Dick's Sporting Goods Inc. (NYSE:DKS) Q1 2020 Earnings Conference Call - Final Transcript
Jun 02, 2020 • 10:00 am ET
Edward W. Stack
the safety and welfare of our teammates, athletes and communities, and our response to the current health crisis was no exception. This is why on March 18 we supported the nationwide efforts to minimize the spread of the virus and temporarily closed our stores to the public. To take care of our teammates, we invested $34 million in the first quarter across a number of compensation and safety measures. Beginning in mid-March through the balance of the first quarter, from a business standpoint, we focused nearly exclusively on managing for liquidity to ensure we came through this crisis in a strong financial position. We acted quickly and decisively to reduce, defer and eliminate cash outflows, and we maximized cash inflows through our e-commerce business.
To fortify our balance sheet and provide maximum financial flexibility, we exercised the accordion feature on a revolving credit facility to increase our borrowing capacity to $1.855 billion, and we issued convertible senior notes that added over $500 million of net proceeds to our cash position. As a result of these actions, I am pleased to report at the end of the first quarter, with cash and cash equivalents of approximately $1.5 billion, and we feel very good about our liquidity.
Throughout the store closures, we continued to serve our athletes online and through our mobile apps. Our e-commerce sales were tremendous, increasing more than 200% since we closed our stores through the end of the first quarter and notably contributing to our strong liquidity position. Importantly, these strong online results have continued into the second quarter even in those markets where our stores have reopened. A key part of this success online is our new curbside pickup service. Under Lauren's leadership, our stores, e-commerce and technology teams came together and launched this new initiative across most of the country within a matter of days. Lauren will cover this in greater detail during her remarks.
As for our stores, beginning in mid-April, we started to reopen where permitted in accordance with federal, state and local guidelines. As at the end of May, approximately 80% of our stores have reopened to the public and we've been pleased with the early results.
Although the business environment of 2020 remains uncertain, DICK's Sporting Goods is in a position of strength. We believe coming out of this crisis, health and fitness will become even more important to the customer. As the leader in sporting goods retail sector, our relationships with our key brands have never been stronger, and we are in a great place to support this demand. Our experienced management team has a history of successfully navigating difficult market cycles, and remains fully committed to managing our business with a long-term view. Perhaps most importantly, our balance sheet is strong, and due to the actions we'd taken when the pandemic first hit, we have enhanced liquidity to emerge from this crisis in even a stronger competitive position. Now, with the confidence in our liquidity and our stores reopening, we