Dick’s Sporting Goods, Inc. (DKS) reported same-store sales jumped a better-than-expected 5.7 percent at its Dick’s business in the third quarter, prompting the company to raise its guidance for the Dick’s Sporting Goods business. However, the company stated it will absorb future charges of $500 million to $750 million to reduce inventory and close stores at Foot Locker and forecast a dismal fourth quarter for the recently acquired business.

Highlights of the Quarter

  • Delivered earnings per diluted share of 86 cents and non-GAAP earnings per diluted share of $2.07; Delivered non-GAAP earnings per diluted share for the Dick’s Business of $2.78 compared to GAAP and non-GAAP earnings per diluted share of $2.75 during the prior year quarter
  • Opened 13 new House of Sport locations and 6 new Dick’s Field House locations during the third quarter
  • Raises full year 2025 guidance for comparable sales growth for the Dick’s Business to a range of 3.5 percent to 4.0 percent, up from 2.0 percent to 3.5 percent previously
  • Raises full year 2025 earnings per diluted share guidance for the Dick’s Business to a range of $14.25 to $14.55, up from $13.90 to $14.50 previously
  • Completed acquisition of Foot Locker to become a global leader in the sports retail industry, assembled a world-class management team and initiated a review of unproductive assets, which, along with merger and integration costs, is expected to result in future pre-tax charges of $500 to 750 million.

Management Commentary
“We delivered another strong quarter with Dick’s Business comps of 5.7 percent, and we continue to operate from a position of strength. We are incredibly excited about our acquisition of Foot Locker, which marks a bold and transformative step that expands our reach and creates a global platform at the intersection of sport and culture. At Foot Locker, we’ve assembled a world-class management team and are taking decisive actions to “clean out the garage” by clearing unproductive inventory, closing underperforming stores and laying the foundation for a fresh start in 2026. These steps, combined with our operational expertise, strong vendor relationships and the passion of our new team members, including the Stripers and Blue Shirts, will position the Foot Locker Business for profitable growth. Together, we are building a stronger and more dynamic company for the long term,” said Ed Stack, executive chairman.

“The effectiveness of our long-term strategies and the best-in-class execution by our team are driving outstanding results for our Dick’s Business. In the third quarter, the Dick’s Business comps grew 5.7% driven by increases in both average ticket and transactions, and we were pleased to deliver gross margin expansion. Reflecting these strong results and our continued confidence, we are again raising our full-year 2025 outlook for the DICK’S Business. Finally, we welcome our Foot Locker team members to the Dick’s family, and we are excited about the journey underway to return the Foot Locker Business to its rightful place in our industry,” said Lauren Hobart, president and chief executive officer.

Third Quarter Results

Nine-Month Results
In the nine months on a consolidated basis, net sales grew 15.1  percent to $11.0 billion. Income from operations as a percent of sales shrunk 309 basis points to 8.3 percent from 11.4 percent. Net income declined 17 percent to $721 million, or $8.66 a share, from $865 million, or $10.43,  a year ago.

On an adjusted non-GAAP basis, income from operations were down 176 basis points as a percent of sales to 9.8 percent from 11.6 percent. Net income slid 6 percent to $810 million, or $9.74, from $865 million, or $10.43, a year ago.

On a non-GAAP basis, the Dick’s business reported same-store sales grew 5.0 percent in the nine months against a 4.7 percent gain in the year-ago period. Income from operations declined 39 basis points to 11.2 percent from 11.6 percent. Earnings at the Dick’s business on a non-GAAP basis were down 1 percent to $855 million, or $10.52 a share, from $865 million, or $10.43, a year ago.

Balance Sheet

Acquisition of Foot Locker
On September 8, 2025, the company acquired all of the issued and outstanding shares of Foot Locker, Inc. a leading footwear and apparel retailer, pursuant to the definitive merger agreement executed on May 15, 2025. Total consideration exchanged for the acquisition was $2.5 billion, which primarily consisted of $2.1 billion in share consideration for the issuance of 9.6 million shares of Dick’s Sporting Goods common stock, $223.0 million in cash consideration and $111.6 million from the company’s pre-existing equity ownership in Foot Locker. The company’s current period results reflect Foot Locker’s operations subsequent to the acquisition close date, other than pro forma comparable sales as noted in the supplemental financial information tables below.

The company has initiated a review of unproductive assets which includes clearing out unproductive inventory, closing underperforming stores, and right-sizing assets that don’t align with our go-forward vision for the Foot Locker Business. These actions along with additional merger and integration costs, are expected to result in future pre-tax charges of $500 to 750 million.

2025 Outlook
The company is providing an updated outlook specific to its Dick’s Business to ensure comparability of results across previous quarters in fiscal 2025, which management believes provides ongoing visibility into the Dick’s Business for the balance of the fiscal year. Outlook sections below include expectations for the Dick’s Business, commentary on the fourth quarter outlook for the Foot Locker Business, and certain measures applicable to the consolidated company’s expectations for the fourth quarter of fiscal 2025. Dick’s Business outlook does not include results for the Foot Locker Business as well as investment gains and merger and integration costs related to the Foot Locker acquisition. Foot Locker Business commentary and outlook does not include results for the Dick’s Business.

Dick’s Business: Full Year 2025 Outlook

Foot Locker Business: Q4 2025 Commentary and Outlook
The company is taking strategic actions to address unproductive assets, including the optimization of inventory and the closure of underperforming stores. The company believes these actions will lay the groundwork for the success of the Foot Locker Business starting in 2026. As a result of the actions to optimize the inventory, the company believes that Q4 2025 gross margin for the Foot Locker Business will be down between 1,000 to 1,500 basis points as compared to Foot Locker’s reported results in the same period last year with pro-forma comp sales being down mid- to high-single digits. Excluding the one-time costs associated with the company’s actions to address unproductive assets, including the optimization of inventory and the closure of underperforming stores, the company expects Q4 2025 operating profit for Foot Locker to be slightly negative

Consolidated Q4 2025 Outlook

Image and Charts courtesy Dick’s Sporting Goods