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    DKS
    Earnings call· Jan 2026(Q4 FY26)

    DICK'S SPORTING GOODS Q4 FY26 earnings call DKS

    Mar 12, 2026 Source

    Executive summary

    DICK'S Sporting Goods Q4 FY26 — Strong Core Performance and Foot Locker Turnaround Progress

    DICK'S Sporting Goods concluded FY25 with robust performance in its core business, marked by strong comparable sales and record full-year revenue, while making significant strides in the Foot Locker integration. The Fast Break initiative shows promising early results, driving optimism for the Foot Locker turnaround, though its initial impact on consolidated profitability is negative. Management remains confident in the long-term value creation from the acquisition and the continued momentum of the DICK'S brand.

    Highlights

    5

    • DICK'S business delivered Q4 comparable sales growth of 3.1%, building on last year's 6.6% increase for a nearly 10% two-year stack.

    • DICK'S business achieved record full-year sales of $14.1 billion and non-GAAP EPS of $14.58, exceeding the high end of expectations.

    • Foot Locker's Fast Break initiative stores drove very strong positive comps, meaningfully exceeding the DICK'S business, with inventory cleanup now essentially complete.

    • Consolidated net sales increased 28.1% to $17.22 billion for the full year 2025, driven by Foot Locker acquisition and DICK'S comp growth.

    • Quarterly dividend increased by 3% to an annualized payout of $5 per share, marking the 12th consecutive year of increase.

    Concerns

    5

    • Consolidated gross profit margin for Q4 decreased 303 basis points year-over-year, driven entirely by the mix impact from the Foot Locker business.

    • Consolidated non-GAAP SG&A expenses for Q4 deleveraged 9 basis points compared to last year, primarily due to the Foot Locker business.

    • Consolidated Q4 non-GAAP EPS of $3.45 included a $0.44 negative impact from higher share count and a $0.16 negative impact from Foot Locker operations.

    • Q4 DICK'S business transactions declined 1.3%, partially offsetting a 4.4% increase in average ticket.

    • Foot Locker business reported a $5.9 million operating loss in Q4 and a $52.2 million operating loss for the partial year 2025.

    Guidance & targets

    15
    CategoryTargetConfidence
    DICK'S Business Total Sales
    $14.5 billion to $14.7 billion
    high materiality
    High
    DICK'S Business Comparable Sales Growth
    2% to 4%
    high materiality
    High
    DICK'S Business Operating Margin
    approximately 11.1% at the midpoint
    high materiality
    Medium
    DICK'S Business Preopening Expenses
    approximately $90 million
    medium materiality
    High
    Foot Locker Business Total Sales
    $7.6 billion to $7.7 billion
    high materiality
    High
    Foot Locker Business Pro Forma Comparable Sales
    1% to 3%
    high materiality
    High
    Foot Locker Business Operating Income
    $100 million to $150 million
    high materiality
    High
    Consolidated Non-GAAP Operating Income
    $1.68 billion to $1.81 billion
    high materiality
    High
    Consolidated Non-GAAP Earnings Per Diluted Share
    $13.50 to $14.50
    high materiality
    High
    Consolidated Effective Tax Rate
    approximately 25.5%
    medium materiality
    High
    Consolidated Interest Expense
    approximately $70 million
    medium materiality
    High
    Consolidated Interest Income
    $20 million to $25 million
    medium materiality
    High
    Consolidated Net Capital Expenditure
    approximately $1.5 billion
    high materiality
    High
    Foot Locker Acquisition Pretax Charges
    approximately $150 million
    medium materiality
    High
    Foot Locker Acquisition Cost Synergies
    $100 million to $125 million
    high materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    DICK'S Business
    Delivered record sales and strong comparable sales growth for the full year, exceeding expectations. Growth was driven by increases in both average ticket and transactions. Achieved double-digit operating margin and strong non-GAAP EPS. Inventory levels are well-positioned.
    Comparable sales growth: 4.5%Average ticket increase: 4.2%Transactions increase: 0.3%2-year comp stack: 9.7%3-year comp stack: 12.3%Non-GAAP EPS: $14.58Operating income: $1.57 billionOperating income margin: 11.12%Inventory growth: 1%
    		$14.1 billion4.5%—11.1% operating margin
    DICK'S Business
    Strong Q4 performance with comparable sales growth on top of a high prior-year base. Gross margin expansion was driven entirely by higher merchandise margin. Operating margin was well ahead of last year. Transaction decline was partially offset by strong average ticket growth.
    Comparable sales growth: 3.1%2-year comp stack: 9.7%3-year comp stack: 12.6%Average ticket increase: 4.4%Transactions decline: 1.3%Gross margin expansion: 67 bpsSG&A expense dollars increase: 3.1%SG&A leverage: 22 bpsOperating income: $444.5 millionNon-GAAP EPS: $4.05
    		$4.05 billion3.1%—10.97% operating margin
    Foot Locker Business
    Partial year sales contribution and operating loss for the Foot Locker business post-acquisition. Reflects initial phase of 'cleaning out the garage' and inventory optimization.
    		$3.11 billion——-$52.2 million operating loss
    Foot Locker Business
    Q4 sales contribution and operating loss. Pro forma comparable sales decline was better than expected, indicating progress in inventory cleanup and initial turnaround efforts.
    Pro forma comparable sales decline: 3.4%
    		$2.18 billion——-$5.9 million operating loss

    Operational metrics

    16
    Consolidated Non-GAAP Operating Income
    $1.52 billion
    FY25

    Consolidated non-GAAP operating income for the full fiscal year, including the partial year contribution from Foot Locker.

    Consolidated Non-GAAP Earnings Per Diluted Share
    $13.20
    FY25

    Consolidated non-GAAP earnings per diluted share for the full fiscal year.

    DICK'S Business Non-GAAP Earnings Per Diluted Share
    $14.58up 3.8%
    FY25

    Non-GAAP earnings per diluted share for the DICK'S business, excluding the dilutive effect of shares issued for Foot Locker acquisition.

    Consolidated Non-GAAP Gross Profit
    $1.99 billiondown 303 bps
    Q4 FY25

    Consolidated non-GAAP gross profit for the fourth quarter, with year-over-year decline driven by Foot Locker's mix impact.

    Foot Locker Inventory Optimization Impact on Gross Profit (GAAP)
    $218 million
    Q4 FY25

    Unfavorable impact on GAAP gross profit due to actions to optimize Foot Locker's inventory, in line with expectations.

    Consolidated Non-GAAP SG&A Expenses
    $1.54 billionincreased 60.5%
    Q4 FY25

    Consolidated non-GAAP SG&A expenses for the fourth quarter, with deleverage primarily driven by the Foot Locker business.

    Consolidated Non-GAAP Operating Income
    $438.6 million
    Q4 FY25

    Consolidated non-GAAP operating income for the fourth quarter.

    Consolidated Non-GAAP Income Tax Expense
    $114.8 million
    Q4 FY25

    Consolidated non-GAAP income tax expense for the fourth quarter, favorable to expectations.

    Consolidated Non-GAAP Earnings Per Diluted Share
    $3.45
    Q4 FY25

    Consolidated non-GAAP earnings per diluted share for the fourth quarter, including negative impacts from Foot Locker acquisition.

    Consolidated GAAP Earnings Per Diluted Share
    $1.41
    Q4 FY25

    Consolidated GAAP earnings per diluted share for the fourth quarter, including significant acquisition-related costs and an asset write-down.

    Cash and Cash Equivalents
    $1.35 billion
    End of FY25

    Consolidated cash and cash equivalents balance at the end of the fiscal year.

    Consolidated Inventory
    $4.91 billionincreased 47%
    End of FY25

    Consolidated inventory levels at the end of the fiscal year, including the Foot Locker business.

    Net Capital Expenditures
    $302 million
    Q4 FY25

    Net capital expenditures for the fourth quarter.

    Dividends Paid
    $108 million
    Q4 FY25

    Quarterly dividends paid.

    Share Repurchases
    $43 million
    Q4 FY25

    Share repurchases executed during the fourth quarter.

    Foot Locker Acquisition Total Pretax Charges
    $500 million to $750 million
    Medium Term

    Total expected pretax charges related to the Foot Locker acquisition, with a portion already recognized in FY25.

    Industry KPIs

    8
    MetricValueDetails
    Sg a OPEX ratio9 bpsbps
    Comparable sales3.1%%
    Store count growth35locations
    Gross margin drivers67 bpsbps
    Net debt to adjusted EBITDAno borrowings
    Share buyback capital return$43 millionUSD
    Inventory position markdown risk$4.91 billionUSD
    Distribution supply chain cost economics—

    Deals & partnerships

    1
    Foot LockerAcquisition of Foot Locker business to gain scale, deeper brand relationships, access to new consumers, and global footprint.

    Acquisition completed approximately 6 months prior to the call. Focus on 'cleaning out the garage' (inventory optimization) and implementing 'Fast Break' initiative in stores. Total pretax charges of $500M-$750M expected, with $390M recognized in FY25 and ~$150M in FY26.

    Risks & headwinds

    2
    Geopolitical and Macroeconomic EnvironmentFY26

    dynamic

    Mitigation: Guidance balances optimism with overall dynamic macroeconomic and geopolitical situation.

    Promotional EnvironmentQ4 FY25

    more promotional than anticipated

    Mitigation: Team managed margin rates and profitability effectively despite the promotional environment.

    What to watch in Q1 FY27

    5

    Foot Locker Fast Break Store Rollout Progress

    Next quarter / Back-to-school 2026
    CurrentApproximately 20 stores (11 pilot + 10 LA)
    TargetProgress towards ~250 stores by back-to-school

    Why it matters

    The rapid expansion of the Fast Break initiative is key to the Foot Locker turnaround and achieving its FY26 sales and operating income targets.

    Now looking ahead, we're excited to rapidly scale Fast Break by back-to-school 2026.

    Q&A highlights

    5

    What gives confidence in the strong FY26 sales guidance for DICK'S, and why did Q4 sales growth modestly decelerate compared to Q3?

    Lauren Hobart highlighted the strong Q4 comp of 3.1% on top of 6.6% last year, resulting in a nearly 10% two-year stack, exceeding internal expectations. She emphasized broad-based strength across categories and consumer resilience to new products, expressing confidence in continued momentum driven by major sporting events like the World Cup. The Q4 performance was strong despite the prior year's high base.

    “We had a 3.1% comp growth. And importantly, we were on top of the prior year's 6.6% comp. So on a 2-year stack basis, we actually exceeded our internal expectations and we were close to 10%.”

    asked by Brian Nagel · answered by Lauren Hobart

    2 min read5 chapters

    Detailed Narrative

    01

    Foot Locker Turnaround Strategy and Fast Break Initiative

    DICK'S Sporting Goods is making significant progress in the Foot Locker turnaround, focusing on 'cleaning out the garage' by addressing unproductive inventory and optimizing the store portfolio. The inventory cleanup is largely complete, leveraging DICK'S value chain (Going, Going, Gone) to efficiently clear product. The 'Fast Break' initiative, an evolution of an 11-store pilot, has shown strong positive comparable sales and gross margin improvement by optimizing product assortment and presentation. Based on this success, the company plans to rapidly scale Fast Break to approximately 250 stores across the U.S. and Europe by back-to-school 2026, which is a significant undertaking.

    02

    DICK'S Business Momentum and Strategic Pillars

    The core DICK'S business continues to demonstrate strong momentum, achieving record sales of $14.1 billion and a 4.5% comparable sales increase for FY25, exceeding expectations. This performance is attributed to a compelling omnichannel athlete experience, a differentiated product assortment, deep engagement with the DICK'S brand, and strong company culture. Growth was broad-based across footwear, apparel, and hardlines, with consumers responding well to new and innovative products. The company anticipates continued comp growth and profitability for the DICK'S business in FY26, driven by these strategic pillars.

    03

    Real Estate and Store Portfolio Expansion

    DICK'S is actively repositioning and elevating its real estate portfolio through its innovative House of Sport and Field House concepts. In FY25, 16 new House of Sport and 15 new Field House locations were opened, bringing totals to 35 and 42 respectively. For FY26, plans include opening approximately 14 new House of Sport and 22 new Field House locations, with construction beginning on an additional 18 House of Sport stores for 2027 openings. The company also plans to open approximately 15 Golf Galaxy Performance Center locations in FY26, indicating continued investment in specialized formats.

    04

    Digital Strategy and AI Integration

    The company is accelerating its digital strategy, focusing on enhancing the athlete experience through personalized and connected interactions. This includes improved online search, new digital tools in-store and in the app, and evolving service culture with better teammate training. DICK'S is also harnessing the power of athlete data through GameChanger and the DICK'S Media Network. GameChanger, a leader in youth sports tech, continues to drive strong growth and profitability, offering unique live sports content for the Media Network. The company is exploring AI, including Agentic commerce, to improve teammate efficiency, optimize inventory, and enhance customer recommendations.

    05

    Capital Allocation and Shareholder Returns

    DICK'S Sporting Goods remains committed to returning capital to shareholders. The company announced a 3% increase in its quarterly dividend, marking the 12th consecutive year of dividend increases. For FY26, the capital allocation plan includes approximately $1.5 billion in net capital expenditures, focused on store growth, relocations, improvements, and technology investments for the DICK'S business, as well as reenergizing the Foot Locker store fleet, including the rapid expansion of Fast Break. Share repurchases are expected to offset normal course dilution.

    AI-generated summary of the company’s earnings call. Not investment advice.