DICK’S Sporting Goods Sees Healthy Demand as Foot Locker Turnaround Takes Longer

Key Points

• DICK’S core business remains healthy: Management said demand is strong for innovative and sport-specific products, including offerings from On, HOKA and Nike, despite slower sales of legacy sneaker styles. The company maintained its comparable-sales outlook while planning continued promotions on older inventory.
• Foot Locker’s turnaround is taking longer than expected: Weaker retro footwear demand, excess legacy inventory, challenging international conditions and a slower shift toward newer brands have pressured the business. DICK’S expects the transition to require more time but says it is relatively low-capital and is evaluating multiple options.
• Investments in growth and technology continue: House of Sport stores are generating strong returns, while GameChanger, DICK’S Media and AI tools such as Coach by DICK’S are contributing to long-term productivity and customer engagement efforts.

DICK'S Sporting Goods NYSE: DKS executives said demand for athletic footwear and apparel remains healthy despite slower sales of certain legacy sneaker styles, while the company works to reposition Foot Locker’s assortment and store base following its acquisition.

Executive Chairman Ed Stack said concerns that the broader athletic cycle has ended are “overdone,” pointing to continued strength in DICK’S footwear business. He said specialty retailers have been more exposed to slowing demand for high-launch retro footwear, while DICK’S has shifted more quickly toward brands and categories that are gaining consumer interest.

“If there’s something new and different out there that the consumer views as different and innovative, it’s doing very well,” Stack said, citing products from On, HOKA and Nike’s running assortment.

Legacy footwear promotions expected to continue

Stack said traditional versions of certain legacy silhouettes, including Nike Air Force 1 and Dunk styles, slowed materially during the second quarter. However, he said versions with different materials or embellishments have continued to sell strongly, underscoring a consumer preference for newness rather than a broad pullback in footwear demand.

The company expects aggressive discounting of less-desirable legacy footwear to continue through the remainder of the year. Stack characterized those promotions as a long-term investment intended to retain customers rather than allow them to shop elsewhere for lower-priced products.

“We didn’t want to be viewed as high price in the marketplace,” Stack said. “We make investments in our business, not for a quarter or two, but for a lifetime.”

President and Chief Executive Officer Lauren Hobart said DICK’S maintained its comparable-sales outlook, though its guidance reflects promotional activity in legacy footwear as well as higher fuel and healthcare costs. She said the company remains bullish on the core DICK’S business and does not expect the challenges facing Foot Locker to spread to its namesake banner.

Stack said DICK’S has also benefited from demand outside of traditional sneakers, including Birkenstock, UGG and Timberland products. He described athletic consumers as having distinct needs for sport-specific footwear, running, training, recovery and lifestyle use.

Foot Locker transition taking longer than expected

On Foot Locker, Stack said the company’s updated outlook reflects a more difficult-than-expected launch and retro footwear environment, weaker conditions in Europe, the Middle East and Africa, and a slower transition into newer brands and product franchises.

He said the industry currently has excess supply of certain legacy silhouettes while facing shortages of newer footwear that is resonating with consumers. Manufacturing constraints have limited the availability of some of those newer styles, according to Stack.

“We don’t see this as a demand issue whatsoever,” Stack said. “If you’ve got something that’s new and innovative, that consumer will step into the plate to buy that product.”

Stack said DICK’S has gained greater visibility across the athletic footwear market through Foot Locker, atmos and its Going, Going, Gone! clearance business. The company can use Foot Locker trends to adjust its DICK’S assortment, while using atmos to observe early product launches and Going, Going, Gone! to manage clearance opportunities, he said.

Hobart added that Foot Locker’s trends can emerge ahead of those at DICK’S, giving the company an opportunity to taper purchases of products that may soften. She said the two businesses are also working together to move clearance inventory.

Stack said the company does not expect Foot Locker to divert capital from the DICK’S business, noting that DICK’S has approximately $1 billion on its balance sheet. He described Foot Locker’s Fast Break store initiative as a relatively low-capital transformation, focused primarily on revising assortments and improving brand relationships rather than requiring heavy capital spending.

He said certain brands that had been reluctant to support Foot Locker in the past have become more willing to do so under DICK’S ownership. Still, Stack said the transition is taking longer than management initially anticipated and that the company is evaluating a range of options for the business without a predetermined outcome.

Store concepts and technology investments

Hobart said DICK’S House of Sport stores continue to deliver strong returns, margins and comparable sales performance, including in their second through fourth years. The experiential locations, generally spanning about 100,000 to 125,000 square feet, feature elements such as climbing walls and fields and serve as testing grounds for brands and new concepts.

House of Sport has helped introduce brands including HOKA, On, FP Movement, Gymshark and Vuori, Hobart said. Chief Financial Officer Navdeep Gupta said the company also uses the format to test capabilities such as DICK’S Media and Collectors Clubhouse before expanding them into its Fieldhouse stores and broader network.

Gupta acknowledged that selling, general and administrative expenses have been elevated, but said those costs should not be viewed in isolation. He said investments in GameChanger and DICK’S Media Network contribute to SG&A while supporting sales and gross-margin gains. He also pointed to the company’s stated $100 million to $125 million in collective synergies across DICK’S and Foot Locker.

Looking ahead, management said it expects pricing in the second half to be similar to the second quarter. The company has not provided 2027 guidance, though Gupta said management will balance long-term investments with productivity efforts and monitor promotional conditions.

Hobart said the company is also investing in artificial intelligence to reduce friction for employees and customers. She highlighted Coach by DICK’S, a consumer-facing feature embedded in the DICK’S mobile app that draws on first-party ScoreCard data and employee product knowledge. Management said AI remains an investment area and that the company is focusing on applications that support its business strategy rather than adopting technology for its own sake.

About DICK'S Sporting Goods (NYSE:DKS)

DICK'S Sporting Goods, Inc is a leading American sporting goods retailer that sells athletic equipment, apparel, footwear and accessories for a broad range of sports and outdoor activities. Its merchandise includes products for fitness, team sports, golf, running, hunting, fishing and camping, as well as casual and performance-oriented clothing and footwear.

The company operates through its DICK'S Sporting Goods stores and e-commerce platform, along with specialty and concept businesses including Golf Galaxy, Public Lands and House of Sport locations.

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