Foot Locker is slowly returning to growth, but the pricey turnaround of the flagship sneaker store still worries its parent company. Dick’s Sporting Goods‘ important, as the company posted an earnings miss on Wednesday.
In the three months ended May 2, Dick received $96.5 million in acquisition-related charges. That includes $53.8 million in merger and acquisition costs such as severance and store closings, and $42.7 million in inventory write-offs.
Those costs contributed to Dick’s significant top-line miss, as top-line results exceeded expectations.
Meanwhile, Foot Locker achieved 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 increase 6%, leading to a combined growth figure of 4.1%. At Foot Locker US, where Dick’s is most focused on its turnaround, comparable sales grew 6.4%.
Here’s how the sporting goods store performed in its first fiscal quarter compared to Wall Street’s expectations, based on a survey of LSEG analysts:
- Earnings per share: $2.90 adjusted vs. $2.92 expected
- Net worth: $5.17 billion compared to $5.09 billion expected
The company’s shares were down about 5% in market trading.
During the quarter, Dick’s earned net income of $319.82 million, or $3.54 per share, compared with $264.29 million, or $3.24 per share, last year. Adjusting for things like acquisition and litigation costs, Dick’s earned $2.90 per share.
Sales rose to $5.17 billion, up nearly 63% from $3.17 billion last year, as it added Foot Locker to its business.
In an age where sports are at the center of culture, Dick’s has little trouble attracting customers. But maintaining profitability expectations has proven a major challenge.
Following first-quarter results, Dick’s strengthened its 2026 guidance for comparable sales growth at both Dick’s and Foot Locker. It now expects Dick’s to grow between 2.5% and 4%, up from 2% to 4%, and expects Foot Locker to grow between 1.5% and 3%, up from 1% to 3% previously.
Meanwhile, Dick’s lowered its guidance for 2026 consolidated operating income and dividends. It now expects consolidated operating income to be between $1.69 billion and $1.81 billion, down from the 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, down from $13.70 to $14.70. It continues to expect adjusted earnings per share to be between $13.50 and $14.50, beating expectations for a high end of $14.32 per share, according to LSEG.
Total sales are expected to be 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 revenue guidance to $1.71 billion to $1.83 billion, from $1.68 billion to $1.81 billion previously.
Since acquiring Foot Locker, Dick’s has sought to capitalize on its full-store history and diverse customer demographics while working hard to close underperforming stores, retool assortment and change store formats.
It previously started an 11-store pilot program called “Fast Break” that tests product changes and how they are seen in stores, where Foot Locker sees most of its revenue. The pilot was extended to nearly 100 stores worldwide and those stores saw double-digit comparable sales growth and significant improvements in gross margin.
By the time the back-to-school season begins, the pilot will expand to 250 stores, with additional additions planned before the holiday shopping season.
At the end of the quarter, the total Foot Locker business, including Champs, WSS and Kids Foot Locker, had 2,483 stores worldwide.
