Sep 9, 2026 earnings call — Tariff refunds fund price cuts and growth moves
Company reported $1.6 billion in Q2 sales and reaffirmed full-year sales $6.23 billion to $6.36 billion.
Revenue $1.6B (est $1.6B) · EPS $2.31 (est $2.07) · Next-quarter revenue outlook $6.2B–$6.4B
Key quotes
"First, we're reinvesting the majority of the proceeds from the tariff refunds we received back into improved pricing for our customers."
"We remain on track to open up 22 to 24 stores this year."
"Credit card applications were up 15% during the quarter, with approval rates up over 900 basis points for the same time period."
Analyst Q&A 8
sales trend and timing this year
Q (Christopher Horvers · JPMorgan): They asked how sales will flow in the back half of the year, given new products, the credit card, new stores, and tax holiday timing. They also asked how the back-to-school and tax holiday shift hurt the second quarter.
A: Management said the tax-free shifts in four states hurt the quarter and without them comps would have been essentially flat. They expect back-half cadence to follow first-half trends, with midpoint guidance implying roughly a 1% comp and fairly consistent Q3 to Q4 performance. They listed drivers: new stores entering the comp, credit card relaunch tied to loyalty, pricing reinvestment, new brands (HOKA, ChicknLegs, Ariat), RFID, and better pricing versus last year.
"In terms of cadence throughout the back half of the year, the midpoint of the guidance implies roughly the continuation of the trend we saw in the first half." — Steven Lawrence (CEO)
customer income cohorts and promotion response
Q (Jeffrey Lick · Stephens): He asked how this company differed from a weaker competitor by merchandise or geography. He also asked for more detail on customer income groups, especially under-$50K and above-$100K.
A: Management said their assortment is more diverse across footwear, outdoor, grilling, coolers, shooting sports, fishing and camping, which helps insulate results and sometimes limits upside in footwear cycles. They said under-$50K traffic fell high single digits and that lower-income customers shop closer to need and respond to deeper promotions; customers above $100K show mid- to high-single-digit traffic gains and buy broadly across the store.
"We are seeing strong reaction when we do lean into promotions." — Steven Lawrence (CEO)
impact of World Cup and sales mix
Q (Katharine McShane · Goldman Sachs): They asked whether World Cup merchandise cannibalized sales, how much it lifted comps, and what initiatives will help when they lap it next year. They also asked to quantify traffic versus price effects.
A: Management said the World Cup essentially matched their plan and was not fully additive because some customers shifted purchases and Oklahoma City's local championship dampened the effect. To lap it next year they expect some offset from U.S. team interest, better localization of licensed merchandise, sharper pricing on private brands, and improved sourcing to mitigate tariffs. They added that ticket was up 4.5% with AURs up and transactions down about 2%.
"From a total basket standpoint our ticket was up 4.5%." — Earl Ford (CFO)
sustaining positive comps and store openings
Q (Simeon Gutman · Morgan Stanley): He asked whether they can sustain positive comps going forward using new store waterfall, recent inflection, and product newness. He also asked about customer cohort percentages and whether stores in less competitive areas comp differently.
A: Management said the midpoint of guidance implies about a 1% comp but they give a range because the consumer backdrop is uncertain. They reiterated positives: credit card/loyalty, price reinvestment, hard goods strength, HOKA and other new brands, strong dot-com comps, RFID, and new stores targeted to mid-sized underserved markets. They said customers over $100,000 are the largest and fastest growing cohort (~pushing 40%), under $50,000 are about 30% and shrinking, and new stores in targeted markets show outsized comp growth and a 50 basis point tailwind to comps.
"We've got the credit card loyalty program, which we're one quarter deep into, and it's driving really great results." — Steven Lawrence (CEO)
gross margin outlook and tariff effects
Q (Michael Lasser · UBS): He asked if gross margin outlook changed after Q2 reinvestment and whether higher clearance and promotional pressure will hurt margin. He also asked if gross margin should be expected to decline in 2027.
A: Management said fall gross margin is modeled roughly flat within the annual guidance, with shrink and lower tariff rates as tailwinds and pricing reinvestment and fuel as headwinds. They said the 440 basis points of net gross margin impact in Q2 from tariff refunds is non-recurring and they are not planning for gross margin to regress in FY '27; they also cited credit card revenue and retail media as future margin contributors.
"Embedded within that annual guidance is for fall gross margin roughly flat." — Earl Ford (CFO)
cost leverage and SG&A drivers
Q (John Heinbockel · Guggenheim Partners): He asked how the company achieved large base expense leverage and where the savings came from, and whether that level is sustainable.
A: Management said year-to-date SG&A is 20 basis points levered versus a year ago, and in Q2 there was a 20 basis point deleverage with tariff refunds causing additional pressure. They said base leverage (about 130 basis points) came from corporate labor and recruiting, maintenance and repairs, professional fees, lower safety and workers comp, and managed healthcare, and they view continued leverage as possible with low single-digit comps though 130 bps may not be sustainable on negative comps.
"So year-to-date, SG&A is 20 basis point levered from a year ago." — Earl Ford (CFO)
store layout changes and SKU strategy
Q (Gregory Melich · Evercore): He asked how store space is being reallocated for new shop-in-shops and brands like HOKA, whether areas will expand or contract, and if SKU count will change.
A: Management said they are focusing on localization and will shift floor space toward trending categories, using new-store footprints and about 30 to 40 remodels per year to reallocate space. They plan ongoing adjustments to feature high-demand items. They also said they are reducing breadth to invest in depth, improving in-stock positions while investing in newness.
"We're going to be remodeling roughly 30 to 40 stores a year moving forward." — Steven Lawrence (CEO)
pricing gap versus peers and assortment tiers
Q (Jonathan Matuszewski · Jefferies): He asked if pricing gaps versus peers will revert to pre-refund levels after reinvestment, and how the mix across good/better/best will change with new brands.
A: Management said their pricing gaps versus peers have stayed consistent this year and last and that select price increases caused demand drop-offs at key price points, so they reversed some prices back to natural price points. On assortment, they said they now have about 25% to 30% of assortment in the best tier, up from near zero historically, but they will keep the core good price points and not abandon value.
"I would tell you that our pricing gaps relative to our peers has remained consistent throughout this year and the back half of last year." — Steven Lawrence (CEO)