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    DKS
    Earnings call· Apr 2026(Q1 FY27)

    DICK'S SPORTING GOODS Q1 FY27 earnings call DKS

    May 27, 2026 Source

    Executive summary

    DICK'S Sporting Goods Q1 FY27 — Strong Core Business Performance and Foot Locker Turnaround Progress

    DICK'S Sporting Goods delivered a strong Q1 FY27, driven by robust performance in its core business and encouraging early signs of a turnaround at Foot Locker, particularly in the U.S. The company is strategically investing in store concepts like House of Sport and Fast Break remodels, enhancing digital capabilities, and leveraging strong brand partnerships. Management remains confident in its full-year outlook despite anticipated Q2 pressures from World Cup-related investments and a higher tax rate.

    Highlights

    5

    • DICK'S business comp sales increased 6%, building on a 4.5% increase last year and 5.3% in 2024.

    • Foot Locker business delivered slightly positive comps and operating income, marking its first positive comp quarter since Q4 FY24.

    • The U.S. Foot Locker banner comped up 6.4% in Q1 FY27.

    • Fast Break stores delivered double-digit comps in Q1 FY27 and meaningful merchandise margin improvement.

    • Added 1.5 million new athletes to the database in Q1 FY27.

    Concerns

    5

    • Consolidated non-GAAP gross profit was down 328 basis points YoY to 33.42% of net sales, primarily due to mix impact from the Foot Locker business.

    • Consolidated non-GAAP SG&A expenses deleveraged 88 basis points compared to last year.

    • DICK'S business SG&A deleveraged 31 basis points, driven by investments in digital and in-store.

    • Consolidated non-GAAP operating income was 7.33% of net sales, down from 11.35% last year.

    • The full-year effective tax rate is now expected to be approximately 27%, 150 basis points higher than original expectation, unfavorably impacting non-GAAP EPS guidance by approximately $0.25.

    Guidance & targets

    9
    CategoryTargetConfidence
    Foot Locker business comp sales growth
    1.5% to 3%
    high materiality
    High
    DICK'S business comp sales growth
    2.5% to 4%
    high materiality
    High
    DICK'S business operating margin
    approximately 11.4%
    high materiality
    High
    Consolidated non-GAAP earnings per diluted share
    $13.50 to $14.50
    high materiality
    High
    Foot Locker business operating income
    $110 million to $150 million
    medium materiality
    High
    DICK'S business preopening expenses
    approximately $90 million
    low materiality
    High
    Consolidated effective tax rate
    approximately 27%
    medium materiality
    High
    Net capital expenditures
    approximately $1.4 billion
    high materiality
    High
    Foot Locker acquisition related pretax charges
    approximately $200 million
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    DICK'S business
    Strong performance with broad-based strength across footwear, apparel, and hardlines. Continued market share gains and healthy consumer engagement across all income demographics.
    Average ticket: +5.5%Transactions: +0.5%2-year comp: +10.5%3-year comp: +15.8%
    		$3.37B6%—$361M operating income (10.69% of net sales)
    Foot Locker business
    First quarter of positive comps since Q4 FY24, driven by turnaround efforts including inventory cleanout, repaired vendor relationships, and successful Fast Break remodels. European business is behind the U.S. but promising.
    North America comp: +1.4%U.S. Foot Locker banner comp: +6.4%Merchandise margin: improvementFast Break stores comp: double-digit
    		$1.79B0.6% pro forma comp—$17.5M operating income (0.98% of net sales)

    Operational metrics

    13
    Consolidated net sales
    $5.16B+62.7% YoY
    Q1 FY27

    Driven by $1.79 billion contribution from Foot Locker business and 6% comp increase for DICK'S business.

    Consolidated non-GAAP gross profit
    $1.73B-328 bps YoY
    Q1 FY27

    Primarily driven by mix impact from the Foot Locker business.

    Consolidated non-GAAP SG&A expenses
    $1.33B+68.4% YoY
    Q1 FY27

    $480 million of this increase was driven by Foot Locker business.

    Consolidated non-GAAP operating income
    $378.4M
    Q1 FY27

    Compared to $360.4 million or 11.35% of net sales last year.

    Consolidated non-GAAP earnings per diluted share
    $2.90
    Q1 FY27

    Includes dilutive impact of 9.6 million shares issued for Foot Locker acquisition. Compared to $3.37 last year.

    GAAP earnings per diluted share
    $3.54
    Q1 FY27

    Includes $174 million pretax litigation and other settlements, partially offset by $97 million pretax Foot Locker acquisition-related costs.

    Cash and cash equivalents
    $1B
    Q1 FY27 end

    No borrowings on $2 billion unsecured credit facility.

    Quarterly dividends
    $114M
    Q1 FY27

    Paid during the quarter.

    Foot Locker acquisition pretax charges
    $390Mrecognized
    FY25

    Part of total $500M-$750M charges for cleanout and integration work.

    Foot Locker cost synergies
    $100M to $125M
    medium term

    Expected primarily from procurement and direct sourcing efficiencies; a portion expected in FY27.

    Vertical brand gross margin premium
    700 to 900 bpshigher
    Q1 FY27

    Higher gross margin than the average DICK'S margin.

    Consolidated non-GAAP income tax expense
    $106.2M
    Q1 FY27

    Effective tax rate shaped by mix of earnings in foreign jurisdictions and purchase accounting adjustments.

    Game Changer live streamed games
    50%record
    Q1 FY27

    Of all games covered on the platform were streamed live.

    Industry KPIs

    8
    MetricValueDetails
    Sg a OPEX ratio88 bpsbps
    Comparable sales+6%%
    Store count growth1stores
    Gross margin drivers-328 bpsbps
    Active customers nspac1.5 millionathletes
    Share buyback capital return$141MUSD
    Inventory position markdown risk$5.42BUSD
    Distribution supply chain cost economics6th distribution centerfacility

    Product announcements

    4
    ProductTypeDetails
    Coach IDEXXlaunch
    Game Changer product updateupdate
    Vuoriexpansion
    Gymsharkexpansion

    Deals & partnerships

    1
    Foot LockerAcquisition of Foot Locker business

    Acquisition of Foot Locker business, leading to significant contribution to consolidated net sales and dilutive impact on EPS.

    Risks & headwinds

    6
    Supply chain expensesQ1 FY27

    Headwind on a year-over-year basis

    Mitigation: Opening of 6th distribution center in Fort Worth to service the market more efficiently.

    Mix headwind from trading card businessQ1 FY27

    Slightly lower gross margin

    Mitigation: Considered an incremental opportunity, bringing new customers and driving trips, with overall math still allowing for gross margin expansion.

    Geopolitical and macroeconomic environmentRest of FY27

    Appropriate level of caution

    Mitigation: Balanced into guidance, maintaining top end of comp range.

    Effective tax rate increaseFull year FY27

    Approximately 150 bps higher than original expectation, unfavorably impacts non-GAAP EPS guidance by approximately $0.25

    Mitigation: Included in updated outlook; dynamics expected to persist, albeit to a lesser degree.

    Foot Locker acquisition related chargesFY27

    Approximately $200 million

    Mitigation: Excluded from non-GAAP EPS outlook; part of broader merger and integration work.

    DICK'S business operating margin decline in H1H1 FY27

    Most significant pressure expected in Q2

    Mitigation: Due to timing of planned SG&A investments (including marketing tied to World Cup) and preopening expenses for a higher number of House of Sport openings; expected to expand in H2.

    What to watch in Q2 FY27

    5

    Foot Locker comp sales growth

    Back-to-school season (Q2/Q3 FY27)
    Current0.6% pro forma comp in Q1 FY27
    TargetInflection point in back-to-school, with new assortment and marketing campaign

    Why it matters

    Key indicator of the success of the Foot Locker turnaround strategy and new merchandising efforts.

    And remember, we've always said that the inflection point here was going to begin in back-to-school which is the first time that the team bought the entire assortment. So we feel that inflection point in back-to-school is going to happen.

    Q&A highlights

    6

    What are the key drivers of the 6% comp in the DICK'S business, and why was profit flow-through not stronger given the strong comps?

    The 6% comp was driven by broad-based strength across categories, not one-time factors, reflecting successful long-term strategies and a healthy consumer. Lower Q1 flow-through was expected due to significant investments, but full-year operating margin leverage is still anticipated, primarily in the second half.

    “Our business is performing exactly as we had expected it to and as we guided. So in the first half, we said we were going to have higher comps than the second half. And we also were going and making significant investments in our business, which we did.”

    asked by Simeon Gutman · answered by Lauren Hobart

    2 min read6 chapters

    Detailed Narrative

    01

    DICK'S Business Momentum

    The core DICK'S business delivered a 6% comp sales growth in Q1 FY27, driven by broad-based strength across footwear, apparel, and hardlines. This performance builds on prior year increases and reflects successful long-term strategies, including differentiated product offerings, elevated store concepts like House of Sport, and enhanced athlete experiences. The company noted a healthy consumer across all income demographics and added 1.5 million new athletes to its database, indicating sustained engagement and market share gains.

    02

    Foot Locker Turnaround Progress

    The Foot Locker business achieved slightly positive comps and operating income in Q1 FY27, marking its first positive comp quarter since Q4 FY24. The U.S. Foot Locker banner specifically saw a 6.4% comp growth. This progress is attributed to inventory clean-up, repaired vendor relationships, rebuilt management teams, and the successful Fast Break store remodel initiative, which is right on schedule with management's expectations for an inflection point in back-to-school.

    03

    Fast Break Store Initiative

    The Fast Break remodel initiative, which focuses on a more curated shoe wall, improved storytelling, and reintroduction of apparel, expanded to approximately 190 stores in Q1 FY27, bringing the total to around 100 million across the expanded footprint. These stores delivered double-digit comps and meaningful merchandise margin improvement. The company plans to have approximately 250 Fast Break stores by back-to-school and further expansion by the holiday season, reinforcing conviction in this capital-light remodel strategy.

    04

    Strategic Investments and Real Estate

    DICK'S is investing in its business from a position of strength, opening one House of Sport and two Field House locations in Q1 FY27, with plans for approximately 13 and 20 more, respectively, for the year. The company is also enhancing its digital experience with initiatives like Coach IDEXX, an AI-powered digital agent, and expanding its distribution network with a new Fort Worth DC. These investments aim to redefine the athlete experience and strengthen brand partnerships.

    05

    Brand Partnerships and Assortment

    Strong relationships with national brands like Nike, Adidas, and Fanatics, as well as emerging brands such as Vuori and Gymshark, provide access to differentiated products and marketing support. The Foot Locker team had full control over buys for the upcoming back-to-school season, leading to excitement about the assortment, which will be supported by a bold brand relaunch designed to reconnect with consumers. This collaborative approach is seen as a key differentiator.

    06

    Capital Allocation and Synergies

    Net capital expenditures are expected to be approximately $1.4 billion for FY27, with 70% allocated to DICK'S and 30% to Foot Locker, focusing on store growth, technology, and supply chain. The company remains confident in achieving $100 million to $125 million in cost synergies from the Foot Locker acquisition over the medium term⏳, primarily from procurement and direct sourcing efficiencies, with a portion expected in FY27. This reflects a balanced approach to growth and profitability.

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