Key Takeaways
- Dick’s Sporting Goods missed sales estimates in the third quarter and said it plans to close an unspecified number of Foot Locker stores.
- Dick’s deal to acquire Foot Locker closed in September.
Foot Locker’s new owner is doing some straightening up in the sneaker aisle.
Dick’s Sporting Goods (DKS) announced plans to buy Foot Locker in May, and the deal closed in September. Analysts said that Foot Locker would likely benefit from being owned by a “highly capable and efficient operator” like Dick’s, singling out brands that collaborate heavily with Dick’s and Foot Locker already—like Nike (NKE),—as potential winners in the deal.
Dick’s Executive Chairman Ed Stack on Tuesday said the company is working with new Foot Locker management to take “decisive actions to ‘clean out the garage’ by clearing unproductive inventory, closing underperforming stores and laying the foundation for a fresh start in 2026.”
Why This Matters to Investors
Dick’s acquisition of Foot Locker earlier closed in September. Now that it’s under the company’s umbrella, management is looking to clean things up, closing underperforming stores among other things.
The sporting-goods-and-apparel retailer also reported third-quarter revenue that fell short of estimates. Dick’s said it had $4.17 billion in revenue in the third quarter, up 36% year-over-year, but nearly half a billion dollars below the analyst consensus compiled by Visible Alpha.
Adjusted earnings per share for just the Dick’s business were $2.78, roughly in line with estimates, but including the impact of expenses related to the Foot Locker acquisition dragged standard EPS down to $2.07. Comparable store sales for Dick’s grew 5.7% from the same time last year, better than analysts had expected.
Shares of Dick’s were down nearly 3% in recent trading. They have lost about 12% of their value since the start of the year.
For the Dick’s segment of its business, the retailer lifted its full-year sales and EPS outlook to ranges of $13.95 billion to $14.0 billion and $14.25 to $14.55, respectively, up from previous ranges of $13.75 billion to $13.95 billion and $13.90 to $14.50.
Dick’s also lifted its comparable sales growth outlook, and said it will add Foot Locker stores to its comparable sales calculations in the fourth quarter of 2026, when the closing of the transaction is over a year old.