DICK’S SPORTING GOODS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (type 10-Q)

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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 Quarterly
Report on Form 10-Q or made by our management involve risks and uncertainties
and are subject to change based on various important factors, many of which may
be beyond our control. Accordingly, our future performance and financial results
may differ materially from those expressed or implied in any such
forward-looking statements. Investors should not place undue reliance on
forward-looking statements as a prediction of actual results. These statements
can be identified as those that may predict, forecast, indicate or imply future
results, performance or advancements and by forward-looking words such as
“believe”, “anticipate”, “expect”, “estimate”, “predict”, “intend”, “plan”,
“project”, “goal”, “will”, “will be”, “will continue”, “will result”, “could”,
“may”, “might” or any variations of such words or other words with similar
meanings. Forward-looking statements address, among other things, the uncertain
impact of inflation and its impact on consumer discretionary spending; supply
chain disruptions, including factory closures and port congestion, which are
resulting in rising container and transportation costs; plans to 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; our intention to repay the
principal outstanding amounts of the Convertible Senior Notes using excess cash,
free cash flow and borrowings on our Credit Facility; projections of our future
profitability; projected capital expenditures; anticipated store openings and
relocations; plans to return capital to stockholders through dividends and in
share repurchases; and our future results of operations and financial condition.

The following factors, among others, in some cases have affected, and in the
future, could affect our financial performance and actual results, and could
cause actual results for fiscal 2022 and beyond to differ materially from those
expressed or implied in any forward-looking statements included in this
Quarterly Report on Form 10-Q or otherwise made by our management:

?The impact of COVID-19 on our business, operations and financial results,
including the impact due to disruptions in our or our vendors’ supply chains and
due to restrictions imposed by federal, state, and local governments in response
to increases in the number of COVID-19 cases in areas in which we operate;

?Challenging macroeconomic conditions, including inflationary pressures and
supply chain constraints, due to COVID-19, the conflict in Ukraine or otherwise;
decreases in consumer demand for our products; and the effectiveness of measures
to mitigate such impact on our business and consumer spending;

?The dependence of our business on consumer discretionary spending, the impact
of a decrease in discretionary spending due to inflation or otherwise on our
business, and our ability to predict or effectively react to changes in consumer
demand or shopping patterns, including the short-term and long-term impact due
to the COVID-19 pandemic;

?Intense competition in the sporting goods industry and in retail, including
competition for talent and the level of competitive promotional activity;

?Increasing product costs, which could be caused by numerous reasons including
foreign trade issues, currency exchange rate fluctuations, increasing prices for
materials due to inflation or other reasons, supply chain delays and
constraints, or foreign political instability;

?Store closures due to COVID-19;

?Lawsuits or other claims arising from our response to COVID-19;

?Disruptions to our eCommerce platform, including interruptions, delays or
downtime caused by high volumes of users or transactions; deficiencies in design
or implementation; or platform enhancements;

?Vendors continuing to sell or increasingly selling their products directly to
customers or through broadened or alternative distribution channels;

?Negative reactions from our customers or vendors regarding changes to our
policies or advocacy efforts related to the sale of firearms and accessories;

?That our strategic plans and initiatives may initially result in a negative
impact on our financial results, or that such plans and initiatives may not
achieve the desired results within the anticipated time frame or at all;

•The impact of an increase to corporate tax rates;

•Lack of available retail store sites on terms acceptable to us, our ability to
leverage the flexibility within our existing real estate portfolio to capitalize
on future real estate opportunities over the near and intermediate term as our
leases come up for renewal, and other costs and risks relating to a brick and
mortar retail store model;

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?Unauthorized disclosure of sensitive or confidential customer information;

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

?Disruptions or other problems with our information systems;

?Risks and costs relating to changing laws and regulations affecting our
business, including consumer products; firearms and ammunition; tax, foreign
trade; labor; data protection; privacy; and environmental, social, and
governance issues;

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

?Our ability to secure and protect our trademarks and other intellectual
property and defend claims of intellectual property infringement;

?Our ability to protect the reputation of our Company and our brands;

?Our ability to attract, train, engage and retain qualified leaders and
associates due to current labor challenges or otherwise or the loss of Edward
Stack or Lauren Hobart as executive officers;

?The impact of wage increases on our financial results;

?Disruptions at our supply chain facilities or customer support center;

?Poor performance of professional sports teams, professional team lockouts or
strikes, retirement, serious injury or scandal involving key athletes, and
disruptions to or cancellations of major sporting events or organized youth and
adult sports programs due to COVID-19 or otherwise;

?Weather-related disruptions, unusual seasonal weather patterns and the overall
seasonality of our business, as well as the current geographic concentration of
DICK’S Sporting Goods stores;

?Our pursuit of strategic investments or acquisitions, including the timing and
costs of such investments and acquisitions;

?We are controlled by our Executive Chairman and his relatives, whose interests
may differ from those of our other stockholders;

?Risks related to our indebtedness, including the senior notes due 2032 (the
“2032 Notes”) and senior notes due 2052 (the “2052 Notes” and together with the
2032 Notes, the “Senior Notes”), the Convertible Senior Notes and the related
bond hedge and warrant transactions;

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

?The issuance of special or quarterly cash dividends and our repurchase
activity, if any, pursuant to our share repurchase programs.

The foregoing and additional risk factors are described in more detail in Item
1A. “Risk Factors” of this Quarterly Report and other reports or filings filed
or furnished by us with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended January 29, 2022, filed on
March 23, 2022 (our “2021 Annual Report”). In addition, we operate in a highly
competitive and rapidly changing environment; therefore, new risk factors can
arise, and it is not possible for management to predict all such risk factors,
nor to assess the impact of all such risk factors on our business or the extent
to which any individual risk factor, or combination of risk factors, may cause
results to differ materially from those contained in any forward-looking
statement. The forward-looking statements included in this Quarterly Report on
Form 10-Q are made as of the date hereof. We do not assume any obligation and do
not intend to update or revise any forward-looking statements whether as a
result of new information, future developments or otherwise except as may be
required by securities laws.

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, Field & Stream, Public Lands and Going Going Gone! specialty
concept stores and sell 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 video streaming,
scorekeeping, scheduling and communications. When used in this Quarterly Report
on Form 10-Q, unless the context otherwise requires or specifies, any reference
to “year” is to our fiscal year.

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Our profitability is primarily influenced by growth in comparable store sales,
the strength of gross margins derived from our omni-channel platform and our
ability to manage expenses. As part of our ongoing real estate strategy, over
the past few years we have reduced the rate at which we open new stores, and as
of April 30, 2022, we operated 729 DICK’S Sporting Goods stores and 129 other
specialty concept stores across the United States. Our recent real estate
strategy allows us to leverage the flexibility within our existing real estate
portfolio by capitalizing on favorable opportunities as leases come up for
renewal. In 2022, we expect our real estate strategy will continue to also
include growth in new retail concepts and experiential stores. Our eCommerce
platform allows for continued innovation and enhancements to our websites and
applications, 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 increase athlete engagement, including
ship-from-store, buy-online, pick-up in store or curbside and multi-channel
marketing campaigns. During the current quarter, our stores enabled over 90% of
total sales, serving both our in-store athletes and providing over 800 forward
points of distribution for digital fulfillment of orders.

Macroeconomic Outlook

The macroeconomic environment in which we operate remains uncertain. COVID-19
has disrupted global labor markets and supply chains, including factory closures
and port congestion, which has resulted in longer transit times and rising
container and transportation costs that we expect will continue to remain
elevated in the near term. Additionally, fuel prices continue to rise and have
been affected by the ongoing conflict in Ukraine, contributing to an
inflationary environment. Although we have successfully managed these issues
thus far, the longer term effect of these challenges and any actions to mitigate
them may impact consumer discretionary spending behavior. Our revised fiscal
2022 outlook contemplates this uncertainty, as we continue to actively monitor
this rapidly evolving environment.

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 same 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. See further discussion of our comparable store
sales in the “Results of Operations and Other Selected Data” 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. See further discussion of our cash flows in 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.

CRITICAL ACCOUNTING POLICIES

As discussed in Item 7. “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” of the Company’s 2021 Annual Report, we
consider our policies on inventory valuation, business development allowances,
goodwill and intangible assets, impairment of long-lived assets, self-insurance
reserves and stock-based compensation to be the most critical in understanding
the judgments that are involved in preparing our consolidated financial
statements.

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RESULTS OF OPERATIONS AND OTHER SELECTED DATA

Executive Summary

•Net sales decreased 7.5% to $2.70 billion in the current quarter from $2.92
billion during the first quarter of 2021, which included a decrease in
comparable store sales of 8.4% following a 117% increase in the same period last
year.

•In the current quarter, we reported net income of $260.6 million, or $2.47 per
diluted share, compared to $361.8 million, or $3.41 per diluted share, during
the first quarter of 2021.

•In consideration of our adoption of ASU 2020-06 in fiscal 2022, current quarter
earnings per diluted share assumes that our Convertible Senior Notes are settled
in shares of our common stock. As a result, the current quarter earnings per
diluted share excludes $8.2 million of interest expense, net of tax, and
includes 17.1 million diluted shares related to the Convertible Senior Notes,
which together, decreased earnings per diluted share by $0.38 during the first
quarter of 2022. Due to our intent to settle the principal of the Convertible
Senior Notes in cash and the shares we expect to receive from our convertible
bond hedge, which is designed to offset dilution, we do not expect the
Convertible Senior Notes will have a dilutive effect upon conversion.

•Net income in the first quarter of 2021 included approximately $13 million of
pre-tax COVID-related safety costs, or $0.09 per diluted share, net of tax.
Additionally, the first quarter of 2021 included $5.4 million of non-cash
interest expense, net of tax, and earnings per diluted share included 9.2
million shares related to the Convertible Senior Notes that are designed to be
offset at conversion by our bond hedge, which together decreased earnings per
diluted share by $0.38 in the prior year quarter.

•During the first quarter of 2022, we:

•Exchanged $100 million aggregate principal amount of our 3.25% Convertible
Senior Notes and unwound the applicable portion of the convertible bond hedge
and warrants for $100 million of cash and 1.8 million shares of our common
stock;

•Declared and paid a quarterly cash dividend in the amount of $0.4875 per share
of our common stock and Class B common stock; and,

•Repurchased 0.4 million shares of common stock for a total cost of $42.2
million under our share repurchase program.

•The following table summarizes store openings and permanent store closures for
the periods indicated:

Fiscal 2022 Fiscal 2021
DICK’S Sporting Specialty Concept DICK’S Sporting Specialty Concept
Goods (1) Stores (2) Total Goods (1) Stores (2) Total
Beginning stores 730 131 861 728 126 854
Q1 New stores – 1 1 2 – 2

Closed stores 1 3 4 – 1 1
Ending stores 729 129 858 730 125 855

Relocated stores 1 – 1 3 – 3

(1)Includes two DICK’S House of Sport stores.

(2)Includes our Golf Galaxy, Field & Stream, Public Lands and Going Going Gone!
stores, and excludes temporary Warehouse Sale store locations. 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 April 30, 2022, the Company operated 25 combo stores.
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The following table presents selected information from the unaudited
consolidated statements of income as a percentage of net sales and the changes
in the percentage of net sales from the comparable 2021 period, and other data,
and is provided to facilitate a further understanding of our business. This
table should be read in conjunction with Item 2. “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and the accompanying
unaudited Consolidated Financial Statements and related notes thereto.

13 Weeks Ended Basis Point Change
in Percentage of
Net Sales from
May 1, Prior Year
April 30, 2022 2021 (A) 2021-2022 (A)
Net sales (1) 100.00 % 100.00 % N/A

Cost of goods sold, including occupancy and distribution
costs (2)

63.53 62.70 83
Gross profit 36.47 37.30 (83)
Selling, general and administrative expenses (3) 22.79 20.84 195
Pre-opening expenses (4) 0.11 0.15 (4)
Income from operations 13.57 16.30 (273)

Interest expense 0.95 0.46 49
Other expense (income) 0.33 (0.25) 58
Income before income taxes 12.29 16.10 (381)
Provision for income taxes 2.64 3.70 (106)
Net income 9.65 % 12.39 % (274)

Other Data:
Comparable store sales (decrease) increase (5) (8.4 %) 117.1 %
Number of stores at end of period (6) 858 855
Total square feet at end of period (6) 42,306,455 42,096,539

(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 and
recruiting 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 determining comparable
store sales calculations to include relocated store locations. Prior year
information is revised to reflect this change for comparability purposes. See
additional details in Exhibit 99.2 of Form 8-K as filed with the SEC on March 8,
2022.

(6)Includes our DICK’S Sporting Goods, Golf Galaxy, Field & Stream, Public Lands
and Going Going Gone! stores. Excludes temporary locations.

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13 Weeks Ended April 30, 2022 Compared to the 13 Weeks Ended May 1, 2021

Net Sales

Net sales decreased approximately 7.5% to $2,700.2 million in the current
quarter from $2,918.7 million in the quarter ended May 1, 2021, due primarily to
a $239.1 million, or 8.4%, decrease in comparable store sales, partially offset
by a $20.6 million increase in net sales primarily attributable to new stores.
The decrease in comparable store sales included a 6.4% decrease in transactions
and a 2.0% decrease in sales per transaction and reflects last year’s favorable
sales impact following government stimulus payments as well as anticipated sales
normalization in certain categories, including fitness and outdoor equipment.

Income from Operations

Income from operations decreased to $366.5 million in the current quarter
compared to $475.8 million for the quarter ended May 1, 2021.

Gross profit decreased to $984.7 million in the current quarter from $1,088.6
million for the quarter ended May 1, 2021 and decreased as a percentage of net
sales by approximately 83 basis points. Merchandise margins increased 143 basis
points as a result of our differentiated product assortment combined with our
disciplined promotional strategies, as well as favorable sales mix. These
merchandise margin improvements, however, were more than offset by a 103 basis
point increase in supply chain related costs, primarily due to continuing global
disruptions following the start of COVID-19, and occupancy deleverage of 94
basis points. 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 $6.4 million compared to the prior year quarter.

Selling, general and administrative expenses increased to $615.3 million in the
current quarter from $608.3 million during the first quarter of 2021, and
increased as a percentage of net sales by 195 basis points primarily due to the
decrease in net sales. The $7.0 million increase was driven by investments in
hourly wage rates and talent to support our growth strategies, along with higher
brand-building marketing expenses, offset by lower incentive compensation
expense and a $17 million net cost reduction compared to the prior year quarter
related to changes in the investment values of our deferred compensation plans,
for which the corresponding investment change was recognized in Other Expense.
In addition, selling, general and administrative expense included approximately
$13 million of COVID-related costs in the prior year quarter.

Interest Expense

Interest expense increased to $25.6 million in the current quarter from $13.4
million in the prior year quarter. The increase was primarily due to $13.8
million of interest expense related to the $1.5 billion Senior Notes issued
during the fourth quarter of 2021. Current quarter interest expense also
included a $5.8 million inducement charge related to the exchange of $100
million aggregate principal amount of the Convertible Senior Notes, which was
offset by a $6.5 million decrease in non-cash interest expense due to our
adoption of ASU 2020-06; see Part I. Item 1. Financial Statements, Note
1-Description of Business and Basis of Presentation for additional details.

Other Expense (Income)

Other expense totaled $9.0 million in the current quarter compared to other
income of $7.4 million in the prior year quarter. Substantially all of the
change was due to changes in our deferred compensation plan investment values,
which we account for by recognizing investment income or expense and recording
an offsetting charge or reduction to selling, general and administrative costs.

Income Taxes

Our effective tax rate decreased to 21.5% in the current quarter from 23.0% in
the quarter ended May 1, 2021. The current quarter effective tax rate was
favorably impacted by the vesting of employee equity awards at a higher share
price than awards that vested in the prior year quarter.

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LIQUIDITY AND CAPITAL RESOURCES

Our cash on hand at April 30, 2022 was $2.25 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 revolving credit facility (the “Credit Facility”), if
necessary. We may require additional funding should we pursue strategic
acquisitions, settle all or a portion of the Convertible Senior Notes, undertake
share repurchases, pursue other investments or engage in store expansion rates
in excess of historical levels.

The following sections describe the potential short and long term impacts to our
liquidity and capital requirements.

Leases

We lease all of our stores, three of our distribution centers and certain
equipment under non-cancellable operating leases that expire at various dates
through 2033. Over two-thirds 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.

Revolving Credit Facility

We have available to us 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 April 30, 2022, 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 April 30,
2022.

Senior Notes

As of April 30, 2022, we have $750 million principal amount of senior notes due
2032 (the “2032 Notes”) and $750 million 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.

Convertible Senior Notes due 2025

Following our exchange of $100 million principal amount in cash during April
2022, we have an aggregate principal amount of $475 million of Convertible
Senior Notes outstanding. Cash interest accrues at a rate of 3.25% per annum,
payable semi-annually in arrears on April 15 and October 15. We currently
anticipate that we will repay the principal amount of the Convertible Senior
Notes in cash, whether in connection with an early conversion of such notes or
repayment at maturity, using excess cash, free cash flow and borrowings on our
Credit Facility to minimize share dilution. However, we may need to pursue
additional sources of liquidity to repay the Convertible Senior Notes in cash at
their maturity date or upon early conversion, as applicable.

As of April 30, 2022, the stock price conditions under which the Convertible
Senior Notes could be convertible at the holders’ option were met. However, we
have not received any material conversion requests through the filing date of
this Form 10-Q. There can be no assurance that any capital required to repay our
Convertible Senior Notes will be available on terms that are favorable to us, or
at all.

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. During the first quarter of fiscal 2022,
capital expenditures totaled $73.8 million on a gross basis and $53.9 million on
a net basis, which includes tenant allowances provided by landlords.

We anticipate that fiscal 2022 gross capital expenditures will be in a range of
$400 to $425 million, and $340 to $365 million on a net basis, which includes
tenant allowances provided by landlords. We expect our expenditures to be
concentrated on improvements within our existing stores and new store
development, as well as on continued investments in technology to enhance our
store fulfillment and in-store pickup capabilities.

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Share Repurchases

From time-to-time, we may opportunistically repurchase shares of our common
stock under favorable market conditions. During the first quarter of fiscal
2022, we repurchased approximately 0.4 million shares of our common stock at a
cost of $42.2 million. We currently operate under a $2.0 billion share
repurchase program that was authorized by the Board of Directors on December 16,
2021. As of April 30, 2022, the available amount remaining under the December
2021 authorization was $1.81 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

During the 13 weeks ended April 30, 2022, we have paid $46.1 million of
dividends to our stockholders. On May 24, 2022, our Board of Directors
authorized and declared a quarterly cash dividend in the amount of $0.4875 per
share of common stock and Class B common stock, payable on June 24, 2022 to
stockholders of record as of the close of business on June 10, 2022.

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 $98.3 million and $76.0 million as of
April 30, 2022 and January 29, 2022, respectively.

Cash Flows

Changes in cash and cash equivalents are as follows:

13 Weeks Ended
April 30, May 1,
(in millions) 2022 2021
Net cash (used in) provided by operating activities $ (60.3) $ 447.4
Net cash used in investing activities (70.3)

(73.4)

Net cash used in financing activities (261.3)

(173.3)

Effect of exchange rate changes on cash and cash equivalents –

Net (decrease) increase in cash and cash equivalents $ (391.9) $ 200.7

Operating Activities

Cash from operating activities decreased $507.7 million for the 13 weeks ended
April 30, 2022 compared to the same period in the prior year. The decrease was
primarily due to a $269.7 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 start of COVID-19. The
remaining decrease in cash from operating activities was primarily driven by
lower earnings in the current period, year-over-year changes in incentive
compensation accruals and corresponding payments, and the timing of marketing
and deferred compensation plan payments.

Investing Activities

Cash used in investing activities decreased $3.1 million for the 13 weeks ended
April 30, 2022 compared to the same period last year. Gross capital expenditures
for the current period include investments in store technology and facilities,
offset by last year’s investments in merchandise presentation and improving the
fitting and lesson experience in our golf business.

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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 $87.9 million for the 13 weeks ended April 30, 2022 compared to the
prior year period, primarily driven by payment for the exchange of $100 million
aggregate principal amount of our Convertible Senior Notes in April 2022.

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