On this page of StockholderLetter.com we present the latest annual shareholder letter from DICK'S SPORTING GOODS, INC. — ticker symbol DKS. Reading current and past DKS letters to shareholders can bring important insights into the investment thesis.
2023 Annual Report
OUR BELIEF We believe sports have the power to change lives. OUR VALUES Dedication Optimism Integrity Authenticity OUR COMMON PURPOSE We create confidence and excitement by inspiring, supporting, and personally equipping all athletes to achieve their dreams. iii
Dear Fellow Shareholders: Since our founding in 1948, DICK S has believed in the power of sports to change lives. We bring this to life every day through the experience we provide for our customers, whom we call athletes, the differentiated product we offer, the stories we tell through our marketing to connect athletes deeply with our brand and most importantly our culture, which enables our teammates to thrive. With these strategic pillars, we are actively creating and defining our future and during this past year, it s evident just how far we ve extended our leadership position. Our athletes continue to prioritize sports and healthy, active lifestyles, and they are increasingly looking to DICK'S Sporting Goods to meet these needs. In 2023, we made meaningful progress on all fronts and delivered a strong year: We delivered record sales of approximately $13 billion dollars. We continued to gain market share, with considerable growth in our largest and most important categories. We added nearly 7 million new athletes during the year and reached record highs in our active athlete database. We achieved full year comp sales of 2.4%, driven by growth in transactions. We delivered earnings per diluted share of $12.18 and non-GAAP earnings per diluted share of $12.91. We are proud of these results, which we could not achieve without our exceptional teammates who bring their passion, hard work and dedication to our business every day. Our teammates are truly the force behind our success, and we are deeply grateful to the 55,000 teammates who serve our athletes through our stores, distribution centers, corporate headquarters and GameChanger. Positioning Our Business for Growth Industry leaders consistently innovate from a foundation of strength, positioning themselves ahead of the curve. With this mindset, we have been transforming our business with an intense focus on the athlete what they want and need, how they want to experience sport, and how we can enable their journey. Our team is working together seamlessly to deliver an enhanced experience wherever and whenever our athletes want to shop. Our stores remain the hub for this effort, serving our in-store athletes while also providing more than 800 forward points of distribution for omnichannel fulfillment. During 2023, our stores enabled over 90% of our total sales. We continue to redefine sports retail by innovating with new experiences, services and concepts that resonate with our athletes. A great example of this is House of Sport, a concept we launched when Ed Stack, our Executive Chairman, challenged our team to imagine, and then create, the store that if put across the street from a current DICK S store could put that DICK S store out of business. Since we launched our first location in 2021, House of Sport has brought very strong engagement with our athletes, brand partners and communities and has delivered powerful financial results. Compared to a typical DICK S store, athletes are traveling farther to visit House of Sport, increasing the time they spend in the store and visiting more frequently. Because of the engagement and experience at House of Sport, our national brand partners are providing access to unique and expanded assortments, while new and emerging brands see it as a platform for growth. For a new House of Sport, in year one, we expect approximately $35 million in omnichannel sales and very strong profitability, with a target of approximately 20% EBITDA margins. At the end of 2024, we will have 20 House of Sport stores and by the end of 2027, we plan to have between 75 and 100 House of Sport locations. Inspired by House of Sport, we are continuing to innovate with our next generation 50,000 square foot prototype, which completely revolutionizes our most typical 50K sq. ft. DICK S store format. This store has a similar elevated assortment and service model as House of Sport, as well as premium experiences and enhanced visual expressions and format. It s delivering great results, and we re excited to open another 16 locations in 2024, building on the 11 we opened in 2023. This one-two punch of House of Sport and our next generation 50K format is the future of our DICK S stores and will serve as the hub for our athletes omnichannel experience.
We are also growing our Golf Galaxy brand. This past year, the Golf Galaxy footprint expanded to over 100 locations, including 14 Golf Galaxy Performance Centers, which offer an immersive experience for golf enthusiasts of all levels We plan to open additional performance centers in 2024. When we talk about drivers of innovation and success, in addition to enhancing our omnichannel athlete experience, we re committed to investing in our future by providing a highly differentiated product assortment, driving deep engagement with our brand, and creating a great environment for our teammates. Our product assortment: Our strong brand relationships have resulted in an industry-leading assortment and have made DICK S the go-to destination for differentiated and on-trend product. We will continue to make big bets with our partners, while also actively seeking to work with new and emerging brands. At the same time, we will continue to invest in our highly profitable portfolio of powerhouse vertical brands, including ST, DSG and CA IA, which are gaining meaningful traction with our athletes. Our brand engagement: We continue to invest in DICK S brand building through impactful storytelling, particularly around the power of sport, our vertical brands, and our digital offering. We also have focused on our digital experience and use data science to leverage our extensive athlete database to drive more personalized marketing and increase loyalty among our athletes. We continue to innovate within the multibillion-dollar youth sports technology market and strengthen our relationships with athletes and their families through GameChanger, the premier scoring, streaming and statistics mobile app. Our teammate experience: Our teammates are our biggest differentiator. The culture and energy in our stores are infectious. Our team comes to win every day, and we are equally committed to them, ensuring that we are offering a best-in-class experience that also provides them with opportunities to grow and develop. n esting in outh S orts We also will continue to invest in youth and in the power of sport through our Sports atter program, where we, together with The DICK S Sporting Goods Foundation, have helped more than two million kids gain access to sport and committed over $190 million to support young athletes with equipment, registration fees, league costs and playing fields. ast year, for our 75th anniversary, we distributed 75 grants worth $75,000 each to deserving programs. In 2024, as Sports atter celebrates its own anniversary of 10 years, we will be awarding another two million dollars in grants. ewarding Shareholders We have a long track record of investing in long-term growth opportunities, while still returning capital to our shareholders. During the year, we returned $1 billion to shareholders, and in the first quarter of 2024, we declared a 10% increase in our quarterly dividend, equivalent to an expected annualized dividend of $4.40 per share. This anticipated increase reflects our deep confidence in our business, as well as our ongoing focus on delivering shareholder value. Defining Our Future As we look forward in 2024, we are extremely optimistic about our future and the opportunities ahead. We have a talented and motivated team that is continuing to innovate our omnichannel approach, focusing on further improving service and satisfaction while driving higher sales and market share gains. We re guiding to another strong year and expect to grow both our sales and earnings through positive comps, higher merchandise margin and productivity gains. We are excited to serve our athletes whenever and wherever they need us and to excite, inspire and personally equip them so that they can achieve their goals. Thank you for your continued support and belief in our company. auren o art President and Chief Executive Officer
 • shareholder letter icon 5/2/2024 Letter Continued (Full PDF)
 • stockholder letter icon 5/5/2023 DKS Stockholder Letter
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 • Benford's Law Stocks icon DKS Benford's Law Stock Score = 80


DKS Shareholder/Stockholder Letter Transcript:

2023 Annual Report

OUR BELIEF
We believe sports have the
power to change lives.
OUR VALUES
    Dedication     Optimism
    Integrity     Authenticity
OUR COMMON
PURPOSE
We create confidence and
excitement by inspiring,
supporting, and personally
equipping all athletes to
achieve their dreams.
iii

Dear Fellow Shareholders:
Since our founding in 1948, DICK   S has believed in the power of sports to change lives. We bring this to life every day
through the experience we provide for our customers, whom we call athletes, the differentiated product we offer, the
stories we tell through our marketing to connect athletes deeply with our brand and     most importantly     our culture,
which enables our teammates to thrive.
With these strategic pillars, we are actively creating and defining our future     and during this past year, it   s evident just
how far we   ve extended our leadership position. Our athletes continue to prioritize sports and healthy, active lifestyles,
and they are increasingly looking to DICK'S Sporting Goods to meet these needs.
In 2023, we made meaningful progress on all fronts and delivered a strong year:



We delivered record sales of approximately $13 billion dollars.
We continued to gain market share, with considerable growth in our largest and most important categories.
We added nearly 7 million new athletes during the year and reached record highs in our active
athlete database.
We achieved full year comp sales of 2.4%, driven by growth in transactions.
We delivered earnings per diluted share of $12.18 and non-GAAP earnings per diluted share of $12.91.
We are proud of these results, which we could not achieve without our exceptional teammates who bring their
passion, hard work and dedication to our business every day. Our teammates are truly the force behind our success,
and we are deeply grateful to the 55,000 teammates who serve our athletes through our stores, distribution centers,
corporate headquarters and GameChanger.
Positioning Our Business for Growth
Industry leaders consistently innovate from a foundation of strength, positioning themselves ahead of the curve. With
this mindset, we have been transforming our business with an intense focus on the athlete     what they want and
need, how they want to experience sport, and how we can enable their journey.
Our team is working together seamlessly to deliver an enhanced experience wherever and whenever our athletes
want to shop. Our stores remain the hub for this effort, serving our in-store athletes while also providing more than
800 forward points of distribution for omnichannel fulfillment. During 2023, our stores enabled over 90% of our
total sales.
We continue to redefine sports retail by innovating with new experiences, services and concepts that resonate with
our athletes. A great example of this is House of Sport, a concept we launched when Ed Stack, our Executive
Chairman, challenged our team to imagine, and then create, the store that if put across the street from a current
DICK   S store could put that DICK   S store out of business. Since we launched our first location in 2021, House of Sport
has brought very strong engagement with our athletes, brand partners and communities and has delivered powerful
financial results. Compared to a typical DICK   S store, athletes are traveling farther to visit House of Sport, increasing
the time they spend in the store and visiting more frequently. Because of the engagement and experience at House of
Sport, our national brand partners are providing access to unique and expanded assortments, while new and
emerging brands see it as a platform for growth. For a new House of Sport, in year one, we expect approximately
$35 million in omnichannel sales and very strong profitability, with a target of approximately 20% EBITDA margins.
At the end of 2024, we will have 20 House of Sport stores and by the end of 2027, we plan to have between 75 and
100 House of Sport locations.
Inspired by House of Sport, we are continuing to innovate with our next generation 50,000 square foot prototype,
which completely revolutionizes our most typical 50K sq. ft. DICK   S store format. This store has a similar elevated
assortment and service model as House of Sport, as well as premium experiences and enhanced visual expressions
and format. It   s delivering great results, and we   re excited to open another 16 locations in 2024, building on the 11 we
opened in 2023. This one-two punch of House of Sport and our next generation 50K format is the future of our DICK   S
stores and will serve as the hub for our athletes    omnichannel experience.

We are also growing our Golf Galaxy brand. This past year, the Golf Galaxy footprint expanded to over 100 locations,
including 14 Golf Galaxy Performance Centers, which offer an immersive experience for golf enthusiasts of all levels
We plan to open additional performance centers in 2024.
When we talk about drivers of innovation and success, in addition to enhancing our omnichannel athlete experience,
we   re committed to investing in our future by providing a highly differentiated product assortment, driving deep
engagement with our brand, and creating a great environment for our teammates.



Our product assortment: Our strong brand relationships have resulted in an industry-leading assortment and
have made DICK   S the go-to destination for differentiated and on-trend product. We will continue to make big
bets with our partners, while also actively seeking to work with new and emerging brands. At the same time,
we will continue to invest in our highly profitable portfolio of powerhouse vertical brands, including
ST, DSG
and CA IA, which are gaining meaningful traction with our athletes.
Our brand engagement: We continue to invest in DICK   S brand building through impactful storytelling,
particularly around the power of sport, our vertical brands, and our digital offering. We also have focused on
our digital experience and use data science to leverage our extensive athlete database to drive more
personalized marketing and increase loyalty among our athletes. We continue to innovate within the
multibillion-dollar youth sports technology market and strengthen our relationships with athletes and their
families through GameChanger, the premier scoring, streaming and statistics mobile app.
Our teammate experience: Our teammates are our biggest differentiator. The culture and energy in our stores
are infectious. Our team comes to win every day, and we are equally committed to them, ensuring that we are
offering a best-in-class experience that also provides them with opportunities to grow and develop.
n esting in outh S orts
We also will continue to invest in youth and in the power of sport through our Sports atter program, where we,
together with The DICK   S Sporting Goods Foundation, have helped more than two million kids gain access to sport
and committed over $190 million to support young athletes with equipment, registration fees, league costs and playing
fields. ast year, for our 75th anniversary, we distributed 75 grants worth $75,000 each to deserving programs. In
2024, as Sports atter celebrates its own anniversary of 10 years, we will be awarding another two million dollars
in grants.
ewarding Shareholders
We have a long track record of investing in long-term growth opportunities, while still returning capital to our
shareholders. During the year, we returned $1 billion to shareholders, and in the first quarter of 2024, we declared a
10% increase in our quarterly dividend, equivalent to an expected annualized dividend of $4.40 per share. This
anticipated increase reflects our deep confidence in our business, as well as our ongoing focus on delivering
shareholder value.
Defining Our Future
As we look forward in 2024, we are extremely optimistic about our future and the opportunities ahead. We have a
talented and motivated team that is continuing to innovate our omnichannel approach, focusing on further improving
service and satisfaction while driving higher sales and market share gains. We   re guiding to another strong year and
expect to grow both our sales and earnings through positive comps, higher merchandise margin and productivity
gains. We are excited to serve our athletes whenever and wherever they need us     and to excite, inspire and
personally equip them so that they can achieve their goals.
Thank you for your continued support and belief in our company.
auren
o art
President and Chief Executive Officer



shareholder letter icon 5/2/2024 Letter Continued (Full PDF)
 

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