
368.1
As of January 28, 2023, total unrecognized compensation expense, net of estimated forfeitures, from nonvested shares of
restricted stock was approximately $47.1 million, which the Company expects to recognize over a weighted average period of
approximately 0.67 years.
Performance-based Restricted Stock
The Company issues performance-based restricted stock to eligible employees in support of the Company’s strategic initiatives.
Performance-based restricted stock, including shares and units, generally vest on the third anniversary of the date of grant and
are subject to the employees’ continued employment as of that date. Additionally, the number of awards vesting depends upon
the achievement of certain performance criteria for the fiscal year in which they are granted, which can result in a payout range
of 0% to 200% of the original award amount. The fair value of performance-based restricted stock is based on the Company’s
stock price on the date of grant. Awards issued during fiscal 2022 assumed target, or 100%, attainment of the shares or units,
consistent with the actual attainment for awards.
Performance-based restricted stock activity for fiscal 2022 is presented in the following table:
Performance-based Restricted Stock
Shares/Units
Weighted
Average Grant
Date Fair Value
Intrinsic Value
(in millions)
Nonvested, January 29, 2022
893,072 $
47.63 $
101.1
Granted
Vested (1)
Forfeited
118,362
(645,360)
(25,007)
101.32
35.49
84.31
Nonvested, January 28, 2023
341,067 $
86.54 $
43.1
(1) Performance-based restricted shares under the 2019 Long-Term Incentive Plan vested in April 2022 at maximum attainment of the performance measures.
As of January 28, 2023, total unrecognized compensation expense, net of estimated forfeitures, from nonvested shares of
performance-based restricted stock was approximately $13.7 million, which the Company expects to recognize over a weighted
average period of approximately 1.51 years.
Stock Options
Historically, the Company has granted stock options to certain teammates, which vested 25% per year over four years and had a
seven-year contractual life. When options are exercised, the Company issues new shares of common stock.
67
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The fair value of stock options is measured on their grant date and is recognized as expense, net of estimated forfeitures, on a
straight-line basis over the requisite service period using the Black-Scholes option valuation model. The Company did not grant
any stock options during fiscal 2022. The following weighted-average assumptions were used in the Black-Scholes option
valuation model for awards granted during fiscal 2021 and 2020 as presented:
Exercise price
Expected term (years)
Expected volatility
Risk-free interest rate
Expected dividend yield
Weighted average grant date fair value
2021
2020
72.40
4.80
47.97 %
0.73%
2.00%
25.20
$
$
17.80
5.56
41.31 %
0.78%
6.27%
3.70
$
$
The risk-free interest rate is determined by using the U.S. Treasury constant maturity interest rate with a term consistent with
the expected life of the option, which represents the estimated period of time until exercise and is based on historical experience
of similar awards giving consideration to the contractual terms, vesting schedules and expectations of future employee
behavior. The expected dividend yield and volatility are based on historical stock prices and dividend amounts over preceding
periods equal in length to the expected life of the options. The Company applies an estimated forfeiture rate that is calculated
based on historical activity. The assumptions used to calculate an option’s fair value are evaluated and revised, as necessary, to
reflect market conditions and the Company’s experience.
Fiscal 2022 stock option activity is presented in the following table:
Outstanding, January 29, 2022
Exercised
Forfeited / Expired
Outstanding, January 28, 2023
Exercisable, January 28, 2023
Vested or expected to vest, January 28, 2023
Shares
Subject to
Options
3,674,772 $
(860,269)
(103,022)
2,711,481 $
1,485,507 $
2,665,687 $
Weighted
Average
Exercise
Price per
Share
Weighted
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic
Value (in
millions)
21.78
28.27
15.47
19.96
24.53
20.02
4.21 $
335.9
3.46 $
2.94 $
3.44 $
288.1
151.1
283.1
At January 28, 2023, unrecognized compensation expense related to outstanding stock options that have not yet vested was
approximately $2.4 million, net of estimated forfeitures. Compensation expense related to these options is expected to be
recognized over a weighted average period of approximately 1.1 years.
The following table presents stock option information for the last three fiscal years (in millions):
Total intrinsic value of stock options exercised
Income tax benefit (expense) from the exercise of stock options
Total fair value of stock options vested
2022
2021
2020
$
$
$
71.4 $
11.6 $
4.9 $
37.1 $
6.8 $
6.3 $
8.3
(0.6)
6.1
68
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
15. Retirement Savings Plans
The Company’s retirement plan, established pursuant to Section 401(k) of the Internal Revenue Code, covers all active
employees over the age of 18 following one month of service with the Company. Effective January 1, 2022, the Company
amended and restated its retirement savings plan and elected a Safe Harbor 401(k) plan design. The Company’s matching
contributions under the Safe Harbor 401(k) plan are made bi-weekly, vest immediately and are equal to 100% of each eligible
participant’s tax-deferred contributions up to 4% of the participant’s compensation plus 50% of the eligible participant’s tax-
deferred contributions up to the next 2% of compensation. Under the previous 401(k) plan, the Company made an annual
discretionary matching contribution equal to a percentage of each participant’s contribution, which vested over a period of three
years, up to 10% of the participant’s compensation. The Company’s discretionary matching contribution under the previous
401(k) plan was 75% during fiscal 2021 and fiscal 2020. Total employer contributions recorded under the plans, net of
forfeitures, were $31.6 million, $24.1 million and $17.1 million in fiscal 2022, 2021 and 2020, respectively.
The Company also has non-qualified deferred compensation plans for highly compensated employees whose contributions were
limited under the qualified defined contribution plans. Amounts contributed and deferred under the deferred compensation
plans are credited or charged with the performance of investment options offered under the plans and elected by the
participants. In the event of bankruptcy, the assets of these plans are available to satisfy the claims of general creditors. The
liability for compensation deferred under the Company’s plans was $133.5 million and $150.8 million as of January 28, 2023
and January 29, 2022, respectively, and is included within long-term liabilities on the Consolidated Balance Sheets. Total
employer contributions recorded under these plans, net of forfeitures, was $1.8 million, $6.2 million and $5.8 million in fiscal
2022, 2021 and 2020, respectively. Following the Company’s change to the Safe Harbor 401(k) plan on January 1, 2022, the
Company eliminated future deferrals for one of its non-qualified plans, which affected fiscal 2022 employer contributions.
16. Subsequent Events
On March 6, 2023, the Company’s Board of Directors declared a quarterly cash dividend in the amount of $1.00 per share on
the Company’s common stock and Class B common stock payable on March 31, 2023 to stockholders of record as of the close
of business on March 17, 2023.
On February 9, 2023, the Company issued a notice to call the remaining $59.1 million aggregate principal amount of its
Convertible Senior Notes for redemption on April 18, 2023 in shares. In connection with the call notice, the Company
announced its intention to unwind the remaining portions of the convertible bond hedge and warrants and expects the applicable
portion to be delivered to the Company in shares of its common stock. The Company intends to offset the dilutive impact of
anticipated conversions of the Convertible Senior Notes through the shares received from the convertible bond hedge and
shares repurchased by the Company during 2023. See additional details within the Current Report on Form 8-K, filed with the
Securities and Exchange Commission on February 9, 2023.
ITEM 16. FORM 10-K SUMMARY
Not applicable.
69
Index to Exhibits
Exhibit Number
3.1
Description
Amended and Restated Certificate of Incorporation
3.2
3.3
3.4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
10.1
10.2
10.3
Method of Filing
Incorporated by reference to Exhibit 3.1 to the
Registrant’s Registration Statement on Form S-8,
File No. 333-100656, filed on October 21, 2002
Incorporated by reference to Exhibit 3.1 to the
Registrant’s Form 10-Q, File No. 001-31463, filed
on September 9, 2004
Amendment to the Amended and Restated
Certificate of Incorporation, effective as of
June 10, 2004
Amendment to the Amended and Restated
Certificate of Incorporation, dated as of June 9,
2021
Incorporated by reference to Exhibit 3.1 to the
Registrant’s Form 8-K, File No. 001-31463, filed
June 14, 2021
Amended and Restated Bylaws (adopted June 6,
2012)
Form of Stock Certificate
Incorporated by reference to Exhibit 3.1 to the
Registrant’s Current Report on Form 8-K, File
No. 001-31463, filed on June 11, 2012
Incorporated by reference to Exhibit 4.1 to the
Registrant’s Amendment No. 3 to Statement on
Form S-1, File No. 333-96587, filed on September
27, 2002
Description of Registrant’s Securities Registered
Pursuant to Section 12 of the Securities Exchange
Act of 1934
Incorporated by reference to Exhibit 4.2 to
Registrant’s Form 10-K, File No. 001-31463, filed
on March 24, 2021
Indenture, dated as of April 17, 2020, between
DICK'S Sporting Goods, Inc. and U.S. Bank
National Association, as Trustee
Incorporated by reference to Exhibit 4.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on April 23, 2020
Form of Certificate representing the 3.25%
Convertible Senior Notes due 2025 (included as
Exhibit A to Indenture in Exhibit 4.3)
Incorporated by reference to Exhibit 4.2 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on April 23, 2020
Indenture, dated as of January 14, 2022, between
DICK’S Sporting Goods, Inc. and U.S. Bank
National Association, as Trustee
Incorporated by reference to Exhibit 4.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on January 14, 2022
First Supplemental Indenture, dated as of January
14, 2022, between DICK’S Sporting Goods, Inc.
and U.S. Bank National Association, as Trustee
Incorporated by reference to Exhibit 4.2 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on January 14, 2022
Form of 3.150% Senior Notes due 2032 (included
as Exhibit A to First Supplemental Indenture in
Exhibit 4.6)
Incorporated by reference to Exhibit 4.3 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on January 14, 2022
Form of 4.100% Senior Notes due 2052 (included
as Exhibit B to First Supplemental Indenture in
Exhibit 4.6)
Incorporated by reference to Exhibit 4.4 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on January 14, 2022
Amended and Restated Lease Agreement,
originally dated February 4, 1999, for distribution
center located in Smithton, Pennsylvania, effective
as of May 5, 2004, between Lippman &
Lippman, L.P., Martin and Donnabeth Lippman
and Registrant
Amended and Restated Lease Agreement originally
dated August 31, 1999, for distribution center
located in Plainfield, Indiana, effective as of
November 30, 2005, between CP Gal
Plainfield, LLC and Registrant
Lease Agreement originally dated June 25, 2007,
for distribution center located in East Point,
Georgia, between Duke Realty Limited Partnership
and Registrant, as amended, supplemented or
modified as of January 19, 2012
Incorporated by reference to Exhibit 10.5 to the
Registrant’s Form 10-Q, File No. 001-31463, filed
on September 9, 2004
Incorporated by reference to Exhibit 10.22 to
Registrant’s Form 10-K, File No. 001-31463, filed
on March 23, 2006
Incorporated by reference to Exhibit 10.31 to the
Registrant’s Annual Report on Form 10-K, File
No. 001-31463, filed on March 16, 2012
Each management contract and compensatory plan has been marked with an asterisk (*).
70
Exhibit Number
10.4*
Description
Form of Agreement entered into between
Registrant and various executive officers, which
sets forth form of severance
Registrant’s Amended and Restated Officers’
Supplemental Savings Plan, dated December 12,
2007
Method of Filing
Incorporated by reference to Exhibit 10.10 to the
Registrant’s Amendment No. 1 to Statement on
Form S-1, File No. 333-96587, filed on August 27,
2002
Incorporated by reference to Exhibit 10.35 to the
Registrant’s Form 10-K, File No. 001-31463, filed
on March 27, 2008
10.5*
10.5a*
10.5b*
10.5c*
10.6*
10.6a*
10.6b*
10.6c*
10.6d*
10.6e*
10.6f*
10.6g*
10.6h*
10.6i*
10.6j*
First Amendment to Registrant’s Amended and
Restated Officers’ Supplemental Savings Plan,
dated March 27, 2008
Incorporated by reference to Exhibit 10.36 to the
Registrant’s Form 10-K, File No. 001-31463, filed
on March 27, 2008
Second Amendment to Registrant’s Amended and
Restated Officers’ Supplemental Savings Plan,
dated as of December 4, 2008
Incorporated by reference to Exhibit 10.46 to the
Registrant’s Form 10-K, File No. 001-31463, filed
on March 20, 2009
Third Amendment to Registrant’s Amended and
Restated Officers’ Supplemental Savings Plan,
dated as of November 21, 2011
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Form 10-Q, File No. 001-31463, filed
on August 30, 2018
Registrant’s Amended and Restated 2012 Stock
and Incentive Plan
Form of Restricted Stock Award Agreement
granted under Registrant’s 2012 Stock and
Incentive Plan for awards granted before March 14,
2017
Amended and Restated Form of Restricted Stock
Award Agreement granted under Registrant’s 2012
Stock and Incentive Plan for awards granted on or
after March 14, 2017
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File
No. 001-31463, filed on June 14, 2021
Incorporated by reference to Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K, File
No. 001-31463, filed on June 11, 2012
Incorporated by reference to Exhibit 10.4 to the
Registrant’s Quarterly Report on Form 10-Q, File
No. 001-31463, filed on May 25, 2017
Form of Stock Option Award Agreement granted
under Registrant’s 2012 Stock and Incentive Plan
for awards granted before March 14, 2017
Incorporated by reference to Exhibit 10.3 to the
Registrant’s Current Report on Form 8-K, File
No. 001-31463, filed on June 11, 2012
Amended and Restated Form of Stock Option
Award Agreement granted under Registrant’s 2012
Stock and Incentive Plan for awards granted on or
after March 14, 2017
Incorporated by reference to Exhibit 10.3 to the
Registrant’s Quarterly Report on Form 10-Q, File
No. 001-31463, filed on May 25, 2017
Form of 2019 Long-Term Performance-Based
Restricted Stock Award Agreement granted under
the Registrant’s 2012 Stock and Incentive Plan
Incorporated by reference to Exhibit 99.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on June 13, 2019
Form of Performance-Based Restricted Stock
Award Agreement granted under the Registrant’s
2012 Stock and Incentive Plan
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Quarterly Report on Form 10-Q, File
No. 001-31463, filed on May 26, 2021
Form of Performance Unit Award Agreement
granted under the Registrant’s 2012 Stock and
Incentive Plan for awards granted before March 21,
2023
Amended and Restated Form of Performance Unit
Award Agreement granted under the Registrant’s
2012 Stock and Incentive Plan for awards granted
on or after March 21, 2023
Form of 2023 Long-Term Incentive Program
Performance Unit Award Agreement granted under
the Registrant’s 2012 Stock and Incentive Plan
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Quarterly Report on Form 10-Q, File
No. 001-31463, filed on May 25, 2022
Filed herewith
Filed herewith
Form of Restricted Unit Award Agreement under
the Registrant’s 2012 Stock and Incentive Plan
Filed herewith
Each management contract and compensatory plan has been marked with an asterisk (*).
71
Exhibit Number
10.6k*
10.6l*
10.7*
10.8*
10.9*
10.10
10.11
10.12
Description
Method of Filing
Registrant’s Non-Employee Director
Compensation Deferral Plan
Registrant’s Non-Employee Director
Compensation Deferral Plan - Deferral Election
Form
Consulting Agreement between the Company and
Lee Belitsky, EVP
Separation Agreement between Company and Don
Germano, EVP Stores & Supply Chain
Filed herewith
Filed herewith
Incorporated by reference to Exhibit 10.11 to the
Registrant’s Current Report on the Form 10-K, File
No. 001-31463, filed on March 23, 2022
Incorporated by reference to Exhibit 10.7 to the
Registrant’s Current Report on the Form 10-Q, File
No. 001-31463, filed on November 23, 2022
Offer Letter between the Company and Raymond
A. Sliva, Jr., Executive Vice President - Stores
Filed herewith
Credit Agreement, dated as of January 14, 2022,
among DICK’S Sporting Goods, Inc., Wells Fargo
Bank, National Association, as administrative
agent and the lenders and other parties thereto
Form of Indemnification Agreement between the
Company and each Director
Form of Convertible Note Hedge Transactions
Confirmation
10.13
Form of Warrant Transactions Confirmation
Form of Note Hedge Early Termination
Agreement, dated as of April 5, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable call option counterparty
Form of Warrant Early Termination Agreement,
dated as of April 5, 2022, by and between DICK’S
Sporting Goods, Inc. and the applicable warrant
counterparty
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31643, filed on January 14, 2022
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on March 21, 2016
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on April 23, 2020
Incorporated by reference to Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on April 23, 2020
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on April 6, 2022
Incorporated by reference to Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on April 6, 2022
Form of Exchange Agreement, dated as of April 5,
2022, by and between DICK’S Sporting Goods,
Inc. and the applicable Noteholder
Incorporated by reference to Exhibit 10.3 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on April 6, 2022
Form of Note Hedge Early Termination
Agreement, dated as of June 23, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable call option counterparty
Form of Warrant Early Termination Agreement,
dated as of June 23, 2022, by and between DICK’S
Sporting Goods, Inc. and the applicable warrant
counterparty
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on June 24, 2022
Incorporated by reference to Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on June 24, 2022
Form of Exchange Agreement, dated as of June 23,
2022, by and between DICK’S Sporting Goods,
Inc. and the applicable Noteholder
Incorporated by reference to Exhibit 10.3 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on June 24, 2022
10.14
10.15
10.16
10.17
10.18
10.19
Each management contract and compensatory plan has been marked with an asterisk (*).
72
Exhibit Number
10.20
10.21
10.22
10.23
10.24
10.25
10.26
10.27
10.28
10.29
10.30
10.31
10.32
10.33
Description
Method of Filing
Form of Note Hedge Partial Early Termination
Agreement, dated as of July 8, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable call option counterparty
Form of Warrant Partial Early Termination
Agreement, dated as of July 8, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable warrant counterparty
Form of Note Hedge Early Termination
Agreement, dated as of July 8, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable call option counterparty
Form of Warrant Early Termination Agreement,
dated as of July 8, 2022, by and between DICK’S
Sporting Goods, Inc. and the applicable warrant
option counterparty
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on July 11, 2022
Incorporated by reference to Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on July 11, 2022
Incorporated by reference to Exhibit 10.3 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on July 11, 2022
Incorporated by reference to Exhibit 10.4 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on July 11, 2022
Form of Exchange Agreement, dated as of July 8,
2022, by and between DICK’S Sporting Goods,
Inc. and the applicable Noteholder
Incorporated by reference to Exhibit 10.5 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on July 11, 2022
Form of Note Hedge Partial Early Termination
Agreement, dated as of August 29, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable call option counterparty
Form of Warrant Partial Early Termination
Agreement, dated as of August 29, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable warrant counterparty
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on August 30, 2022
Incorporated by reference to Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on August 30, 2022
Form of Exchange Agreement, dated as of August
29, 2022, by and between DICK’S Sporting Goods,
Inc. and the applicable Noteholder
Incorporated by reference to Exhibit 10.3 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on August 30, 2022
Form of Note Hedge Partial Early Termination
Agreement, dated as of September 26, 2022, by
and between DICK’S Sporting Goods, Inc. and the
applicable call option counterparty
Form of Warrant Partial Early Termination
Agreement, dated as of September 26, 2022, by
and between DICK’S Sporting Goods, Inc. and the
applicable warrant counterparty
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on September 27, 2022
Incorporated by reference to Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on September 27, 2022
Form of Exchange Agreement, dated as of
September 26, 2022, by and between DICK’S
Sporting Goods, Inc. and the applicable Noteholder
Incorporated by reference to Exhibit 10.3 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on September 27, 2022
Form of Note Hedge Partial Early Termination
Agreement, dated as of December 7, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable call option counterparty
Form of Warrant Partial Early Termination
Agreement, dated as of December 7, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable warrant counterparty
Form of Note Hedge Early Termination
Agreement, dated as of December 7, 2022, by and
between DICK’S Sporting Goods, Inc. and the
applicable call option counterparty
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on December 8, 2022
Incorporated by reference to Exhibit 10.2 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on December 8, 2022
Incorporated by reference to Exhibit 10.3 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on December 8, 2022
Each management contract and compensatory plan has been marked with an asterisk (*).
73
Exhibit Number
10.34
Description
Method of Filing
Form of Warrant Early Termination Agreement,
dated as of December 7, 2022, by and between
DICK’S Sporting Goods, Inc. and the applicable
warrant option counterparty
Incorporated by reference to Exhibit 10.4 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on December 8, 2022
10.35
10.36
21
23.1
31.1
31.2
32.1
32.2
Form of Exchange Agreement, dated as of
December 7, 2022, by and between DICK’S
Sporting Goods, Inc. and the applicable Noteholder
Incorporated by reference to Exhibit 10.5 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on December 8, 2022
Form of Warrant Early Termination Agreement
dated as of March 2, 2023, by and between
DICK’S Sporting Goods, Inc. and the applicable
warrant option counterparty
Subsidiaries
Consent of Deloitte & Touche LLP
Certification of Lauren R. Hobart, President and
Chief Executive Officer, dated as of March 23,
2023 and made pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, as amended
Certification of Navdeep Gupta, Executive Vice
President – Chief Financial Officer, dated as of
March 23, 2023 and made pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934,
as amended
Certification of Lauren R. Hobart, President and
Chief Executive Officer, dated as of March 23,
2023 and made pursuant to Section 1350, Chapter
63 of Title 18, United States Code, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
Certification of Navdeep Gupta, Executive Vice
President – Chief Financial Officer, dated as of
March 23, 2023 and made pursuant to Section
1350, Chapter 63 of Title 18, United States Code,
as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
Incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K, File No.
001-31463, filed on March 8, 2023
Filed herewith
Filed herewith
Filed herewith
Filed herewith
Furnished herewith
Furnished herewith
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
104
XBRL Instance Document - The instance
document does not appear in the Interactive Data
File because its XBRL tags are embedded within
the Inline XBRL document.
Filed herewith
XBRL Taxonomy Extension Schema Document
Filed herewith
XBRL Taxonomy Calculation Linkbase Document
Filed herewith
XBRL Taxonomy Definition Linkbase Document
Filed herewith
XBRL Taxonomy Label Linkbase Document
XBRL Taxonomy Presentation Linkbase
Document
Cover Page Interactive Data File (formatted as
Inline XBRL with applicable taxonomy extension
information contained in Exhibits 101).
Filed herewith
Filed herewith
Filed herewith
Each management contract and compensatory plan has been marked with an asterisk (*).
Attached as Exhibits 101 to this report are the following financial statements from the Company’s Annual Report on Form 10-
K for the year ended January 28, 2023 formatted in XBRL (“eXtensible Business Reporting Language”): (i) the Consolidated
Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets,
(iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and
(vi) related notes to these Consolidated Financial Statements.
74
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
DICK’S SPORTING GOODS, INC.
(Registrant)
By: /s/ NAVDEEP GUPTA
Navdeep Gupta
Executive Vice President – Chief Financial Officer
Date: March 23, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934, the report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the date indicated.
SIGNATURE
/s/ LAUREN R. HOBART
Lauren R. Hobart
CAPACITY
President, Chief Executive Officer and Director
DATE
March 23, 2023
/s/ NAVDEEP GUPTA
Navdeep Gupta
Executive Vice President – Chief Financial Officer
(principal financial and principal accounting officer)
March 23, 2023
/s/ EDWARD W. STACK
Edward W. Stack
Executive Chairman and Director
March 23, 2023
March 23, 2023
March 23, 2023
March 23, 2023
March 23, 2023
March 23, 2023
March 23, 2023
March 23, 2023
March 23, 2023
March 23, 2023
/s/ MARK J. BARRENECHEA
Mark J. Barrenechea
Director
/s/ EMANUEL CHIRICO
Emanuel Chirico
Director
/s/ WILLIAM J. COLOMBO
William J. Colombo
Vice Chairman and Director
/s/ ANNE FINK
Anne Fink
Director
Director
/s/ LARRY FITZGERALD, JR.
Larry Fitzgerald, Jr.
/s/ SANDEEP MATHRANI
Sandeep Mathrani
/s/ DESIREE RALLS-MORRISON
Desiree Ralls-Morrison
Director
Director
/s/ LAWRENCE J. SCHORR
Lawrence J. Schorr
Director
/s/ LARRY D. STONE
Larry D. Stone
Director
75
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of DICK’S Sporting Goods, Inc.
Opinion on the Financial Statement Schedule
We have audited the consolidated financial statements of DICK’S Sporting Goods, Inc. and subsidiaries (the “Company”) as of
January 28, 2023 and January 29, 2022, and for each of the three years in the period ended January 28, 2023, and the
Company’s internal control over financial reporting as of January 28, 2023, and have issued our reports thereon dated
March 23, 2023; such consolidated financial statements and reports are included in this Annual Report on Form 10-K. Our
audits also included the financial statement schedule of the Company listed in the Index at Item 15. This financial statement
schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation
to the financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
March 23, 2023
76
DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Fiscal 2020
Inventory reserve
Allowance for credit losses
Reserve for sales returns
Fiscal 2021
Inventory reserve
Allowance for credit losses
Reserve for sales returns
Fiscal 2022
Inventory reserve
Allowance for credit losses
Reserve for sales returns
Balance at
Beginning of
Period
Charged to
Costs and
Expenses
Deductions
Balance at
End of Period
$
57,825
$
32,047
$
(54,317)
$
2,960
13,122
4,313
508,622
(4,612)
(507,276)
$
35,555
$
4,421
$
(14,410)
$
2,661
14,468
4,298
591,723
(3,752)
(589,784)
$
25,566
$
52,933
$
(26,323)
$
3,207
16,407
3,305
652,863
(3,649)
(650,249)
35,555
2,661
14,468
25,566
3,207
16,407
52,176
2,863
19,021
77
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures
In addition to reporting the Company's financial results in accordance with generally accepted accounting principles ("GAAP"),
the Company reports certain financial results that differ from what is reported under GAAP. These non-GAAP financial measures
include non-GAAP income before income taxes (percent of net sales), non-GAAP EBT margin, consolidated non-GAAP net
income, non-GAAP earnings per diluted share, non-GAAP diluted shares outstanding, non-GAAP gross profit margin, and
net capital expenditures, which management believes provides investors with useful supplemental information to evaluate
the Company’s ongoing operations and to compare with past and future periods. Furthermore, management believes that
adjustments related to the Convertible Senior Notes and convertible bond hedge provide a more complete view of the
economics of the instruments upon future conversion. Management also uses these non-GAAP measures internally for
forecasting, budgeting, and measuring its operating performance. These measures should be viewed as supplementing,
and not as an alternative or substitute for, the Company's financial results prepared in accordance with GAAP. The methods
used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other
companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be
comparable to similar measures provided by other companies. A reconciliation of the Company’s non-GAAP measures to the
most directly comparable GAAP financial measures are provided below and on the Company's website at investors.DICKS.com.
Earnings per diluted share vs. Non-GAAP earnings per diluted share:
Fiscal 2022
52 Weeks Ended January 28, 2023
Selling,
general and
administrative
expenses
Income
before
income
taxes
Gross profit
Net income
After tax
interest from
Convertible
Senior Notes
Numerator
used to
compute
earnings per
diluted share
Weighted
average
diluted
shares
Earnings
per diluted
share
GAAP Basis
$ 4,284,558 $ 2,805,462
$ 1,383,748 $ 1,043,138
$ 27,060
$ 1,070,198
99,274
$ 10.78
% of Net Sales
34.64%
22.68%
11.19%
8.43%
0.22%
8.65%
Convertible Senior
Notes
Field & Stream
exit charges
—
—
—
—
(27,060)
(27,060)
(10,792)
740
(29,340)
30,080
22,259
—
22,259
—
Non-GAAP Basis
$ 4,285,298 $ 2,776,122
$ 1,413,828 $ 1,065,397
$ —
$ 1,065,397
88,482
$ 12.04
% of Net Sales
34.65%
22.45%
11.43%
8.61%
—%
8.61%
Fiscal 2022 included adjustments to eliminate the impact of assumed share settlement of the convertible senior notes due 2025 (“Convertible
Senior Notes”) as required by the if-converted method. During fiscal 2022 the Company settled $515.9 million of its Convertible Senior Notes
without dilutive effect, as the related principal was settled in cash and due to the shares received from its convertible bond hedge. The Company
does not expect the shares underlying the remaining $59.1 million will have a dilutive effect upon conversion and believes reflecting the notes as
debt more closely represents the economics of the transaction upon future conversion. The Company also recorded pre-tax charges related to the
Field & Stream exit totaling $30.1 million, which included $28.5 million of non-cash impairments of store assets, $0.8 million of severance and a
$0.7 million inventory write-down related to the closure of 12 Field & Stream stores in the fourth quarter of fiscal 2022. The provision for income
taxes for the aforementioned adjustments were calculated at 26%, which approximated the Company’s blended tax rate.
Fiscal 2019
52 Weeks Ended February 1, 2020
GAAP Basis
Gross profit
$ 2,554,558
Selling, general
and administrative
expenses
Income from
operations
Gain on sale
of subsidiaries
Income before
income taxes
Net income
Earnings per
diluted share
$ 2,173,677
$ 375,613
$ (33,779)
$ 407,704
$ 297,462
$ 3.34
% of Net sales
29.19%
24.84%
4.29%
(0.39) %
4.66%
3.40%
Hunt restructuring
charges
Gain on sale of
subsidiaries
Non-cash asset
impairments
Litigation
contingency
settlement
—
—
—
13,135
(44,588)
57,723
—
57,723
50,072
—
—
33,779
(33,779)
(24,996)
(15,253)
15,253
—
15,253
11,287
Non-GAAP Basis
$ 2,567,693
$ 2,120,247
$ 442,178
$
6,411
(6,411)
—
—
(6,411)
(4,744)
$ 440,490
$ 329,081
$ 3.69
% of Net sales
29.34%
24.23%
5.05%
0.00%
5.03%
3.76%
During fiscal 2019, the Company recorded a pre-tax charge of $57.7 million related to the restructuring of the hunt business, which included a
trademark impairment of $28.3 million that was not deductible for tax purposes. The Company also recorded a pre-tax non-cash impairment charge
of $15.3 million to reduce the carrying value of a corporate aircraft to its current fair market value, which was subsequently sold. These charges
were offset by a pre-tax gain of $33.8 million related to the sale of two technology subsidiaries and a pre-tax benefit of $6.4 million resulting from
the favorable settlement of a litigation contingency that was originally accrued in fiscal 2017. The provision for income taxes for the aforementioned
adjustments were calculated at the Company's approximated blended tax rate, unless otherwise noted.
CORPORATE AND STOCKHOLDER INFORMATION
Corporate Office
345 Court Street
Coraopolis, PA 15108
724-273-3400
Annual Meeting
June 14, 2023 at 7:30 a.m.
Via the Internet at
http://www.virtualshareholdermeeting.com/DKS2023
DICK'S Sporting Goods Website
Form 10-K
www.DICKS.com
Transfer Agent and Registrar
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
One PPG Place
Suite 2600
Pittsburgh, PA 15222
Common Stock
The shares of DICK'S Sporting Goods, Inc. common stock
are listed and traded on the New York Stock Exchange
(NYSE), under the symbol "DKS". The shares of the
Company's Class B common stock are neither listed nor
traded on any stock exchange or other market.
The number of holders of record of the Company's common
stock and Class B common stock as of April 17, 2023 was
233 and 15, respectively.
Quarterly Stock Price Range
Set forth below, for the applicable periods indicated, are the
high and low closing sales prices per share of the
Company's common stock as reported by the NYSE.
2022 Fiscal Quarter Ended
High
Low
April 30, 2022
July 30, 2022
October 29, 2022
January 28, 2023
$ 118.15
$ 95.97
$ 102.71
$ 71.24
$ 117.77
$ 93.53
$ 128.65
$ 99.03
2021 Fiscal Quarter Ended
High
Low
May 1, 2021
July 31, 2021
October 30, 2021
January 29, 2022
$ 85.94
$ 68.67
$ 105.11
$ 83.29
$ 145.19
$ 104.69
$ 140.28
$ 99.91
A Form 10-K is available without charge online at
investors.DICKS.com, by emailing a request to
investors@dcsg.com, or through www.sec.gov.
It is also available upon request to:
Investor Relations
345 Court Street
Coraopolis, PA 15108
724-273-3400
Forward-Looking Statements
This document contains forward-looking statements made
pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified as those that relate to results or
outcomes in future periods and include statements
regarding, among other things, investments to continuously
improve our business, including by enhancing the athlete
experience, improving our eCommerce and fulfillment
capabilities; plans to invest in new and emerging brands as
well as our vertical brands; plans to invest in and launch
existing or new specialty concepts, including multiple new
House of Sport locations; improving our technology
(including youth sports technology) and digital capabilities;
our goals to reduce greenhouse gas emissions and to
diversify our suppliers; our goals in connection with our
Foundation to make an impact on youth athletes; plans to
continue investing in our brand relationships projected
capital expenditures; anticipated store openings and
relocations; plans to return capital to stockholders through
dividends and share repurchases, including more than
doubling our annual dividend payout; continuing with our
current leadership structure; and our ability to gain market
share and future results of operations and financial condition.
Forward-looking statements are subject to risks and
uncertainties, including the potential impact to consumer
demand and our supply chain due to the coronavirus
pandemic, and should not be relied on by investors because
actual results may materially differ from those indicated in
forward-looking statements. The factors that could cause
actual results to materially differ from those indicated in
forward-looking statements are described under Risk Factors
in our Annual Report. The forward-looking statements
contained herein speak only as of the date made, and we
undertake no obligation to update any such statements.
EXECUTIVE OFFICERS
Edward W. Stack
Executive Chairman
Lauren R. Hobart
President and Chief Executive Officer
Navdeep Gupta
Executive Vice President - Chief Financial Officer
Raymond Sliva
Executive Vice President - Stores
Vlad Rak
Executive Vice President - Chief Technology Officer
John E. Hayes III
Senior Vice President - General Counsel and
Corporate Secretary
Julie Lodge-Jarrett
Senior Vice President - Chief People and Purpose Officer
BOARD OF DIRECTORS
Edward W. Stack
Director since 1984
Executive Chairman
DICK'S Sporting Goods, Inc.
William J. Colombo
Director since 2002
Vice Chairman
DICK'S Sporting Goods, Inc.
Mark J. Barrenechea
Director since 2014
Chief Executive Officer and Chief Technology Officer
OpenText Corp.
Emanuel Chirico
Director since 2003
Retired Chairman and Chief Executive Officer
PVH Corp.
Anne Fink
Director since 2019
President, Global Foodservice
PepsiCo, Inc.
Larry Fitzgerald, Jr.
Director since 2020
Former Professional Athlete
National Football League
Lauren R. Hobart
Director since 2018
President and Chief Executive Officer
DICK'S Sporting Goods, Inc.
Sandeep Mathrani
Director since 2020
Chairman and Chief Executive Officer
WeWork Inc.
Desiree Ralls-Morrison
Director since 2020
Executive Vice President, Chief Legal Officer and
Corporate Secretary
McDonald's Corporation
Lawrence J. Schorr
Director since 1985
Lead Director
Retired Chief Executive Officer
Simona America Group, Simona AG
Larry D. Stone
Director since 2007
Retired President and Chief Operating Officer
Lowe's Companies, Inc.
345 Court Street
Coraopolis, PA 15108
www.dickssportinggoods.com