Executive Summary
Dick’s Sporting Goods completed its $2.4 billion acquisition of Foot Locker in September 2025. The combined company now operates 2,525 stores globally and addresses a $300 billion total addressable market, according to the company’s Q3 2025 investor presentation.
The core DICK’S Business reported comparable sales growth of 5.7% in Q3 2025, following 4.3% growth in Q3 2024 and 1.9% in Q3 2023. Management raised full-year DICK’S Business guidance for the third time this fiscal year.
The Foot Locker integration involves significant near-term costs. The company expects $500 million to $750 million in pre-tax charges to address what management described as “unproductive assets,” including inventory optimization and store closures. Management stated that Back-to-School 2026 will serve as an “inflection point” for the Foot Locker Business.
Download Dick’s Sporting Goods Investor Presentation Here
Key Takeaways
Foot Locker Acquisition Completed: Transaction closed September 2025, adding approximately 2,340 owned stores across North America, Europe, and Asia Pacific for a combined total of 2,525 locations globally
DICK’S Business Comparable Sales: Q3 2025 comparable sales increased 5.7%, driven by growth in both average ticket and transaction count
Integration Costs: Company expects $500M-$750M in one-time charges related to Foot Locker inventory optimization, store closures, and merger integration
GameChanger Revenue: Youth sports platform generated over $100M in FY24 revenue with a stated target of $150M for 2025
House of Sport Expansion: 35 locations open as of Q3 2025, with 16 opened during FY25; management targets 75-100 locations by end of FY27
DICK’S Business FY25 Guidance: Net sales of $13.95B-$14.0B, comparable sales growth of +3.5% to +4.0%, and diluted EPS of $14.25-$14.55
Foot Locker Q4 2025 Outlook: Gross margin expected to decline 1,000-1,500 basis points year-over-year; pro-forma comparable sales expected to decline mid-to-high single digits
Synergy Targets: Management reaffirmed $100M-$125M in cost synergies over the medium term; expects acquisition to be accretive to EPS in FY26 excluding one-time costs
Lite Level Analysis
Dick’s Sporting Goods Completes Foot Locker Acquisition
Dick’s Sporting Goods closed its $2.4 billion acquisition of Foot Locker in September 2025. According to the company’s investor presentation, this transaction created the following combined footprint:
- Total stores: 2,525 (891 DICK’S Business + ~1,634 Foot Locker owned stores)
- Geographic presence: North America, Europe, and Asia Pacific
- Total addressable market: approximately $300 billion (up from $140 billion for DICK’S Business alone)
- Combined market share: approximately 6.5%
- Combined workforce: 90,000+ employees (50,000+ DICK’S + 40,000+ Foot Locker)
Q3 2025 DICK’S Business Financial Results
The core DICK’S Business (excluding Foot Locker) reported the following Q3 2025 results:
- Comparable sales growth: +5.7% (compared to +4.3% in Q3 2024)
- Non-GAAP operating margin: 8.9% (compared to 9.5% in Q3 2024)
- Non-GAAP diluted EPS: $2.78 (compared to $2.75 in Q3 2024)
CEO Lauren Hobart stated in the investor presentation: “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.”
Management raised full-year DICK’S Business guidance to:
- Net sales: $13.95 billion to $14.0 billion
- Comparable sales: +3.5% to +4.0%
- Diluted EPS: $14.25 to $14.55
Foot Locker Integration: Expected Costs and Timeline
Dick’s management described their initial Foot Locker integration approach as “cleaning out the garage.” According to the presentation, this includes:
- Clearing unproductive inventory
- Closing underperforming stores
- Right-sizing assets that don’t align with the go-forward vision
The company expects these actions, combined with merger and integration costs, to result in $500 million to $750 million in pre-tax charges.
Foot Locker Q4 2025 Outlook:
- Gross margin: Expected to decline 1,000 to 1,500 basis points compared to Foot Locker’s reported results in Q4 2024
- Pro-forma comparable sales: Expected to decline mid-to-high single digits
- Operating profit: Expected to be “slightly negative” excluding one-time costs
Management stated they expect Back-to-School 2026 to be an “inflection point” when “new strategies, assortments, and processes align to drive meaningful progress in the Foot Locker Business.”
GameChanger Youth Sports Platform Performance
GameChanger, Dick’s youth sports technology platform, reported the following FY24 metrics according to the investor presentation:
GameChanger provides live streaming, scorekeeping, team management, and statistics services for youth sports including baseball, softball, basketball, soccer, and lacrosse.
House of Sport and DICK’S Field House Store Expansion
Dick’s disclosed the following store economics for its experiential retail formats:
House of Sport (approximately 120,000 square feet):
- Current locations: 35 (16 opened in FY25)
- Target: 75 to 100 locations by end of FY27
- Year 1 omni-channel sales: approximately $35 million
- Year 1 4-wall EBITDA: approximately $7 million (approximately 20% of sales)
- Net capital expenditure: slightly over $20 million
- Cash-on-cash return: approximately 25%
- Payback period: less than 4 years
DICK’S Field House (approximately 50,000 square feet):
- Current locations: 42 as of November 25, 2025 (15 opened in FY25)
- Year 1 omni-channel sales: approximately $14 million
- Year 1 4-wall EBITDA: approximately $3 million (approximately 20% of sales)
- Net capital expenditure: approximately $4.5 million
- Cash-on-cash return: approximately 40%
- Payback period: approximately 2.5 years
House of Sport locations include batting cages, rock climbing walls, golf simulators, and turf fields. Ed Stack, Executive Chairman, stated in a prior earnings release quoted in the presentation: “Our newest DICK’S concepts, DICK’S House of Sport and our next generation 50,000 square foot DICK’S store, are yielding powerful results. We haven’t seen growth opportunities like these since we went public in the early 2000s.”
ScoreCard Loyalty Program and Customer Data
Dick’s ScoreCard loyalty program reported the following metrics as of year-end 2024:
- Total members: 25 million+
- Share of total sales: approximately 75%
- ScoreCard Gold members: 7 million+
- Gold member share of sales: 45%+
The company reported that omni-channel customers (those who shop both online and in stores) represented over 65% of FY24 sales, up 600 basis points since FY19. According to the presentation, omni-channel customers spend more than twice as much as single-channel customers.
DICK’S Media Network generates 18 billion annual impressions, according to the presentation.
Pro Level Analysis
Q3 2025 Consolidated Financial Results
Dick’s Sporting Goods reported Q3 2025 consolidated net sales of $4.17 billion, which included approximately $931 million in sales contribution from a partial quarter of Foot Locker ownership following the September 2025 acquisition close.
Consolidated Q3 2025 Metrics:
DICK’S Business Segment Q3 2025 Metrics:
The DICK’S Business non-GAAP diluted EPS of $2.78 excludes the dilutive effect of 9.6 million shares issued in connection with the Foot Locker acquisition.
GAAP to Non-GAAP Reconciliation: Q3 2025
The company provided the following reconciliation for the 13 weeks ended November 1, 2025 (dollars in thousands):
Non-GAAP adjustments include:
- Investment gains of $6.4 million from non-operating investment in Foot Locker equity securities (pre-acquisition)
- Foot Locker acquisition-related costs of $138.5 million (merger and integration costs, deferred financing amortization)
- Deferred compensation plan adjustments of $10.6 million
Foot Locker Business: FY24 Financial Profile
According to the investor presentation, Foot Locker’s fiscal year 2024 financial profile included:
Foot Locker brands include Foot Locker, Kids Foot Locker, Champs Sports, WSS, and atmos.
Combined Company Store Footprint Post-Acquisition
DICK’S Business (891 total stores):
- DICK’S Sporting Goods: 649
- House of Sport: 35
- DICK’S Field House: 41
- Specialty Concept Stores: 166 (Golf Galaxy, Public Lands, Going Going Gone!)
- Distribution Centers: 5
Foot Locker Business (approximately 2,340 owned stores):
- North America: 1,634
- Europe: 581
- Asia Pacific: 124
- Licensed stores (excluded from count): 250
FY24 DICK’S Business Financial Performance
The DICK’S Business reported the following FY24 results:
Note: FY23 was a 53-week year. The extra week during fiscal 2023 generated $170 million of net sales and $0.19 earnings per diluted share.
FY24 Sales Breakdown by Category:
- Hardlines: 36%
- Apparel: 33%
- Footwear: 28%
- Other: 3%
FY24 Sales Breakdown by Brand Type:
- National Brands: 87%
- Vertical Brands: 13%
Vertical Brand Portfolio Financial Contribution
Dick’s vertical brands generated $1.7 billion in combined FY24 sales, representing 13% of total DICK’S Business revenue. According to the presentation:
- Vertical brands rank as the company’s second-largest vendor behind Nike
- Vertical brands carry 700 to 900 basis point margin premiums over national brands
- Vertical brands rank as the #1 or #2 vendor in: Accessories, Athletic Apparel, Fitness, Golf, and Team Sports
Key vertical brand positioning:
- DSG: Largest vertical brand
- CALIA: Second-largest women’s apparel brand at DICK’S (behind Nike)
- VRST: Premium men’s apparel brand
The vertical brand portfolio includes DSG, CALIA, VRST, Maxfli, Walter Hagen, Alpine Design, Tommy Armour, ETHOS, Top Flite, Nishiki, Quest, and Monarch.
EBT Margin Expansion: FY19 to FY24 Bridge
The company provided a non-GAAP gross margin bridge showing margin expansion from FY19 to FY24:
Total non-GAAP gross margin expansion: +656 basis points
Omni-Channel Performance Metrics
Dick’s reported the following omni-channel metrics for FY24:
- Over 65% of FY24 sales came from omni-channel athletes (customers who purchased from both brick-and-mortar and online channels)
- This represents a 600 basis point increase from FY19
- Omni-channel customers spend more than 2x single-channel customers
- Over 90% of sales were enabled by stores
- Over 80% of online orders were fulfilled by stores (ship from store, curbside pickup, BOPIS)
Golf Galaxy Specialty Retail Segment
Golf Galaxy operations as of Q3 2025:
- Total locations: 112
- Performance Centers: 32
- Performance Centers opened in FY25: 8
The presentation cited record U.S. rounds played in 2024 (source: Golf Datatech and the NGF) as supporting their view of golf as a growth opportunity.
Capital Allocation and Shareholder Returns: FY22-FY24
Over the three-year period FY22-FY24, Dick’s returned approximately $2.2 billion to shareholders:
This represented approximately 110% of free cash flow over the period.
Recent Capital Allocation Actions:
- New five-year share repurchase authorization: up to $3 billion
- Quarterly dividend increased 10% to $4.85 annualized
- 2025 marks the eleventh consecutive year of dividend increases
Moody’s upgraded Dick’s credit rating from Baa3 to Baa2 in August 2024.
Free Cash Flow Reconciliation
The company provided the following free cash flow reconciliation (dollars in thousands):
FY25 Guidance: DICK’S Business
Management provided the following FY25 outlook for the DICK’S Business (excluding Foot Locker results and acquisition-related items):
Management stated:
- Guidance incorporates expected impact from all tariffs currently in effect
- Gross margin expansion expected for the full year
- Gross margin expansion expected to be offset by SG&A deleverage from strategic investments
- At high end of guidance, approximately 10 basis points of operating margin expansion expected
Foot Locker Business: Q4 2025 Outlook
Management provided the following Q4 2025 commentary for the Foot Locker Business:
- Gross margin: Expected to decline 1,000 to 1,500 basis points compared to Foot Locker’s reported Q4 2024 results due to planned inventory optimization actions
- Pro-forma comparable sales: Expected to decline mid-to-high single digits
- Operating profit: Expected to be “slightly negative” excluding one-time costs associated with unproductive asset actions
Consolidated Q4 2025 Parameters
- Average diluted shares outstanding: approximately 91 million (including dilutive impact of 9.6 million shares issued for Foot Locker acquisition)
- Effective tax rate: approximately 29%
Foot Locker Integration: Management Actions and Synergy Targets
Management outlined four post-close integration actions:
- Assembled management team including North American President and International President
- Initiated “cleaning out the garage” process to address unproductive assets
- Met with all key vendor partners, who management described as “fully aligned with our vision”
- Launched 11-store pilot to test changes in product assortment and in-store presentation
Financial Targets:
- Cost synergies: $100 million to $125 million over the medium term
- One-time charges: $500 million to $750 million in pre-tax charges for unproductive asset actions and merger integration costs
- EPS accretion: Expected in FY26, excluding one-time costs
- Inflection point: Back-to-School 2026
Market Position and Total Addressable Market
DICK’S Business (Pre-Acquisition):
- Total addressable market: approximately $140 billion (U.S. footwear, apparel, and hardlines)
- Market share: nearly 9%
- Market share gain in FY24: approximately 50 basis points
Combined Company (Post-Acquisition):
- Total addressable market: approximately $300 billion (global sports retail industry)
- Combined market share: approximately 6.5%
Sources cited in presentation for market data: Circana, Euromonitor, and proprietary data.
This analysis is based on Dick’s Sporting Goods’ Q3 2025 investor presentation filed November 2025. Revenue, earnings, and other financial metrics are as reported by the company. This report is for informational purposes and does not constitute financial or investment advice.
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