10-Q 1 dks-20221029.htm 10-Q dks-20221029
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 29, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                    .
 
Commission File No. 001-31463
 DICK’S SPORTING GOODS, INC.
(Exact name of registrant as specified in its charter)
Delaware16-1241537
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
 
345 Court Street, Coraopolis, PA 15108
(Address of Principal Executive Offices)
 
(724) 273-3400
(Registrant’s Telephone Number, including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of Each Exchange on which Registered
Common Stock, $0.01 par valueDKSThe New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ No o
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes þ No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  No
 
As of November 18, 2022, DICK’S Sporting Goods, Inc. had 59,840,863 shares of common stock, par value $0.01 per share, and 23,570,633 shares of Class B common stock, par value $0.01 per share, outstanding.
1


2

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS 

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)

 13 Weeks Ended39 Weeks Ended
 October 29,
2022
October 30,
2021
October 29,
2022
October 30,
2021
Net sales
$2,958,861 $2,747,647 $8,771,485 $8,941,208 
Cost of goods sold, including occupancy and distribution costs1,946,438 1,691,071 5,652,966 5,488,928 
GROSS PROFIT1,012,423 1,056,576 3,118,519 3,452,280 
Selling, general and administrative expenses
679,747 631,943 1,952,408 1,880,505 
Pre-opening expenses
7,212 4,765 13,948 12,545 
INCOME FROM OPERATIONS325,464 419,868 1,152,163 1,559,230 
Interest expense
26,131 13,789 77,267 40,971 
Other (income) expense(4,826)(1,748)11,559 (15,893)
INCOME BEFORE INCOME TAXES304,159 407,827 1,063,337 1,534,152 
Provision for income taxes75,703 91,314 255,820 360,374 
NET INCOME$228,456 $316,513 $807,517 $1,173,778 
EARNINGS PER COMMON SHARE:  
Basic
$2.94 $3.79 $10.55 $13.93 
Diluted
$2.45 $2.78 $8.17 $10.70 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  
Basic
77,789 83,537 76,527 84,266 
Diluted
96,681 113,664 101,900 109,648 


See accompanying notes to unaudited consolidated financial statements.
3

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(Unaudited)

 13 Weeks Ended39 Weeks Ended
 October 29,
2022
October 30,
2021
October 29,
2022
October 30,
2021
NET INCOME$228,456 $316,513 $807,517 $1,173,778 
OTHER COMPREHENSIVE (LOSS) INCOME:  
Foreign currency translation adjustment, net of tax(277)15 (280)58 
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME(277)15 (280)58 
COMPREHENSIVE INCOME$228,179 $316,528 $807,237 $1,173,836 
 

See accompanying notes to unaudited consolidated financial statements.


4

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands) 
(Unaudited)
October 29,
2022
January 29,
2022
October 30,
2021
ASSETS  
CURRENT ASSETS:  
Cash and cash equivalents$1,437,997 $2,643,205 $1,372,892 
Accounts receivable, net87,191 68,263 89,479 
Income taxes receivable4,082 1,978 683 
Inventories, net3,361,057 2,297,609 2,490,438 
Prepaid expenses and other current assets96,135 95,601 92,673 
Total current assets4,986,462 5,106,656 4,046,165 
Property and equipment, net1,342,786 1,319,681 1,314,567 
Operating lease assets2,025,149 2,044,819 2,070,135 
Intangible assets, net84,946 86,767 87,195 
Goodwill245,857 245,857 245,857 
Deferred income taxes58,945 35,024 42,862 
Other assets212,455 202,872 192,498 
TOTAL ASSETS$8,956,600 $9,041,676 $7,999,279 
LIABILITIES AND STOCKHOLDERS' EQUITY  
CURRENT LIABILITIES:  
Accounts payable$1,473,424 $1,281,322 $1,399,716 
Accrued expenses500,246 620,143 522,010 
Operating lease liabilities487,119 480,318 478,674 
Income taxes payable32,664 13,464 28,430 
Deferred revenue and other liabilities268,677 317,433 239,472 
Total current liabilities2,762,130 2,712,680 2,668,302 
LONG-TERM LIABILITIES:   
Revolving credit borrowings   
Senior notes due 2032 and 20521,482,110 1,481,443  
       Convertible senior notes due 2025152,006 449,287 441,186 
Long-term operating lease liabilities2,026,774 2,099,146 2,135,515 
Other long-term liabilities156,408 197,534 223,459 
Total long-term liabilities3,817,298 4,227,410 2,800,160 
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:  
Common stock570 520 586 
Class B common stock236 236 237 
Additional paid-in capital1,399,694 1,488,834 1,476,701 
Retained earnings4,682,663 3,956,602 3,647,621 
Accumulated other comprehensive (loss) income (362)(82)9 
Treasury stock, at cost(3,705,629)(3,344,524)(2,594,337)
Total stockholders' equity2,377,172 2,101,586 2,530,817 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$8,956,600 $9,041,676 $7,999,279 
See accompanying notes to unaudited consolidated financial statements.
5

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)
(Unaudited)
       Accumulated  
   Class BAdditional Other  
 Common StockCommon StockPaid-InRetainedComprehensiveTreasury 
 SharesDollarsSharesDollarsCapitalEarningsLossStockTotal
BALANCE, January 29, 202251,989 $520 23,621 $236 $1,488,834 $3,956,602 $(82)$(3,344,524)$2,101,586 
Adjustment for cumulative effect from change in accounting principle (ASU 2020-06)— — — — (118,961)34,232 — — (84,729)
Exchange of convertible senior notes due 2025 and partial unwind of convertible bond hedge and warrants1,833 18 — — 3,793 — — — 3,811 
Exercise of stock options389 4 — — 12,661 — — — 12,665 
Restricted stock vested933 9 — — (9)— — —  
Minimum tax withholding requirements(332)(3)— — (33,284)— — — (33,287)
Net income— — — — — 260,559 — — 260,559 
Stock-based compensation— — — — 15,177 — — — 15,177 
Foreign currency translation adjustment, net of taxes of $2
— — — — — — (7)— (7)
Purchase of shares for treasury(417)(4)— — — — — (42,223)(42,227)
Cash dividend declared, $0.4875 per common share
— — — — — (38,942)— — (38,942)
BALANCE, April 30, 202254,395 $544 23,621 $236 $1,368,211 $4,212,451 $(89)$(3,386,747)$2,194,606 
Exchange of convertible senior notes due 2025 and partial unwind of convertible bond hedge and warrants1,675 17 — — 5,750 — — — 5,767 
Exercise of stock options52 1 — — 1,331 — — — 1,332 
Restricted stock vested47  — —  — — —  
Minimum tax withholding requirements(13) — — (1,860)— — — (1,860)
Net income— — — — — 318,502 — — 318,502 
Stock-based compensation— — — — 11,517 — — — 11,517 
Foreign currency translation adjustment, net of taxes of ($1)
— — — — — — 4 — 4 
Purchase of shares for treasury(3,945)(40)— — — — — (318,882)(318,922)
Cash dividend declared, $0.4875 per common share
— — — — — (37,437)— — (37,437)
BALANCE, July 30, 202252,211 $522 23,621 $236 $1,384,949 $4,493,516 $(85)$(3,705,629)$2,173,509 
Exchange of convertible senior notes due 2025 and partial unwind of convertible bond hedge and warrants4,312 43 — — 5,989 — — — 6,032 
Exchange of Class B common stock for common stock50  (50) — — — —  
Exercise of stock options213 2 — — 5,954 — — — 5,956 
Restricted stock vested282 3 — — (3)— — —  
Minimum tax withholding requirements(74) — — (8,080)— — — (8,080)
Net income— — — — — 228,456 — — 228,456 
Stock-based compensation— — — — 10,885 — — — 10,885 
Foreign currency translation adjustment, net of taxes of $88
— — — — — — (277)— (277)
Cash dividend declared, $0.4875 per common share
— — — — — (39,309)— — (39,309)
BALANCE, October 29, 202256,994 $570 23,571 $236 $1,399,694 $4,682,663 $(362)$(3,705,629)$2,377,172 

See accompanying notes to unaudited consolidated financial statements.
6

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Continued)
(in thousands)
(Unaudited)
       Accumulated  
   Class BAdditional Other  
 Common StockCommon StockPaid-InRetainedComprehensiveTreasury 
 SharesDollarsSharesDollarsCapitalEarnings(Loss) IncomeStockTotal
BALANCE, January 30, 202161,195 $612 23,736 $237 $1,442,298 $3,064,702 $(49)$(2,168,266)$2,339,534 
Exercise of stock options297 3 — — 12,330 — — — 12,333 
Restricted stock vested791 8 — — (8)— — —  
Minimum tax withholding requirements(237)(3)— — (18,598)— — — (18,601)
Net income— — — — — 361,756 — — 361,756 
Stock-based compensation— — — — 12,870 — — — 12,870 
Foreign currency translation adjustment, net of taxes of ($20)
— — — — — — 64 — 64 
Purchase of shares for treasury(1,030)(10)— — — — — (76,831)(76,841)
Cash dividend declared, $0.3625 per common share
— — — — — (32,391)— — (32,391)
BALANCE, May 1, 202161,016 $610 23,736 $237 $1,448,892 $3,394,067 $15 $(2,245,097)$2,598,724 
Exchange of Class B common stock for common stock40  (40) — — — —  
Exercise of stock options189 2 — — 8,313 — — — 8,315 
Restricted stock vested31 1 — — (1)— — —  
Minimum tax withholding requirements(10) — — (1,531)— — — (1,531)
Net income— — — — — 495,509 — — 495,509 
Stock-based compensation— — — — 12,544 — — — 12,544 
Foreign currency translation adjustment, net of taxes of $6
— — — — — — (21)— (21)
Purchase of shares for treasury(808)(8)— — — — — (75,838)(75,846)
Cash dividend declared, $0.3625 per common share
— — — — — (32,319)— — (32,319)
BALANCE, July 31, 202160,458 $605 23,696 $237 $1,468,217 $3,857,257 $(6)$(2,320,935)$3,005,375 
Exercise of stock options114 1 — — 4,281 — — — 4,282 
Restricted stock vested305 3 — — (3)— — —  
Minimum tax withholding requirements(80)(1)— — (9,760)— — — (9,761)
Net income— — — — — 316,513 — — 316,513 
Stock-based compensation— — — — 13,966 — — — 13,966 
Foreign currency translation adjustment, net of taxes of $(4)
— — — — — — 15 — 15 
Purchase of shares for treasury(2,173)(22)— — — — — (273,402)(273,424)
Cash dividends declared, $5.9375 per common share
— — — — — (526,149)— — (526,149)
BALANCE, October 30, 202158,624 $586 23,696 $237 $1,476,701 $3,647,621 $9 $(2,594,337)$2,530,817 

See accompanying notes to unaudited consolidated financial statements.
7

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
39 Weeks Ended
 October 29,
2022
October 30,
2021
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income$807,517 $1,173,778 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization250,522 237,666 
Amortization of deferred financing fees and debt discount3,558 22,693 
Deferred income taxes5,344 8,613 
Stock-based compensation37,579 39,380 
Other, net15,879  
Changes in assets and liabilities:  
Accounts receivable(36,699)(20,655)
Inventories(1,063,448)(536,870)
Prepaid expenses and other assets(936)(7,995)
Accounts payable178,633 194,084 
Accrued expenses(94,177)(13,918)
Income taxes payable / receivable19,023 (6,854)
Construction allowances provided by landlords36,100 27,677 
Deferred revenue and other liabilities(58,613)(30,219)
Operating lease assets and liabilities(64,663)(80,734)
Net cash provided by operating activities35,619 1,006,646 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Capital expenditures(274,307)(231,087)
Proceeds from sale of other assets14,261 9,671 
Deposits and other investing activities
(32,885)(19,130)
Net cash used in investing activities(292,931)(240,546)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Principal paid in connection with exchange of convertible senior notes due 2025(420,558) 
Payments on finance lease obligations(548)(553)
Proceeds from exercise of stock options19,953 24,930 
Minimum tax withholding requirements(43,227)(29,893)
Cash paid for treasury stock(392,882)(426,111)
Cash dividends paid to stockholders(123,823)(567,245)
Increase (decrease) in bank overdraft13,469 (52,461)
Net cash used in financing activities(947,616)(1,051,333)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS(280)58 
NET DECREASE IN CASH AND CASH EQUIVALENTS(1,205,208)(285,175)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD2,643,205 1,658,067 
CASH AND CASH EQUIVALENTS, END OF PERIOD$1,437,997 $1,372,892 
Supplemental disclosure of cash flow information:  
Accrued property and equipment$41,773 $44,545 
Cash paid for interest$41,441 $21,870 
Cash paid for income taxes$232,705 $364,875 
 

See accompanying notes to unaudited consolidated financial statements.
8

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Basis of Presentation
DICK’S Sporting Goods, Inc. (together with its subsidiaries, referred to as “the Company”, “we”, “us” and “our” unless specified otherwise) is a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-quality sports equipment, apparel, footwear and accessories through a blend of dedicated teammates, in-store services and unique specialty shop-in-shops. In addition to DICK’S Sporting Goods stores, the Company also owns and operates Golf Galaxy, Field & Stream, Public Lands and Going Going Gone! specialty concept stores, and offers its products both online and through its mobile apps. The Company also owns and operates DICK’S House of Sport and Golf Galaxy Performance Center, as well as GameChanger, a youth sports mobile app for scheduling, communications, live scorekeeping, and video streaming. When used in this Quarterly Report on Form 10-Q, unless the context otherwise requires or otherwise specifies, any reference to “year” is to the Company’s fiscal year.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the requirements for Quarterly Reports on Form 10-Q and do not include all the disclosures normally required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The interim consolidated financial statements are unaudited and have been prepared on the same basis as the annual audited consolidated financial statements. In the opinion of management, such unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the interim financial information. 
The unaudited interim financial information should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 29, 2022 as filed with the Securities and Exchange Commission on March 23, 2022. Operating results for the 13 and 39 weeks ended October 29, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending January 28, 2023 or any other period.
Recently Adopted Accounting Pronouncement
Convertible Instruments
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40),” which removes the separation models for convertible debt with cash conversion or beneficial conversion features. ASU 2020-06 also requires the application of the if-converted method for calculating earnings per diluted share, under which the Company must assume that any conversion of its convertible senior notes due 2025 (the “Convertible Senior Notes”) will be satisfied entirely in common stock.
The Company adopted ASU 2020-06 on the first day of fiscal 2022 using the modified retrospective approach, which resulted in the following adjustments to the Consolidated Balance Sheet (in millions):
Last Day of Fiscal 2021Adoption of ASU 2020-06First Day of Fiscal 2022
Balance sheet line item
Convertible senior notes due 2025$449.3 $114.0 $563.3 
Net deferred tax assets$35.0 $29.3 $64.3 
Additional paid-in capital$1,488.8 $(119.0)$1,369.8 
Retained earnings$3,956.6 $34.2 $3,990.8 

9

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Following the adoption of ASU 2020-06, the embedded conversion feature of the Convertible Senior Notes is no longer separately presented within stockholders’ equity, eliminating the non-cash debt discount. Accordingly, the Company’s effective interest rate on the Convertible Senior Notes decreased from 11.6% to 3.9% upon adoption, resulting in a $20.1 million reduction in non-cash interest expense for the 39 weeks ended October 29, 2022 as compared to the same prior year period. The Company anticipates that fiscal 2022 earnings will not include $27.4 million of pre-tax non-cash interest expense that was incurred in fiscal 2021 as a result of the adoption of ASU 2020-06.
Despite the Company’s intention to settle the principal amount of the Convertible Senior Notes in cash, the application of the if-converted method requires earnings per diluted share to reflect that the Convertible Senior Notes will be settled entirely in shares upon conversion. As of October 29, 2022, approximately 4.8 million shares underlie the Convertible Senior Notes, which provides the basis for earnings per diluted share. The Company used the treasury stock method prior to adoption of ASU 2020-06, which allowed the Company to assume that the principal amount of the Convertible Senior Notes would be paid in cash. The impact of adoption was not material to earnings per diluted share.
Recently Issued Accounting Pronouncements
Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate (“LIBOR”). The amendments in this ASU can be applied anytime between the first quarter of fiscal 2020 and the fourth quarter of fiscal 2022 and apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The Company’s primary association with LIBOR was through interest rates applicable to loans under its former revolving credit facility, which was terminated in January 2022 and replaced with a new revolving credit facility that uses an adjusted secured overnight financing rate (“SOFR”). Accordingly, the impact of ASU 2020-04 on the Company's financial statements and related disclosures is not expected to be significant.

Supplier Finance Programs
In September 2022, the FASB issued ASU 2022-04, “Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” which requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. The amendments in this ASU are effective for the first quarter of 2023, except for the amendment on roll-forward information, which is effective for the first quarter of 2024, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this accounting standard will have on its financial disclosures.

2. Earnings Per Common Share
Basic earnings per common share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed based on the weighted average number of shares of common stock outstanding, plus the effect of dilutive potential common shares, which include shares the Company could be obligated to issue from its Convertible Senior Notes and warrants, and stock-based awards, such as stock options and restricted stock. Dilutive potential common shares are excluded from the computation of earnings per share if their effect is anti-dilutive.
For all periods presented, dilutive potential common shares for the Company’s stock-based awards and warrants were determined using the treasury stock method. For the 13 and 39 weeks ended October 30, 2021, the dilutive effect of the Convertible Senior Notes was calculated using the treasury stock method; however, upon the adoption of ASU 2020-06, the Company was required to calculate diluted earnings per common share using the if-converted method, which was applied to the 13 and 39 weeks ended October 29, 2022. See Note 1 – Description of Business and Basis of Presentation for further discussion.
10

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


The computations for basic and diluted earnings per common share were as follows for the periods presented (in thousands, except per share data):
13 Weeks Ended39 Weeks Ended
October 29,
2022
October 30,
2021
October 29,
2022
October 30,
2021
Numerator:
Numerator for basic earnings per common share - Net income$228,456 $316,513 $807,517 $1,173,778 
Effect of dilutive securities
Interest expense associated with Convertible Senior Notes, net of tax8,472  24,673  
Numerator for diluted earnings per common share - Net income after the effect of dilutive securities$236,928 $316,513 $832,190 $1,173,778 
Denominator:
Weighted average common shares outstanding - basic
77,789 83,537 76,527 84,266 
Dilutive effect of stock-based awards
5,120 6,791 5,357 6,498 
Dilutive effect of warrants4,947 10,542 6,754 7,988 
Dilutive effect of Convertible Senior Notes8,825 12,794 13,262 10,896 
Weighted average common shares outstanding - diluted
96,681 113,664 101,900 109,648 
Earnings per common share:
Basic$2.94 $3.79 $10.55 $13.93 
Diluted$2.45 $2.78 $8.17 $10.70 
Stock-based awards excluded from diluted shares 1 185 55 
The dilutive effect of the Convertible Senior Notes included 6.2 million and 12.8 million shares for the 13 weeks ended October 29, 2022 and October 30, 2021, respectively, and 8.9 million and 10.9 million shares for the 39 weeks ended October 29, 2022 and October 30, 2021, respectively, that are designed to be offset at settlement by shares delivered from the bond hedge purchased by the Company. The shares provided by the bond hedge are anti-dilutive; accordingly, they are not treated as a reduction to diluted weighted average shares outstanding for any periods presented. In addition, the dilutive effect of the Convertible Senior Notes for the 13 and 39 weeks ended October 29, 2022 included approximately 2.6 million and 4.4 million shares, respectively, related to the principal amount of the Convertible Senior Notes, which the Company intends to settle in cash.

3. Fair Value Measurements
Accounting Standard Codification (“ASC”) 820, “Fair Value Measurement and Disclosures,” outlines a valuation framework and creates a fair value hierarchy for assets and liabilities as follows:
Level 1:  Observable inputs such as quoted prices in active markets;
Level 2:  Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3:  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop
its own assumptions.
Recurring
The Company measures its deferred compensation plan assets held in trust at fair value on a recurring basis using Level 1 inputs. Such assets consist of investments in various mutual funds made by eligible individuals as part of the Company’s deferred compensation plans. As of October 29, 2022, January 29, 2022 and October 30, 2021, the fair value of the Company’s deferred compensation plans was $128.8 million, $150.8 million, and $150.7 million, respectively, as determined by quoted prices in active markets.
11

DICK’S SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


The Company discloses the fair value of its senior notes due 2032 and 2052 and Convertible Senior Notes using Level 2 inputs, which are based on quoted prices for similar or identical instruments in inactive markets, as follows (in millions):
October 29, 2022January 29, 2022October 30, 2021
Carrying ValueFair ValueCarrying ValueFair ValueCarrying ValueFair Value
Senior notes due 2032$742.2 $571.7 $741.7 $733.1 $ $ 
Senior notes due 2052$739.9 $461.4 $739.7 $711.3 $ $ 
Convertible Senior Notes$152.0 $559.5 $449.3 $2,016.3 $441.2 $2,188.0 
Prior to the adoption of ASU 2020-06, the carrying value of the Convertible Senior Notes excluded amounts classified within additional paid-in capital and any unamortized discounts as of January 29, 2022 and October 30, 2021. See Note 1 – Description of Business and Basis of Presentation for further information.
Due to their short-term nature, the fair value of cash and cash equivalents, accounts receivable, accounts payable and certain other liabilities approximated their carrying values at October 29, 2022, January 29, 2022, and October 30, 2021.
Nonrecurring
Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis may include property and equipment, operating lease assets, goodwill and other intangible assets, equity and other assets. These assets are required to be assessed for impairment when events or circumstances indicate that the carrying value may not be recoverable, and at least annually, for goodwill and indefinite-lived intangible assets. In the event that an impairment is required, the asset is adjusted to fair value, using Level 3 inputs.

4. Leases
The Company leases substantially all of its stores,