Dick’s Sporting Goods delivered stronger-than-expected fourth-quarter results and record annual revenue, though profits were pressured by the company’s $2.4 billion acquisition of Foot Locker.
Since completing the purchase roughly six months ago, Dick’s has been focusing on what executives describe as “cleaning out the garage” at Foot Locker.
The effort includes evaluating the brand’s global store fleet and reducing excess or underperforming inventory. So far, the company has closed about 55 underperforming locations worldwide across the Foot Locker, Champs, Kids Foot Locker and WSS banners.
As part of the turnaround strategy, Dick’s has introduced a new store pilot for Foot Locker called Fast Break. The concept features updated store presentations and a simplified merchandise assortment, cutting roughly 30% of SKUs.
The initiative, along with other related efforts, is expected to generate costs between $500 million and $750 million.
“We’re very encouraged by what we’re seeing with our Fast Break initiative, the evolution of our 11-store Foot Locker pilot, which we plan to rapidly scale in 2026,” said Ed Stack, executive chairman of Dick’s, in the company’s earnings statement.
“In addition, our ‘clean out of the garage’ efforts have set up Foot Locker to play offense and deliver the inflection point we expect beginning with back-to-school.”
During the earnings call, Stack said the Fast Break concept is expected to expand to roughly 250 Foot Locker locations across the U.S. and Europe by the back-to-school season.
“During Q4, our Fast Break stores drove very strong positive comps, actually meaningfully exceeding the Dick’s business, while also delivering strong gross margin improvement,” he told analysts.
Stack also emphasized the company’s confidence in the long-term benefits of combining the two retailers.
Dick’s continues to invest in its experiential store formats. The company opened 16 House of Sport locations in 2025, bringing the total to 35 across the United States.
It plans to open approximately 14 additional House of Sport stores in 2026 and begin construction on about 18 locations slated to debut in 2027.
“We are really excited to see the impact of scaling these powerful concepts,” said Lauren Hobart, CEO of Dick’s Sporting Goods, during the earnings call.
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“Looking ahead, landlord interest remains extremely strong, giving us access to some of the best retail locations in the country.”
For the quarter ended Jan. 31, Dick’s reported net income of $128.3 million, or $1.41 per share, down 57% from $299.97 million, or $3.62 per share, a year earlier. The decline largely reflects one-time costs tied to the Foot Locker acquisition.
Excluding those items, adjusted earnings totaled $3.45 per share, exceeding analysts’ expectations of $2.87 per share.
Revenue climbed to $6.226 billion from $3.894 billion the previous year and topped projections of $6.07 billion.
The year-earlier sales figure did not include results from Foot Locker prior to the acquisition. Comparable sales rose 3.1% during the quarter.
For fiscal 2025, Dick’s reported net sales of $17.215 billion, an increase of 28.1% year over year. Comparable sales grew 4.5%. Net income declined 27.1% to $849 million, or $9.97 per share.
“We’re very proud of our company’s Q4 results,” Hobart said in the earnings release. “In the Dick’s business, our strong execution powered a great holiday season and another strong quarter with comp growth over 3% and double-digit non-GAAP EPS growth.
“It was a terrific year overall with comps of 4.5%, gross margin expansion, and non-GAAP operating margin of over 11%.”
Looking ahead to 2026, Hobart said the company expects continued comparable sales growth, expansion of its store footprint and solid profitability within the Dick’s business.
“We also look forward to returning the Foot Locker business to both top-line and bottom-line growth in 2026,” she said. “We have deep conviction in the tremendous opportunity ahead for our entire company.”
For fiscal 2026, Dick’s expects adjusted earnings per share to fall between $13.50 and $14.50, below analysts’ forecasts.
The company anticipates comparable sales growth of 2% to 4% for the Dick’s business and pro forma comparable sales growth of 1% to 3% for Foot Locker.
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