Foot Locker Returns to Growth, but Acquisition Costs Weigh on Dicks Sporting Goods Earnings Miss
Dick's Sporting Goods reported an earnings miss on Wednesday as costly turnaround efforts at its legacy sneaker subsidiary Foot Locker continued to pressure profitability, despite a return to comparable sales growth at the chain.
Acquisition Costs and Quarterly Performance
In the three months ended May 2, Dick's incurred $96.5 million in charges related to the Foot Locker acquisition. This included $53.8 million for merger and acquisition costs such as severance and store closings, and $42.7 million to clear through sale inventory. These expenses contributed to a bottom-line miss, even though top-line results exceeded Wall Street expectations.For the fiscal first quarter, Dick's reported earnings per share of $2.90 adjusted, versus the $2.92 expected by analysts surveyed by LSEG. Revenue came in at $5.17 billion, above the $5.09 billion consensus estimate. Net income reached $319.82 million, or $3.54 per share, compared with $264.29 million, or $3.24 per share, a year earlier. Sales rose about 63% from $3.17 billion a year ago, reflecting the addition of Foot Locker.
Foot Locker and Dick's Comparable Sales
Foot Locker eked out comparable sales growth of 0.6%, the first increase in that metric since the end of fiscal 2024. By contrast, Dick's namesake stores posted a 6% comparable sales gain, resulting in a combined growth rate of 4.1%. At Foot Locker U.S., where Dick's has concentrated much of its turnaround attention, comparable sales grew 6.4%.Revised 2026 Guidance
Following the quarterly results, Dick's tightened its 2026 comparable sales growth guidance. The company now expects the Dick's business to grow between 2.5% and 4%, up from a previous range of 2% to 4%. It anticipates Foot Locker will rise between 1.5% and 3%, compared with the earlier forecast of 1% to 3%.Dick's lowered its consolidated operating income guidance for 2026 to a range of $1.69 billion to $1.81 billion, down from $1.71 billion to $1.83 billion. It reduced its 2026 earnings per share forecast to $13.27 to $14.27, from $13.70 to $14.70. The company continues to anticipate adjusted earnings per share of $13.50 to $14.50, which exceeds expectations at the high end of $14.32 per share, according to LSEG. Net sales are expected to be between $22.1 billion and $22.4 billion, roughly in line with the $22.4 billion consensus. Dick's also raised its adjusted operating income guidance to $1.71 billion to $1.83 billion, up from $1.68 billion.
Shares fell nearly 2% in premarket trading.
Market Context
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- Date: May 27, 2026