Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome you to the DICK'S Sporting Goods, Inc. Fourth Quarter and full year 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star then the number one on your telephone keypad. And if you'd like to withdraw your question, again, star one. I would now like to turn the conference over to Nathaniel Gilch, Vice President of Investor Relations. Nate, the floor is yours. Good morning, everyone.

And thank you for joining us to discuss our fourth quarter and full year 2025 results. On today's call will be Edward Stack, our Executive Chairman; Lauren Hobart, our President and Chief Executive Officer; and Navdeep Gupta, our Chief Financial Officer. A playback of today's call will be archived on our Investor Relations website located at investors.dicks.com for approximately 12 months. As a reminder, we will be making forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our last annual report on Form 10-K, as well as cautionary statements made during this call. We assume no obligation to update any of these forward-looking statements or information. Please refer to our Investor Relations website to find the reconciliation of our non-GAAP financial measures referenced in today's call. And finally, a couple of admin items. First, a quick reminder on our comparable sales reporting. Foot Locker will be included in our comp calculations beginning in Q4 2026, which will mark the start of their 14th full month of operations post acquisition. And second, for future scheduling purposes, we are tentatively planning to publish our first quarter 2026 earnings results on 05/27/2026. I will now turn the call over to Edward Stack.

Thanks, Nate. Morning, everyone. As we shared this morning, we closed the year with another strong quarter for the DICK'S business, delivering comps over 3% and double-digit non-GAAP EPS growth. Our team's execution and our ability to consistently deliver a differentiated, on-trend product assortment and best-in-class omnichannel athlete experience continue to produce strong results and market share gains. We believe these fundamentals position the DICK'S business for long-term profitable growth. Now I would like to turn to the transformational opportunity we have with Foot Locker, where we continue to make significant progress in strengthening the business. We have now owned Foot Locker for about six months, and I will tell you, our excitement and our conviction in the long-term opportunity here continue to grow. We have moved quickly to test and learn in North America through what we call our Fast Break initiative. This is the evolution of the 11-store pilot we discussed last quarter. While it is still early, we are very encouraged by what we are seeing. During Q4, our Fast Break stores drove very strong positive comps, actually meaningfully exceeding the DICK'S business, while also delivering strong gross margin improvement. The improvement is coming from the basics: clearer storytelling, better presentation, and a more focused assortment where we removed roughly 30% of the styles on the shoe wall that were unproductive and eliminated the run-on sentence that we have been talking about that was not showing the customer what product was important. Based on the strength of the pilot results, we have already expanded Fast Break to an additional 10 stores in LA before the NBA All-Star Game, and we are very pleased with the strong early performance. Now looking ahead, we are excited to rapidly scale Fast Break by back-to-school 2026. As discussed last quarter, our…

Thank you, Ed, and good morning, everyone. I want to emphasize Ed's comments and recognize the incredible work of our teams across our entire company who contributed to our success throughout this past year. I am so proud of what we achieved together in 2025. Looking specifically at the DICK'S business, our teammates' passion, their commitment to our athletes, and a relentless focus on execution powered another strong quarter and holiday season and a terrific year overall. Their hard work continues to bring our four strategic pillars to life: a compelling omnichannel athlete experience, a differentiated on-trend product assortment, a deep engagement with the DICK'S brand, and the strength of our teammates and our culture. These pillars remain the foundation of our success and guide our strong performance. For the full year, we are very pleased to have delivered record sales of $14,100,000,000 for the DICK'S business. Our comps increased 4.5% and exceeded the high end of our expectations, driven by growth in average ticket and transactions as we continue to gain market share. We drove gross margin expansion and achieved double-digit operating margin of 11.1%. We delivered non-GAAP EPS of $14.58, also above the high end of our outlook and up from $14.50 in 2024. Our fourth quarter marked a strong finish to the year for the business. Our Q4 comps increased 3.1%, building on last year's 6.6% increase and delivering a two-year comp stack of nearly 10%. We saw more athletes purchase from us, and they spent more each trip compared to the prior year. Our Q4 gross margin expansion accelerated sequentially and we drove operating margin of 11%, and non-GAAP EPS of $4.05, both well ahead of last year. Today, the intersection of sport and culture has never been stronger, and excitement continues to build. This momentum…

Thank you, Lauren, and good morning, everyone. To start, I want to echo Ed and Lauren's excitement as we enter 2026 with real strength and momentum. Now let us begin with some highlights for full year 2025 results. Consolidated net sales increased 28.1% to $17,220,000,000, driven by a $3,110,000,000 sales contribution from a partial year of owning the Foot Locker business and a 4.5% comp increase for the DICK'S business as we continue to gain market share. These strong comps were driven by a 4.2% increase in average ticket and a 0.3% increase in transactions. On a two-year and a three-year stack basis, comps for the DICK'S business increased 9.7% and 12.3%, respectively. Consolidated non-GAAP operating income was $1,520,000,000, or 8.81% of net sales, compared to $1,500,000,000, or 11.14% of net sales last year. This includes operating income of $1,570,000,000, or 11.12% of net sales for the DICK'S business, driven by strong comps and gross margin expansion, and a $52,200,000 operating loss from a partial year of owning the Foot Locker business. Consolidated non-GAAP earnings per diluted share were $13.20, which included just over 20 weeks of results for the Foot Locker business and a diluted share count of 85,100,000. Looking specifically at the DICK'S business, we delivered non-GAAP earnings per diluted share of $14.58 based on the share count of 81,200,000, which excludes the dilutive effect of the shares issued in connection to the acquisition of Foot Locker. That exceeded the high end of our guidance and is up 3.8% from our earnings per diluted share of $14.05 last year. Now moving to our results for Q4. Consolidated Q4 net sales increased 59.9% to $6,230,000,000, driven by a $2,180,000,000 sales contribution from the newly acquired Foot Locker business and a 3.1% comp increase for the DICK'S business. These strong…

Thank you. We will now begin the question and answer session. We kindly ask that you limit yourself to one question and one follow-up. Any additional questions, please re-queue. Your first question comes from the line of Brian Nagel with Oppenheimer. Please go ahead.

Hi. Good morning. Congratulations on a nice quarter. Nice progress here. Again, I want to ask you maybe a two-part question, with both parts focused on core DICK'S business. So first, if you look at the guidance you laid out for sales growth for DICK'S, it is very solid, above the current public Street forecast. I guess the question I had there is, and you talked about this a little bit, maybe elaborate further, what is giving you that confidence in the underlying momentum? And then the follow-up question also on DICK'S. When you look at the fourth quarter, not to be too nitpicky here, but obviously a very solid quarter, there was a modest deceleration within sales growth of the core DICK'S business from what we saw in the third quarter. Maybe you can discuss what was behind that.

Thanks, Brian. I appreciate the question. We had a fantastic quarter in Q4. We are really proud of the quarter we just put up. We had a 3.1% comp growth and, importantly, we were on top of the prior year 6.6% comp. So on a two-year stack basis, we actually exceeded our internal expectations. We were close to 10%. So it was a really strong quarter from a comp standpoint. We also expanded gross margin and operating margin in the business. So overall, really proud of how the team navigated through Q4. But I think why that gives me confidence as we look to the future is that the momentum in our business remains incredibly strong. And in this past Q4, we saw growth across all of our key categories: footwear, apparel, hardlines. And we are finding that consumers are doing very, very well. So we have seen growth across all income demographics. We have not seen trade down. And we are finding that when a consumer sees something that is new, or innovative, or technically impactful, it is resonating with them, and they are coming. We think that is only going to continue as we look to the year and the incredible excitement around sport and the influence it has on culture as we head into the World Cup coming up—well, March Madness and then the World Cup. So we are really, really confident. The two-year stack going forward is a 7.5% comp, so 2% to 4% on top of our 4.5%. And we are really thrilled with the momentum we have to deliver that.

Thanks, Lauren. I appreciate all the color.

Your next question comes from the line of Adrienne Yih with Barclays. Please go ahead.

Good morning, and I will add my congratulations. Very well done. Great way to end the year and start the new one. Thank you. It sounds like there is a lot of exciting work underway at Foot Locker to reposition the business for its turn in 2026. On top of that, the Q4 results came in better than you saw, particularly sales, and margins were in line. So my question centers around the cleaning out of the garage, which you expressed last quarter as your top priority. It sounds like inventory is nice and clean. How would you characterize where you are? Is there more work to do? And how many stores will be in this Fast Break that you can touch this year? And then I will have a follow-up. Thank you.

Thanks, Adrienne. I can tell you that the team across the globe did a great job to clean out the garage. There was a lot of excess inventory there, inventory that was not very productive. Like we said in the Fast Break stores, we took out roughly 30% of the SKUs and kind of fixed that run-on sentence that was the Foot Locker shoe wall. The team across the globe—North America, Europe, Asia—really got behind this whole clean out the garage objective and did that. To be honest with you, that work is done. That is behind us. We cleaned out the garage with markdowns in the stores and moved product through the Foot Locker stores and the Champs stores. We also utilized—I think this is one of the benefits of the acquisition between DICK'S and Foot Locker—we actually utilized the DICK'S value chain of Going, Going, Gone to clean out a lot of that inventory. We were able to recover a higher cash amount by putting it through the DICK'S value chain than if we sent that out through a jobber, and we are really well positioned. This inventory of Foot Locker is probably cleaner than it has ever been. And that should bode well for our margins and our sales going forward, returning this chain to growth with a comp of 1% to 3%. We should have margin expansion here. We are confident of that. So all in all, to clean out the garage, the team did a great job, and we are done.

Fantastic. Follow-up, Lauren. As you look at the innovation pipeline throughout 2026, particularly in technical running and performance basketball, are you seeing a meaningful shift back toward iconic must-have products from your biggest traditional partners, or should we expect growth still to be driven by the addition and growth of new, smaller niche brands? Thank you.

Yes. Thanks, Adrienne. We are seeing growth across the board. We are seeing great growth from our strategic partners, and we are very excited about things like running footwear, the innovation that we are seeing, the new Run Construct from Nike doing very well, and across the board running is really doing well. Signature basketball is also doing really, really well. And that is true, of course, of DICK'S and Foot Locker. With DICK'S, we are particularly excited about the excitement around women's sports, and Sabrina and A'ja have done so well, and then we look forward and Caitlin coming is going to be a lot of excitement. Team sports are also driving incredible buzz in a way that it used to be footwear launches that used to drive this kind of excitement. We are seeing that in team sports and all aspects of our business. And so between new and emerging brands, we are adding through the House of Sport partnerships with really exciting brands. We have Gymshark, where we are their first US wholesale partner, and a lot of brands who have come in through the House of Sport who are now widening into Fieldhouse locations and then even beyond to the entire DICK'S format. So I would say what is great about the growth is it is across the board in all categories, and it is also across the board between our strategic partners, our emerging partners, and our vertical brands.

If I could just add on to that, as Lauren said, Nike is doing very well. We are really pleased with them. Adidas, and we are leaning into the World Cup with Adidas, and we think the World Cup is going to be great. And with Fanatics, we have really partnered on the collectibles and the card side of the business, the trading card business. We will have collectible shops in all House of Sport stores going forward, bringing those into some of the Fieldhouse concepts. So this whole idea of collectibles and trading card business, which we have not been in before, will certainly be accretive to our sales number.

Your next question comes from the line of Simeon Gutman with Morgan Stanley. Please go ahead.

Hey, good morning, everyone. So the business is performing solidly. If we step back, call it three months ago, I would have suggested or thought that the core business margin might be a little stronger given some of the House of Sport penetration and the continued gross margin gains. And then Foot Locker, I would expect a little bit more EBIT to get to that accretion number. Curious how you react to all of that. Is that fair? And is that different versus the way you see it?

Let me jump in on the Foot Locker piece first, Simeon. We could have guided Foot Locker to be higher if we had based it on our original projections. But what has happened is we have gone through this Fast Break process. We have got the original 11 Fast Break stores. We added 10 Fast Break stores in LA around the All-Star Game. We have got a couple of Fast Break stores in Europe right now. And what we found is some of those underperforming stores that are losing money or just marginally profitable right now—based on what we are seeing we can do from a Fast Break standpoint and renovating these stores—we can make these stores very profitable. So we are closing fewer stores than we had originally anticipated. If we had decided to close those stores, Foot Locker could have been a bit more profitable in Q1 and Q2. It is going to take us a little time to get these Fast Break stores done and get to all of them that we want to get to. But we will get to probably 250 of these stores by back-to-school. It is a herculean effort, but we are really confident that we can do that. So the reason the Foot Locker outlook is where it is right now is because Fast Break, and the optimism we have for Foot Locker, is even greater than it was originally because some of these marginally profitable or money-losing stores, if we feed them the right inventory, we can make them profitable. We think that is the right thing to do on a longer-term basis.

I will just build on quickly. The guidance that we provide always balances the optimism and the confidence that we have against the overall macroeconomic and geopolitical situation. As you can see, it is very dynamic, and so that was another thing that we factored into our guidance. Quickly touching on your gross margin expansion in Q4, we were very happy with the results we posted here. And like Lauren said, 3.1% comp on top of a 6.6% comp, in a quarter that is typically very promotional. We were very happy with the 67 basis points of margin expansion we posted here in Q4. And keep in mind, this 67 basis points of margin expansion all came from merchandising margin. So our merchants and the inventory management team did a phenomenal job to finish the year strong from a clean inventory and driving top-line momentum as well as gross margin expansion.

And I think, Simeon, also, it was more promotional out there than we had anticipated, and I think the team did a fabulous job managing our margin rates and the profitability of the business and the operating margins in an environment that was as promotional as it was.

That is helpful. And just to clarify, I guess when I meant the margin, I was actually looking more towards 2026, like the full year. I think the fourth quarter was quite solid. But the follow-up is first half or second half. I do not know if you would share what you have thought about for World Cup, if there is an explicit top-line impact? And then are some of the investment spending related to core? Or is there some spend even ahead of World Cup where your margin ends up ramping more in the second half than the first half?

Yes. So, Simeon, in what we gave in my prepared comments today is that we expect the comps to be slightly higher in the DICK'S business in the first half because of the World Cup benefit. We did not explicitly guide to the exact number associated with it, but that is what was assumed in our guidance that we have shared. And then we expect the operating margins to decline in the first half due to two big reasons. One, we are making appropriate levels of investments in the business to continue to position the business for the long term. And second, the synergy benefits that we are looking at will be more back-half weighted, and so that is the other benefit that kicks in more in the second half than in the first half.

Your next question comes from the line of Kate McShane with Goldman Sachs. Please go ahead.

Hi. Good morning. Thanks for taking our question. We wanted to ask about GameChanger and retail media. I know you mentioned it in the prepared comments a little bit, but we wondered if there was any way you could talk about any new initiatives maybe with either business, and then just in terms of what we can expect from margin contribution from that this year.

Thanks, Kate. GameChanger and DMN are both really important, powerful new assets that we have in our portfolio. I will start with GameChanger. As you know, GameChanger is the market leader in the multibillion-dollar tech sports space, and it continues to drive really strong comps—nearly 40% CAGR—and strong profitability. It is a SaaS system, and it continues to drive strength and profit. So you can look at it that way and say GameChanger is fantastic. But then when you step out and look at the impact that GameChanger and DICK'S can have together—the fact that we can be embedded in youth sports lives at the moment when they are preparing and playing—we can be involved with parents and grandparents. We can have kids get their stats and their highlight reels. It just makes us really embedded in youth sport culture. The other thing, and it is related to your second part of your question, is that from a DICK'S Media Network standpoint, GameChanger is unique in the marketplace where it has live sports in a way that really nobody else can provide. And so it is a big asset for our DICK'S Media Network, and it is appealing to our brand partners as well as to our non-endemic partners who want to be a part of youth sports. In terms of newness, we did just unleash a bunch of features in GameChanger. For those of you who watch, the video quality is high definition—really incredible, really crisp, really clear. And we are going to continue to launch. We have coaches’ tools that we just launched. And with DMN, the tech team has done an amazing job really building automation so we can attribute sales to our partners’ investment. So all in all, really exciting parts of the business.

And, Kate, I will just build on what Lauren said. The underlying drivers of the gross margin that we have talked about for some time now continue to remain in place in terms of the product that we have access to—not only just in 2026, but what we see in the pipeline—the work that our vertical brands team is doing as well as GameChanger and DMN. These are still the inherent drivers of the gross margin confidence that we have for 2026. We are balancing that in 2026 against the exciting opening of the sixth distribution center in 2026, so that is contemplated in our guidance expectation.

Your next question comes from the line of Christopher Horvers with JPMorgan. Please go ahead.

Thanks. Good morning. My first question for you, Ed, is what did you learn from Foot Locker and this 11-store test? Can you talk about how applicable the changes are to the rest of the chain? The 11 stores, were they more city center locations like Times Square versus suburban-based mall locations that people tend to associate with Foot Locker? What was the receptivity to running and brands like Hoka and On to that core Foot Locker customer relative to basketball? In the 200 locations that you are targeting by back-to-school, what is the commonality among these locations relative to the 11-store test that you targeted, and then the much larger chain?

Thanks, Chris. The 11-store test was really a broad-based test. We did some more urban stores. We did suburban stores. We pulled some high-volume stores. We obviously pulled some lower-volume stores, which is why we are not closing as many stores as we anticipated. So it was really a broad-based test on that original 11. The 10 in LA would be more urban stores that we have done. What was common to them is we put a common merchandise presentation theme across all of these banners, which really was to take out a lot of the unproductive inventory that was sitting on the wall that the consumer did not want, cleared up the wall. As I have used the phrase, the footwear wall was a run-on sentence. So we took that run-on sentence down, took roughly 30% of the choices out of the store, relaid out the wall with the key product, so the consumer can walk in and see what is important—whether it is an Air Force 1 in color, whether it is a new New Balance launch, whatever it might be. We have the ability to clearly communicate to the consumer what is new and what is the high-heat product. And when we did that, these comps have been extremely strong—strong enough that this is the game plan that we are going to roll out. Roughly 250 stores by back-to-school. Those 250 stores, again, will be a cross-section of stores. They will be urban stores. They will be suburban stores. They will be some mall stores. And we will take a look at this on a store-by-store basis, and it will be a great cross-section of the business again. We are also going to be doing this in Europe. We have a couple in Europe, and we are very pleased with the results we are seeing in Europe. We will be rolling out the Fast Break stores in Europe, and the 250 includes the US and Europe. If you think about it, we are pretty conservative. If we were not highly confident that this Fast Break concept would be highly successful, we would not be rolling out 250 of them by back-to-school. That should give everybody confidence that we have a game plan here and we have proven that it will work.

Thank you. That is very helpful. And then I guess a two-part follow-up. Traffic is always a red flag in retail, and it did turn negative in the core DICK'S business in the fourth quarter. I get the two-year stack math, but your ASP or your ticket is going to get harder as the year progresses. Presumably, there was some inflation from tariffs as well. So how should we think about looking at that traffic number going forward? As you think about running that two-year stack, how applicable are traffic headwinds earlier versus traffic rebounding later and ticket moderating?

Thanks, Chris. The transactions in Q4—again, on a two-year stack basis, if you look, they were positive. If you look at the full year, they were positive. We were up against such a strong comp from the year before that I think you have to take that into consideration. We have been driving strong basket and AUR, and that just speaks to our differentiated product assortment, really not due to inflation. It is due to the fact that we are increasingly getting access and allocation to really great products that are resonating with people. Looking ahead, our guidance projects 2% to 4% comps on top of the 4.5%. So we are not concerned about traffic or transactions.

Your next question comes from the line of Paul Lejuez with Citi. Please go ahead.

Curious on synergies, if you expect that number that you shared to grow past the medium term. Also curious how you are thinking about what is the medium term. And then second, kind of related perhaps, on Foot Locker. That business used to achieve $700,000,000 of operating income if you look prior to 2020—$700 million plus. I am curious how much progress you think you can make towards that level and over what period?

Paul, thanks for the question. Let me start with synergies. We have reiterated today that we continue to expect $100,000,000 to $125,000,000 over the medium term, and we continue to remain very confident. As you can imagine, we are six months into this transaction. We are working cross-functionally across both organizations, and the level of detail that the teams have created is fantastic. So as we learn more, we will definitely share if there are any updated expectations. As of today, we will reiterate the outlook that I had shared. In terms of what medium term means, there is a portion that is definitely in 2026 for the synergies that has been included in the guidance, and I would say the medium term would be maybe a couple of years after that. In terms of the $700,000,000 of operating income for Foot Locker, I think it is a little bit too early to be able to give a long-term outlook, but we feel really confident in what Ed talked about—the momentum that we have built, the focus that we have in returning this business to growth from the 1% to 3% comp that we have guided and returning this business back to profitability. So six months in, we are really enthusiastic about the underlying momentum as well as the team that is driving these results. We will share more in due course of time about the longer-term outlook.

Your next question comes from the line of Mike Baker with D.A. Davidson. Please go ahead.

Great. Thanks. Just on the Fast Break and improvement in Foot Locker and the profit trends, just a little more color on the pace throughout the year. Do we expect them to be negative in the first quarter and second quarter until the back-to-school improvement kicks in? Just wondering on the expectations of how Foot Locker progresses throughout the year.

Mike, I will say that we expect both the sales and profitability to be back-half weighted. As you can imagine, we said that the real inflection in this business will come from when we are able to source the buys effectively the way we wanted. That happens from the back-to-school timeframe. And as Ed referenced, the Fast Break stores being in position will also be during the back-to-school timeframe. So we expect comps to be back-half weighted, and we expect the profitability also to be second-half weighted. Keep in mind on profitability, we also will have the benefit of the synergies that will kick in into 2026.

Makes sense. Thanks. If I could completely switch gears for a follow-up—so maybe not really a follow-up—talk to us about agentic AI or how you are dealing with that. Do you think there has been any impact? Do you feel like you are well suited in that kind of environment? Just curious your view on how that works.

Thanks, Mike. We are absolutely looking into all aspects of artificial intelligence, including agentic. I think there are two opportunities in the way our teams are looking at it. There is the opportunity to make our teammates more efficient and to remove a lot of manual work. Examples of that: we have some MarTech technology that we are building that can remove a lot of the manual work that they are doing. We are using AI right now in terms of store labor forecasting. We have a new AI-enabled tool in our app, and we are able to make more custom recommendations. So across the board, inventory management and making sure regional relevancy is happening is all factored with artificial intelligence. However, if you look to the future and you look at agentic, I think the biggest unlock in terms of our athlete experience is for us to really lean into what we call our common purpose and find ways to bring the power of our expertise and all of our opinion and knowledge that we have of sports and enable that to be available to people as they are working in the new world. We are working on that. More to come, but that is a big focus—to take all of our data, all of our knowledge, our teammates’ learnings over the years and make that available for consumers. So more to come.

Your next question comes from the line of Joseph Civello with Truist. Please go ahead.

Hey, guys. Thanks so much for taking my questions here. I have one on the DICK'S Media Network. Can you talk about the opportunities to sort of expand that to Foot Locker and what that timeline might look like, even though I know it is probably longer dated?

It is a little premature. As you know, we are maniacally focused at the DICK'S business on the DICK'S business and the Foot Locker business maniacally focused on the Foot Locker business. Certainly, there are long-term opportunities here, but we are each executing our plays right now.

Got it. And maybe just a quick sort of mechanical question. You mentioned using the DICK'S Going, Going, Gone to clean out the garage. Can you talk about how that impacts the financials for each segment?

It actually helps. It gets rid of older, unproductive inventory, so it brings cash into the business, and it cleans up the store. We have done this on the DICK'S side, and we will expect to do it on the Foot Locker side. Cleaning up the store gives more room and space to be able to feature those newer products, the newer styles, that we can sell at basically full price. So it is very helpful to the margins. It is helpful to the sales, and it is helpful to the cash flow of the business.

Got it. And is that contemplated in the synergies?

That is not contemplated in the synergies. Our focus on synergies, like I said in my prepared remarks, is focused around the merchandising actions—primarily negotiations—as well as non-merch synergy negotiations.

We have time for one more question. And that question comes from the line of Cristina Fernandez with Telsey Advisory Group. Please go ahead.

Hi. Good morning. I had a couple of questions on the Foot Locker business. The negative 3.4% pro forma comp relative to the guidance for down mid- to high-single-digit—can you talk about what led to the better result? And then I also wanted to see if you could give a little bit more color on Foot Locker about the regions. I assume North America outperformed Europe. And whether the Fast Break merchandising test included work on some of the other banners like Champs or Kids Foot Locker, or those are just purely on the Foot Locker store fleet. Thanks.

The better performance at negative 3.4% versus what we had guided to was really a result of the Stripers and the team at Foot Locker really getting behind the whole idea of cleaning out the garage. They really wanted to clean out the garage. They wanted to get rid of that old inventory. They wanted to get the new product in. And they worked tirelessly to get rid of that product, and that helped drive better sales. We came in right in line from a margin rate standpoint. From a Foot Locker standpoint, by performance by region—North America and Europe—there was not a huge difference between how the two regions performed. I think that going forward, right now the US is a little bit ahead of Europe, but that is because we did more of the Fast Break stores in the US than we did in Europe. Europe is not very far behind. We are going to get Europe turned around also. We are pretty excited about what is going on in Europe. We brought in Matthew Barnes from Aldi to run this business. He has made some changes to his team. We have got a terrific team in Europe, and we could not be more confident in Matthew and his leadership to turn the whole international business around.

I would now like to turn the conference back over to Lauren Hobart, President and CEO, for closing comments.

Thank you all for your interest in DICK'S and in Foot Locker, and we will look forward to seeing you next time. To all our teammates and Stripers and Blue Shirts listening, thank you for all of your hard work. See you next quarter.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation and you may now disconnect.