Foot Locker is slowly returning to growth, but the former sneaker store’s costly turnaround is still weighing on its parent company’s bottom line, Dick’s Sporting Goodswhile the company published a shortfall on Wednesday.
During the quarter ended May 2, Dick’s incurred $96.5 million in acquisition-related charges. That includes $53.8 million for merger and acquisition costs such as severance and store closings, and $42.7 million to clear sales inventory.
These expenses contributed to a shortfall in Dick’s bottom line, as superior results exceeded expectations.
Meanwhile, Foot Locker reported comparable sales growth of 0.6%, the first time the metric has increased since the end of fiscal 2024, while Dick’s namesake stores saw comparable sales climb 6%, leading to a combined growth figure of 4.1%. At Foot Locker US, where Dick’s has focused much of its turnaround attention, comparable sales increased 6.4%.
Here’s how the sporting goods store performed in its fiscal first quarter compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $2.90 adjusted vs. $2.92 expected
- Income: $5.17 billion versus $5.09 billion expected
Shares of the company fell nearly 2% in premarket trading.
During the quarter, Dick’s reported net income of $319.82 million, or $3.54 per share, compared with $264.29 million, or $3.24 per share, a year earlier. Accounting for items such as acquisition costs and litigation, Dick’s earned $2.90 per share.
Sales reached $5.17 billion, up about 63% from $3.17 billion a year earlier, thanks to the addition of Foot Locker to its business.
At a time when sport is at the center of culture, Dick’s has no trouble attracting customers. But maintaining profitability expectations is proving more difficult.
Following its first quarter results, Dick’s tightened its 2026 comparable sales growth guidance for Dick’s and Foot Locker. He now expects Dick’s business to grow between 2.5% and 4%, compared to 2% to 4%, and Foot Locker’s business to grow between 1.5% and 3%, compared to 1% to 3% previously.
Meanwhile, Dick’s lowered its consolidated operating income and profit forecast for 2026. It now expects consolidated operating income to be between $1.69 billion and $1.81 billion, down from a previous range of $1.71 billion to $1.83 billion.
It now expects 2026 earnings per share to be between $13.27 and $14.27, up from $13.70 to $14.70. He continues to expect adjusted earnings per share to be between $13.50 and $14.50, beating expectations of a high of $14.32 per share, according to LSEG.
The group expects net sales of between $22.1 billion and $22.4 billion, roughly in line with expectations of $22.4 billion, according to LSEG.
The company also raised its adjusted operating profit forecast to a range of $1.71 billion to $1.83 billion, up from $1.68 billion to $1.81 billion previously.
Since acquiring Foot Locker, Dick’s has sought to leverage its store breadth and unique customer base, while doing the hard work of closing underperforming stores, reworking assortment and changing store formats.
The company previously launched an 11-store pilot program called “Fast Break” that tests product changes and how they appear in stores, where Foot Locker makes the majority of its revenue. The pilot has been expanded to approximately 100 stores worldwide and these stores are experiencing comparable double-digit sales growth and significant improvements in merchandise margin.
As the school year begins, the pilot will expand to 250 stores, with more additions planned before the holiday shopping season.
At the end of the quarter, Foot Locker’s total business, including Champs, WSS and Kids Foot Locker, consisted of 2,483 stores worldwide.