Dick's Sporting Goods — Nov 25, 2024 release

Exhibit 99.1                                      FOR IMMEDIATE RELEASE  DICK'S Sporting Goods Reports Third Quarter Results – Delivers 4.2% Comparable Sales Growth – – Raises 2024 Comp Sales and EPS Outlook – ● Delivered third quarter net sales of $3.06 billion and earnings per diluted share of $2.75 including the expected unfavorable impact from the calendar shift of approximately $105 million and $0.35 per diluted share, respectively ● Delivered year-to-date comparable sales growth of 4.7%, EBT margin of 11.8% and earnings per diluted share of $10.43 ● Raises full year 2024 guidance for comparable sales growth to a range of 3.6% to 4.2%, up from 2.5% to 3.5% previously ● Raises full year 2024 earnings per diluted share guidance to a range of $13.65 to 13.95, up from $13.55 to 13.90 previously "Our strong third quarter results demonstrate the significant momentum we have in our business. We continue to make strategic investments such as our House of Sport and DICK'S Field House concepts, where we are redefining sports retail and creating strong engagement with our athletes, brand partners and communities, that will fuel our long-term growth. Sport continues to have a strong influence on culture, and culture on sport, and our House of Sport concept is uniquely positioned to meet the needs of athletes as they look for the best of performance as well as the lifestyle of sport." Ed Stack, Executive Chairman "We are very proud of our Q3 results and our performance year-to-date. Our third quarter comp sales grew 4.2%, driven by a continued focus on our strategic pillars and great execution from our team. We had an excellent back-to-school season and continued to gain market share. As a result of our strong performance in the quarter and the continued confidence we have in our business, we are again raising our full year outlook. We believe our differentiated product, quality service and powerful omni-channel experience will resonate well with our athletes this holiday season."       Lauren Hobart, President and Chief Executive Officer PITTSBURGH, November 26, 2024 - DICK'S Sporting Goods, Inc. (NYSE: DKS), the largest U.S. based full-line omni-channel sporting goods retailer, today reported sales and earnings results for the third quarter ended November 2, 2024. Third Quarter Operating Results (dollars in millions, except per share data) 13 Weeks Ended Change (1) November 2, 2024 October 28, 2023 Net sales (2) $ 3,057 $ 3,042 $ 15  0.5% Comparable sales (2) (3) 4.2% 1.9% Income before income taxes (% of net sales) (4) 9.7% 8.8% 89 bps Non-GAAP income before income taxes (% of net sales) (4) (5) 9.7% 10.6% (84) bps Net income $ 228 $ 201 $ 27  13% Non-GAAP net income (5) $ 228 $ 240 $ (12) (5)% Earnings per diluted share (2) $ 2.75 $ 2.39 $ 0.36  15% Non-GAAP earnings per diluted share (2) (5) $ 2.75 $ 2.85 $ (0.10) (4)%                          Year-to-Date Operating Results (dollars in millions, except per share data) 39 Weeks Ended Change (1) November 2, 2024 October 28, 2023 Net sales (2) $ 9,549 $ 9,108 $ 441  4.8% Comparable sales (2) (3) 4.7% 2.5% Income before income taxes (% of net sales) (4) 11.8% 10.1% 162 bps Non-GAAP income before income taxes (% of net sales) (4) (5) 11.8% 10.7% 104 bps Effective tax rate 22.9% 18.7% 414 bps Net income $ 865 $ 750 $ 115  15% Non-GAAP net income (5) $ 865 $ 789 $ 76  10% Earnings per diluted share (2) $ 10.43 $ 8.63 $ 1.80  21% Non-GAAP earnings per diluted share (2) (5) $ 10.43 $ 9.08 $ 1.35  15% Balance Sheet (in millions) As of November 2, 2024 As of October 28, 2023 $ Change (1) % Change (1) Cash and cash equivalents $ 1,459  $ 1,406  $ 52  4% Inventories, net $ 3,726  $ 3,283  $ 443  13% Total debt (6) $ 1,484  $ 1,483  $ 1  —% Capital Allocation (in millions) 39 Weeks Ended $ Change (1) % Change (1) November 2, 2024 October 28, 2023 Share repurchases (7) $ 170 $ 649 $ (478) (74)% Dividends paid (8) $ 273 $ 271 $ 3  1% Gross capital expenditures $ 566 $ 410 $ 156  38% Net capital expenditures (5) $ 511 $ 369 $ 142  39% Notes 1. Column may not recalculate due to rounding. 2. Due to the 53 rd week in fiscal 2023, there is a one-week shift in the fiscal 2024 calendar compared to the prior year, which unfavorably impacted net sales comparisons for the third quarter by approximately $105 million, or approximately $0.35 per diluted share, and favorably impacted the year-to-date period by approximately $35 million, or approximately $0.10 per diluted share. Comparable sales for fiscal 2024 are calculated by shifting the prior year period by one week to compare similar calendar weeks. 3. Beginning in fiscal 2024, we revised our method for calculating comparable sales to include GameChanger revenue. Prior year information has been revised to reflect this change for comparability purposes. See additional details as furnished in Exhibit 99.2 of the Company’s Current Report on Form 8-K, filed with the SEC on March 14, 2024. 4. Also referred to by management as earnings before income taxes ("EBT"). 5. In the fiscal 2024 period, there were no non-GAAP adjustments to reported EBT margin, net income or earnings per diluted share. The fiscal 2023 period reflects non-GAAP adjustments for charges from the Company's business optimization, which was completed in 2023 to better align its talent, organization design and spending in support of its most critical strategies. For additional information, see GAAP to non-GAAP reconciliations included in tables later in the release under the heading "GAAP to Non-GAAP Reconciliations." 6. The Company had no outstanding borrowings under its revolving credit facility in 2024 and 2023. 7. During the 39 weeks ended November 2, 2024, the Company repurchased 0.8 million shares of its common stock under its share repurchase program at an average price of $203.98 per share, for a total cost of $170.3 million. The Company has $609.3 million remaining under its authorization as of November 2, 2024. 8. The Company declared and paid quarterly dividends of $1.10 per share in fiscal 2024 and $1.00 per share in fiscal 2023.                          Quarterly Dividend On November 25, 2024, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $1.10 per share on the Company's common stock and Class B common stock. The dividend is payable in cash on December 27, 2024 to stockholders of record at the close of business on December 13, 2024. Full Year 2024 Outlook The Company's Full Year Outlook for 2024 is presented below: Metric 2024 Outlook Earnings per diluted share ● $13.65 to 13.95 • Based on approximately 83 million diluted shares outstanding • Based on an effective tax rate of approximately 23% Net sales ● $13.2 billion to 13.3 billion Comparable sales ● Growth of 3.6% to 4.2% Capital expenditures ● Approximately $900 million on a gross basis ● Approximately $800 million on a net basis Store Count and Square Footage The following tables summarize store activity for the periods indicated:   39 Weeks Ended November 2, 2024 39 Weeks Ended October 28, 2023 DICK'S Sporting Goods Specialty Concept Stores (1) Total (2) DICK'S Sporting Goods Specialty Concept Stores (1) Total (2) Beginning stores 724 131  855  728  125  853  Q1 New stores 1 3  4  —  —  —  Q2 New stores 2 5  7  —  1  1  Q3 New stores 2 1  3  1  9  10  Stores acquired — —  —  —  12  12  Closed stores 2 3  5  4  3  7  Ending stores 727 (3) 137  864  725  144  869  Relocated stores 8 3  11  16  2  18   Square Footage:  (in millions) DICK'S Sporting Goods Specialty Concept Stores (1) Total (2)(4) Q1 2023 39.2 3.4 42.6 Q2 2023 39.0 3.4 42.4 Q3 2023 39.2 3.6 42.7 Q4 2023 39.3 3.4 42.7 Q1 2024 39.4 3.5 42.9 Q2 2024 39.6 3.7 43.2 Q3 2024 39.9 3.7 43.5 (1) Includes our Golf Galaxy, Public Lands, Going Going Gone! and other specialty concept stores. As of November 2, 2024, we operated 109 Golf Galaxy stores, 8 Public Lands stores, and 20 Going Going Gone! stores. As of October 28, 2023, we operated 104 Golf Galaxy stores, 7 Public Lands stores, 17 Going Going Gone! stores and other specialty concept stores. In some markets, we operate DICK’S Sporting Goods stores adjacent to our specialty concept stores on the same property with a pass-through for our athletes. We refer to this format as a “combo store” and include combo store openings within both the DICK’S Sporting Goods and specialty concept store reconciliations, as applicable. As of November 2, 2024, the Company operated 19 combo stores. (2) Excludes temporary value chain locations, of which the Company operated 30 and 41 as of November 2, 2024 and October 28, 2023, respectively. (3) As of November 2, 2024, includes 17 DICK'S House of Sport stores, with five new openings during fiscal 2024, three of which were relocated and one of which was remodeled from prior store locations. As of November 2, 2024, includes 22 DICK'S Field House stores, with eleven new openings during fiscal 2024, four of which were relocated and three of which were remodeled from prior store locations. (4) Column may not recalculate due to rounding. 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 EBT margin, non-GAAP net income, non-GAAP earnings per diluted share 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 its deferred compensation plans enables investors to better understand its selling, general and administrative expense trends excluding non-cash changes in our deferred compensation plan investment fair values from market fluctuations that are offset within other income. 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. Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties This release 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 may predict, forecast, indicate or imply future results or performance 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. These statements are subject to risks and uncertainties and change based on various important factors, many of which may be beyond the Company's control. The Company's future performance and actual results may differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements should not be relied upon by investors as a prediction of actual results. Forward-looking statements include statements regarding, among other things, the Company's future performance, including 2024 outlook for earnings, sales, and capital expenditures; momentum in our business; our growth opportunities, including sales and earnings through positive comps, higher gross margin and SG&A leverage; the repositioning of our real estate portfolio; access to differentiated products; execution of our core strategies; demand from our athletes; expected share repurchases; the expected increased dividend on an annualized basis; and the health and positioning of our inventory. Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements include, but are not limited to: macroeconomic conditions, inflation, elevated interest rates and recessionary pressures, adverse changes in consumer disposable income, consumer confidence and perception of economic conditions, including the instability in the banking sector, geopolitical conflicts (including the conflicts in Ukraine and the Middle East) and the threat or outbreak of further conflicts, terrorism or public unrest and changes in consumer discretionary spending; changes in the competitive market and competition amongst retailers and increasing direct competition from vendors; fluctuations in product costs and availability; international risks and costs, including foreign trade issues, currency exchange rate fluctuations, shipment delays and supply chain disruptions and political instability; changes in consumer demand or shopping patterns and the ability to identify new trends and have the right trending products in stores and online; our investments in vertical brand offerings and new specialty concept stores; our investments in GameChanger, our sports technology platform; reputational harm or negative reactions from customers, vendors and stockholders regarding Company policy changes or advocacy efforts related to social and political issues; investments in strategic plans and initiatives not producing the anticipated benefits within the expected time-frame or at all; an ability to execute our real estate strategy and risks associated with the brick and mortar retail store model; risks related to our distribution and fulfillment network; unauthorized disclosure of sensitive or confidential customer information or disruptions or other problems with our information systems, including our eCommerce platform; our ability to hire and retain quality teammates, including store managers and sales associates, increasing labor costs or the loss of key personnel; weather-related risks and seasonality of certain categories of the Company's operations; our ability to protect against inventory shrink; the ability of suppliers, distributors and manufacturers to provide us with sufficient quantities of quality product in a timely fashion; changes in existing tax, labor, foreign trade and other laws and regulations, including those imposing new taxes, surcharges, and tariffs, and compliance with such laws and regulations; product safety and labeling concerns; various types of litigation and other claims and sufficient insurance with respect thereto; our ability to protect our intellectual property rights or claims of infringement by third parties; the performance of professional sports teams and other factors relating to professional sports leagues and key athletes; and the availability of adequate capital; the issuance of quarterly cash dividends and our repurchase activity, if any; and obligations and other provisions related to our indebtedness. For additional information on these and other factors that could affect the Company's actual results, see the risk factors set forth in the Company's filings with the Securities and Exchange Commission ("SEC"), including the most recent Annual Report on Form 10-K, filed with the SEC on March 28, 2024. The Company disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation. Forward-looking statements included in this release are made as of the date of this release. Conference Call Info   The Company will host a conference call today at 8:00 a.m. Eastern Time to discuss the third quarter results. Investors will have the opportunity to listen to the earnings conference call over the internet through the Company's website located at investors.DICKS.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live webcast, it will be archived on the Company's website for approximately twelve months. About DICK'S Sporting Goods, Inc.   DICK’S Sporting Goods (NYSE: DKS) creates confidence and excitement by inspiring, supporting and personally equipping all athletes to achieve their dreams. Founded in 1948 and headquartered in Pittsburgh, the leading omnichannel retailer serves athletes and outdoor enthusiasts in more than 850 DICK’S Sporting Goods, Golf Galaxy, Public Lands, Going Going Gone! and Warehouse Sale stores, online, and through the DICK’S mobile app. DICK’S also owns and operates DICK’S House of Sport and Golf Galaxy Performance Center, as well as GameChanger, a youth sports mobile platform for live streaming, scheduling, communications and scorekeeping. Driven by its belief that sports have the power to change lives, DICK’S has been a longtime champion for youth sports and, together with its Foundation, has donated millions of dollars to support under-resourced teams and athletes through the Sports Matter program and other community-based initiatives. Additional information about DICK’S business, corporate giving, sustainability efforts and employment opportunities can be found on dicks.com , investors.dicks.com , sportsmatter.org , dickssportinggoods.jobs and on Instagram , TikTok , Facebook and X . Contacts: Investor Relations: Nate Gilch, Senior Director of Investor Relations DICK'S Sporting Goods, Inc. investors@dcsg.com (724) 273-3400 Media Relations: (724) 273-5552 or press@dcsg.com Category: Earnings ### DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data)     13 Weeks Ended November 2, 2024 % of Sales October 28, 2023 % of Sales Net sales $ 3,057,181  100.00  % $ 3,042,405  100.00  % Cost of goods sold, including occupancy and distribution costs 1,963,737  64.23  1,980,942  65.11  GROSS PROFIT 1,093,444  35.77  1,061,463  34.89  Selling, general and administrative expenses 790,621  25.86  768,188  25.25  Pre-opening expenses 16,779  0.55  20,331  0.67  INCOME FROM OPERATIONS 286,044  9.36  272,944  8.97  Interest expense 12,947  0.42  14,382  0.47  Other (income) expense (23,976) (0.78) (10,084) (0.33) INCOME BEFORE INCOME TAXES 297,073  9.72  268,646  8.83  Provision for income taxes 69,260  2.27  67,540  2.22  NET INCOME $ 227,813  7.45  % $ 201,106  6.61  % EARNINGS PER COMMON SHARE:         Basic $ 2.83  $ 2.46    Diluted $ 2.75  $ 2.39    WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:       Basic 80,404  81,772    Diluted 82,776  84,291    Beginning in 2024, the Company included grand opening advertising costs within pre-opening expenses, which were historically included within selling, general and administrative expenses. Prior period amounts have been reclassified to conform to our current year presentation. DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED (In thousands, except per share data)   39 Weeks Ended   November 2, 2024 % of Sales October 28, 2023 % of Sales (1) Net sales $ 9,549,200  100.00  % $ 9,108,228  100.00  % Cost of goods sold, including occupancy and distribution costs 6,084,762  63.72  5,908,672  64.87  GROSS PROFIT 3,464,438  36.28  3,199,556  35.13  Selling, general and administrative expenses 2,330,692  24.41  2,226,820  24.45  Pre-opening expenses 46,806  0.49  62,408  0.69  INCOME FROM OPERATIONS 1,086,940  11.38  910,328  9.99  Interest expense 40,304  0.42  43,809  0.48  Other (income) expense (75,124) (0.79) (56,288) (0.62) INCOME BEFORE INCOME TAXES 1,121,760  11.75  922,807  10.13  Provision for income taxes 256,422  2.69  172,721  1.90  NET INCOME $ 865,338  9.06  % $ 750,086  8.24  % EARNINGS PER COMMON SHARE:         Basic $ 10.75  $ 9.04    Diluted $ 10.43  $ 8.63    WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:       Basic 80,473  82,995    Diluted 82,979  86,913    (1)  Column does not add due to rounding Beginning in 2024, the Company included grand opening advertising costs within pre-opening expenses, which were historically included within selling, general and administrative expenses. Prior period amounts have been reclassified to conform to our current year presentation. DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - UNAUDITED (In thousands) November 2, 2024 October 28, 2023 February 3, 2024 ASSETS       CURRENT ASSETS:     Cash and cash equivalents $ 1,458,655  $ 1,406,214  $ 1,801,220  Accounts receivable, net 217,863  140,791  114,877  Income taxes receivable 7,806  9,118  4,108  Inventories, net 3,725,912  3,282,911  2,848,797  Prepaid expenses and other current assets 125,723  104,963  121,047  Total current assets 5,535,959  4,943,997  4,890,049  Property and equipment, net 1,958,017  1,569,703  1,638,161  Operating lease assets 2,382,697  2,243,025  2,257,482  Intangible assets, net 56,472  56,754  56,663  Goodwill 245,857  245,857  245,857  Deferred income taxes 42,031  30,817  37,846  Other assets 230,778  192,173  185,694  TOTAL ASSETS $ 10,451,811  $ 9,282,326  $ 9,311,752  LIABILITIES AND STOCKHOLDERS' EQUITY       CURRENT LIABILITIES:       Accounts payable $ 1,699,957  $ 1,630,402  $ 1,288,728  Accrued expenses 665,678  550,006  551,369  Operating lease liabilities 517,968  485,033  492,856  Income taxes payable 11,241  42,010  54,508  Deferred revenue and other liabilities 322,888  281,943  364,933  Total current liabilities 3,217,732  2,989,394  2,752,394  LONG-TERM LIABILITIES:       Revolving credit borrowings —  —  —   Senior notes 1,483,975  1,483,026  1,483,260  Long-term operating lease liabilities 2,487,303  2,264,941  2,287,714  Other long-term liabilities 199,416  160,261  171,103  Total long-term liabilities 4,170,694  3,908,228  3,942,077  COMMITMENTS AND CONTINGENCIES       STOCKHOLDERS' EQUITY:       Common stock 569  568  568  Class B common stock 236  236  236  Additional paid-in capital 1,470,946  1,430,802  1,448,855  Retained earnings 6,183,406  5,374,573  5,588,914  Accumulated other comprehensive loss (519) (462) (329) Treasury stock, at cost (4,591,253) (4,421,013) (4,420,963) Total stockholders' equity 3,063,385  2,384,704  2,617,281  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,451,811  $ 9,282,326  $ 9,311,752  DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED (In thousands)   39 Weeks Ended   November 2, 2024 October 28, 2023 CASH FLOWS FROM OPERATING ACTIVITIES:     Net income $ 865,338  $ 750,086  Adjustments to reconcile net income to net cash provided by operating activities:     Depreciation and amortization 290,360  271,368  Amortization of deferred financing fees and debt discount 1,747  1,786  Deferred income taxes (4,185) 10,372  Stock-based compensation 50,716  39,552  Other, net (6,795) 9,182  Changes in assets and liabilities:     Accounts receivable (25,055) (25,831) Inventories (877,115) (415,291) Prepaid expenses and other assets (7,839) (2,253) Accounts payable 404,685  256,141  Accrued expenses 62,024  (21,473) Income taxes payable / receivable (48,518) 11,659  Construction allowances provided by landlords 54,445  40,624  Deferred revenue and other liabilities (24,586) (56,835) Operating lease assets and liabilities (54,915) (104,373) Net cash provided by operating activities 680,307  764,714  CASH FLOWS FROM INVESTING ACTIVITIES:     Capital expenditures (565,569) (409,527) Proceeds from sale of other assets 11,872  27,500  Other investing activities (3,548) (51,298) Net cash used in investing activities (557,245) (433,325) CASH FLOWS FROM FINANCING ACTIVITIES:   Principal paid in connection with exchange of convertible senior notes —  (137) Payments on finance lease obligations —  (609) Proceeds from exercise of stock options 13,277  13,924  Minimum tax withholding requirements (41,893) (97,956) Cash paid for treasury stock (170,268) (648,554) Cash dividends paid to stockholders (273,097) (270,596) Increase in bank overdraft 6,544  154,577  Net cash used in financing activities (465,437) (849,351) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (190) (210) NET DECREASE IN CASH AND CASH EQUIVALENTS (342,565) (518,172) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,801,220  1,924,386  CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,458,655  $ 1,406,214  DICK'S SPORTING GOODS, INC. GAAP to NON-GAAP RECONCILIATIONS - UNAUDITED Non-GAAP Net Income and Earnings Per Share Reconciliations (dollars in thousands, except per share amounts) 13 Weeks Ended November 2, 2024 Selling, general and administrative expenses Other (income) expense Income before income taxes Net income Earnings per diluted share GAAP Basis $ 790,621  $ (23,976) $ 297,073  $ 227,813  $ 2.75  % of Net Sales 25.86  % (0.78) % 9.72  % 7.45  % Deferred compensation plan adjustments (1) (3,476) 3,476  —  —  Non-GAAP Basis $ 787,145  $ (20,500) $ 297,073  $ 227,813  $ 2.75  % of Net Sales 25.75  % (0.67) % 9.72  % 7.45  % (1) Includes non-cash changes in fair value of employee deferred compensation plan investments held in rabbi trusts. 39 Weeks Ended November 2, 2024 Selling, general and administrative expenses Other (income) expense Income before income taxes Net income Earnings per diluted share GAAP Basis $ 2,330,692  $ (75,124) $ 1,121,760  $ 865,338  $ 10.43  % of Net Sales 24.41  % (0.79) % 11.75  % 9.06  % Deferred compensation plan adjustments (1) (17,622) 17,622  —  —  Non-GAAP Basis $ 2,313,070  $ (57,502) $ 1,121,760  $ 865,338  $ 10.43  % of Net Sales 24.22  % (0.60) % 11.75  % 9.06  % (1) Includes non-cash changes in fair value of employee deferred compensation plan investments held in rabbi trusts. 13 Weeks Ended October 28, 2023 Gross profit Selling, general and administrative expenses Other (income) expense Income before income taxes Net income (3) Earnings per diluted share GAAP Basis $ 1,061,463  $ 768,188  $ (10,084) $ 268,646  $ 201,106  $ 2.39  % of Net Sales 34.89  % 25.25  % (0.33) % 8.83  % 6.61  % Business optimization charges (1) 6,323  (46,174) —  52,497  38,848  Deferred compensation plan adjustments (2) —  12,046  (12,046) —  —  Non-GAAP Basis $ 1,067,786  $ 734,060  $ (22,130) $ 321,143  $ 239,954  $ 2.85  % of Net Sales 35.10  % 24.13  % (0.73) % 10.56  % 7.89  % (1) Included $23.3 million of severance-related costs, $22.9 million of non-cash impairments of store and intangible assets and a $6.3 million write-down of inventory. (2) Included non-cash changes in fair value of employee deferred compensation plan investments held in rabbi trusts. (3) The provision for income taxes for non-GAAP adjustments was calculated at 26% which approximated the Company's blended tax rate. 39 Weeks Ended October 28, 2023 Gross profit Selling, general and administrative expenses Other (income) expense Income before income taxes Net income (3) Earnings per diluted share GAAP Basis $ 3,199,556  $ 2,226,820  $ (56,288) $ 922,807  $ 750,086  $ 8.63  % of Net Sales 35.13  % 24.45  % (0.62) % 10.13  % 8.24  % Business optimization charges (1) 6,323  (46,174) —  52,497  38,848  Deferred compensation plan adjustments (2) —  2,137  (2,137) —  —  Non-GAAP Basis $ 3,205,879  $ 2,182,783  $ (58,425) $ 975,304  $ 788,934  $ 9.08  % of Net Sales 35.20  % 23.96  % (0.64) % 10.71  % 8.66  % (1) Included $23.3 million of severance-related costs, $22.9 million of non-cash impairments of store and intangible assets and a $6.3 million write-down of inventory. (2) Included non-cash changes in fair value of employee deferred compensation plan investments held in rabbi trusts. (3) The provision for income taxes for non-GAAP adjustments was calculated at 26% which approximated the Company's blended tax rate. Reconciliation of Gross Capital Expenditures to Net Capital Expenditures (in thousands)  The following table represents a reconciliation of the Company's gross capital expenditures to its capital expenditures, net of construction allowances. 39 Weeks Ended   November 2, 2024 October 28, 2023 Gross capital expenditures $ (565,569) $ (409,527) Construction allowances provided by landlords 54,445  40,624  Net capital expenditures $ (511,124) $ (368,903)