DICK'S Sporting Goods NYSE: DKS reported a strong start to fiscal 2026, with executives highlighting broad-based momentum in the core DICK'S business and early signs of improvement at Foot Locker following its acquisition.
On the company’s first-quarter earnings call, Executive Chairman Ed Stack said the company is benefiting from what he described as a “real sports moment,” citing strong consumer engagement with sports, upcoming global events such as the 2026 World Cup and the 2028 Summer Olympics in Los Angeles, and the growing intersection of sports, lifestyle and culture.
“This environment plays directly to our strengths, and DICK'S is leading from the front,” Stack said.
Core DICK'S Business Posts 6% Comparable Sales Growth
President and Chief Executive Officer Lauren Hobart said comparable sales in the DICK'S business rose 6% in the quarter, driven by both higher average ticket and increased transactions. She said the growth was broad-based across footwear, apparel and hardlines, with strength in categories including team sports, licensed products, trading cards and golf.
Hobart said the company continues to see a healthy consumer across income demographics, with “no signs of trading down.” She also said DICK'S added 1.5 million new athletes to its database during the quarter.
“This was definitely not a result of a one-time factor,” Hobart said in response to an analyst question. “We saw broad-based strength across the entire portfolio.”
Chief Financial Officer Navdeep Gupta said consolidated net sales increased 62.7% to $5.16 billion, helped by a $1.79 billion contribution from the Foot Locker business and the 6% comp increase at DICK'S. Comparable sales in the DICK'S business reflected a 5.5% increase in average ticket and a 0.5% increase in transactions.
On a two-year basis, DICK'S business comps increased 10.5%, and on a three-year basis, they rose 15.8%, Gupta said.
Foot Locker Shows Early Improvement
Management emphasized progress in the Foot Locker turnaround, particularly in North America and the U.S. Foot Locker banner. Stack said the global Foot Locker business delivered slightly positive comps and operating income in the quarter, along with merchandise margin improvement. It was the first quarter of positive comps for Foot Locker since the fourth quarter of 2024, he said.
Foot Locker’s pro forma comps increased 0.6% for the quarter, driven by a 1.4% increase in North America. The U.S. Foot Locker banner posted 6.4% comp growth.
Stack said the company has focused first on the U.S. Foot Locker banner because it is the largest and most critical part of the Foot Locker business. He said DICK'S has cleaned up Foot Locker’s inventory, repaired key vendor relationships, rebuilt management teams and begun remerchandising stores through its FastBreak initiative.
FastBreak stores, which feature a more focused footwear wall, improved storytelling and a reintroduced apparel assortment, delivered double-digit comps in the first quarter, Stack said. DICK'S expanded the format by about 90 stores during the quarter, bringing the total to about 100. The company plans to have approximately 250 FastBreak stores across Foot Locker, Kids Foot Locker and Champs globally by back-to-school.
“At its core, it's retail 101, and when you execute it with discipline, it works,” Stack said.
Stack said the back-to-school season will be the first period in which the current team had full control over Foot Locker’s buying decisions. He said shoppers should see better women’s product, improved basketball and running assortments, more apparel tied to footwear stories and better in-stock positions in certain accessories.
Margins, Earnings and Balance Sheet
Consolidated non-GAAP gross profit was $1.73 billion, or 33.42% of net sales, down 328 basis points from a year earlier. Gupta said the decline was primarily due to the mix impact from Foot Locker.
Consolidated non-GAAP operating income was $378.4 million, or 7.33% of net sales, compared with $360.4 million, or 11.35% of net sales, a year earlier. The DICK'S business generated operating income of $361 million, or 10.69% of net sales, while Foot Locker produced operating income of $17.5 million, or 0.98% of net sales.
Non-GAAP earnings per diluted share were $2.90, compared with $3.37 last year. GAAP earnings per diluted share were $3.54, including $174 million of pre-tax litigation and other settlements, partially offset by $97 million of pre-tax Foot Locker acquisition-related costs.
DICK'S ended the quarter with about $1 billion in cash and cash equivalents and no borrowings on its $2 billion unsecured credit facility. Inventory totaled $5.42 billion, reflecting the addition of Foot Locker, while inventory in the DICK'S business rose 3%.
The company repurchased 719,000 shares for $141 million at an average price of $196.38 and paid $114 million in quarterly dividends.
Guidance Raised at Low End for Both Businesses
DICK'S raised the low end of its full-year comparable sales outlook for both the DICK'S and Foot Locker businesses, while maintaining its consolidated non-GAAP earnings per diluted share forecast of $13.50 to $14.50.
- DICK'S business comps: Now expected to rise 2.5% to 4%, compared with prior guidance of 2% to 4%.
- Foot Locker pro forma comps: Now expected to rise 1.5% to 3%, compared with prior guidance of 1% to 3%.
- Foot Locker operating income: Now expected between $110 million and $150 million, compared with prior guidance of $100 million to $150 million.
- Consolidated non-GAAP EPS: Still expected between $13.50 and $14.50.
- Net capital expenditures: Now expected to be approximately $1.4 billion, split roughly 70% for DICK'S and 30% for Foot Locker.
Gupta said the company expects comps and operating income for Foot Locker to be weighted toward the back half of the year. For the DICK'S business, he said higher comps are expected in the first half, partly due to the timing of the World Cup, while operating margin pressure is expected to be greatest in the second quarter because of planned investments, including World Cup marketing and pre-opening expenses tied to House of Sport locations.
The company now expects a full-year consolidated effective tax rate of about 27%, roughly 150 basis points higher than its previous expectation. Gupta said that increase is expected to reduce non-GAAP EPS by about $0.25 for the year and is reflected in the updated outlook.
Store Concepts, Digital Investments and GameChanger
Hobart said DICK'S continues to reposition its store portfolio through House of Sport and Field House formats. During the quarter, the company opened one House of Sport and two Field House locations and remains on track to open about 13 more House of Sport stores and 20 more Field House locations this year.
The company also recently opened a Fort Worth distribution center to support the Texas market and surrounding areas. Hobart said DICK'S is investing in digital capabilities, including the planned summer launch of Coach by DICK'S, an AI-powered digital agent designed to help athletes with product, training and service decisions.
Hobart also highlighted GameChanger, saying roughly 50% of all games covered on the platform in the first quarter were streamed live. She said more games were streamed on GameChanger in the last month alone than have been played in the entire history of Major League Baseball.
Management said promotional activity was not a major factor in the first quarter. Hobart said the company remains “surgical” in how it manages promotions and is not particularly concerned about the promotional environment.
About DICK'S Sporting Goods NYSE: DKS
DICK'S Sporting Goods is a leading U.S.-based sporting goods retailer that sells a broad range of sports equipment, apparel, footwear and outdoor gear. The company operates an omnichannel business combining physical stores with digital sales, offering products for team sports, fitness, hunting and fishing, golf, and general active lifestyle categories. In addition to its flagship DICK'S stores, the company operates specialty formats such as Golf Galaxy and branded service offerings including team-sports sales and custom equipment solutions.
The company traces its roots to a single sporting goods outlet founded in 1948 and has since grown into a national retail chain serving customers across the United States.
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