Dick’s Sporting Goods (DKS) Q3 2025 earnings

Dick’s sporting goods It plans to close a large number of Foot Locker stores now that its acquisition of the sneaker company is complete, the company said Tuesday when reporting fiscal third-quarter earnings.

It’s unclear how many stores Dick’s plans to close, but the closures are part of a larger restructuring it is undertaking so Foot Locker is not a drag on its earnings by fiscal 2026, Dick’s CEO Ed Stack told CNBC’s Courtney Regan.

“We need to clean out the garage,” Stack said. “We’ve taken very aggressive markdowns to remove older merchandise. We’re diluting some store assets. We’re going to close some stores… Everything we’re doing is there to protect 2026 and we’re only doing it once.”

The company declined to specify the number of stores that would be affected and whether the restructuring would include layoffs.

As a result, Foot Locker’s comparable sales are expected to decline by mid-to-high single digits in the current quarter with margins expected to decline between 10 and 15 percentage points.

Outside of the Foot Locker business, Dick’s Stores saw comparable sales rise 5.7% during the quarter, far exceeding analysts’ expectations of 3.6%, according to StreetAccount.

For its namesake logo, the company now expects comparable sales to rise between 3.5% and 4%, compared to its previous range of 2% to 3.5%. This beats growth expectations of 3.6%, according to StreetAccount.

Dick’s now also expects full-year earnings per share to range between $14.25 and $14.55, up from the previous forecast of $13.90 to $14.50 and in line with expectations of $14.44 per share, according to LSEG.

Here’s how the big sporting goods store performed compared to what Wall Street expected, based on a survey of analysts conducted by LSEG:

• EPS: $2.78 was revised from $2.71 expected
• profit: $4.17 billion versus $3.59 billion expected

The company’s reported net income for the three-month period ending November 1 was $75.2 million, or 86 cents per share, compared to $227.8 million, or $2.75 per share, in the previous year. Excluding one-time items including the impact of the Foot Locker acquisition, Dick’s reported earnings per share of $2.78.

Dick’s has been a standout performer in the retail sector and now faces the challenge of overhauling Foot Locker’s business so as not to impact its typically bottom-line results.

Dick’s acquisition of Foot Locker for $2.4 billion gave it a huge competitive advantage in the wholesale athletic footwear market, and more importantly for… Nike products, reaching both international and urban consumers.

It also stimulates the company’s growth significantly. Thanks to Foot Locker’s revenue, which was about $931 million during the quarter, Dick’s sales rose an impressive 36% to $4.17 billion from $3.06 billion a year earlier.

However, it has also gained some risks. Foot Locker has about 2,400 stores globally and has underperformed for years. Its consumer tended to skew income less than Dick’s consumer and did not hold up well in a declining economy.

Under CEO Mary Dillon, Foot Locker has modernized its stores and changed the way it sells athletic shoes. Since its acquisition, it has begun testing changes in 11 North American stores to see if reforms will improve sales, including cutting products by more than 20%, bringing back clothing and changing Foot Locker’s “shoe wall.”

“If you’ve ever walked into a Foot Locker store and looked at the wall of shoes, it’s just a run-down of the line,” Stack said. “It was just a whole bunch of shoes that were thrown against the wall, and we took all of that down, remarketed them, and focused on shoes that we really wanted to sell. … It’s still early days, but we’re very excited about what we’ve done.”

— CNBC’s Courtney Regan contributed to this report.