Q2 sales grew 3.6% Y/Y to $3.22 billion, missing the analyst consensus of $3.23 billion.

Comparable store sales increased 1.8% versus a 5.1% decline a year ago.

Gross profit margin contracted 160 basis points Y/Y to 34.4%. The operating margin contracted 510 basis points to 9.7%, and operating income for the quarter fell 32.3% Y/Y to $311.8 million.

Adjusted EPS of $2.82, down 23% Y/Y, missed the analyst consensus of $3.81.

The company held $1.90 billion in cash and cash equivalents as of July 29, 2023. Total inventory at the end of Q2 fell by 5% Y/Y to $2.85 billion.

The retailer ended the quarter with 860 stores, with seven new House of Sport locations opening in Q2.

Dividend: The company's Board of Directors declared a quarterly dividend of $1.00 per share, payable in cash on September 29, 2023, to stockholders of record on September 15, 2023.

FY23 Outlook: DKS reduced the adjusted EPS outlook to $11.50-$12.30 from $12.90-$13.80 vs. the consensus of $13.49.

The company reiterated its comparable store sales outlook at flat to +2% growth and capital expenditure of $550 million - $600 million on a net basis.

Headcount cut: DKS cut positions at its customer support center on August 21, 2023, to streamline its overall cost structure.

DKS expects to incur severance expenses of about $20 million in Q3 2023 and cost savings from the action to be negated by strategic talent acquisitions in the coming 12 months.

Price Action: DKS shares are trading lower by 19.3% at $118.64 premarket on the last check Tuesday.