Dick's Sporting Goods (DKS) reported its first fiscal quarter 2026 results, revealing that while its acquisition of Foot Locker is showing signs of returning to growth, the associated costs are impacting the parent company's profitability. The sporting goods giant fell short of Wall Street's earnings per share expectations for the quarter, despite exceeding revenue forecasts.
During the three months ending May 2, Dick's Sporting Goods incurred significant charges related to the Foot Locker acquisition. These charges amounted to $96.5 million, which included $53.8 million for merger and acquisition expenses such as severance packages and store closures, and an additional $42.7 million designated for clearing excess inventory through sales. These one-time expenses directly contributed to the earnings miss.
Despite the bottom-line impact, the company's top-line performance was stronger than anticipated. Revenue for the quarter reached $5.17 billion, an increase of approximately 63% from $3.17 billion in the prior year, largely due to the integration of Foot Locker into its business. This revenue figure surpassed Wall Street's expectations of $5.09 billion.
On a comparable sales basis, the turnaround efforts at Foot Locker are beginning to yield positive results. Foot Locker reported a comparable sales growth of 0.6%, marking the first time this metric has increased since the end of fiscal year 2024. Concurrently, Dick's own namesake stores experienced a robust comparable sales climb of 6%. This combined effort resulted in an overall comparable sales growth of 4.1% for the company.
Specifically within Foot Locker U.S., where Dick's has concentrated much of its strategic turnaround initiatives, comparable sales saw a significant increase of 6.4%. This indicates that the targeted strategies for the legacy sneaker store are gaining traction.
However, the financial performance on an adjusted basis showed Dick's earning $2.90 per share, slightly below the $2.92 per share anticipated by analysts surveyed by LSEG. In the same quarter, Dick's reported a net income of $319.82 million, or $3.54 per share, an improvement from $264.29 million, or $3.24 per share, recorded in the same period last year.
Following these first-quarter results, Dick's Sporting Goods has adjusted its financial outlook for fiscal year 2026. The company has tightened its guidance for comparable sales growth for both its namesake brand and Foot Locker. The Dick's business is now projected to grow between 2.5% and 4%, an upward revision from the previous forecast of 2% to 4%. Foot Locker is expected to see growth between 1.5% and 3%, an increase from the prior guidance of 1% to 3%.
Guidance Adjustments
Despite the positive comparable sales trends, Dick's has lowered its guidance for consolidated operating income and overall earnings for fiscal year 2026. The company now anticipates consolidated operating income to fall within the range of $1.69 billion to $1.81 billion, a decrease from the previously projected $1.71 billion to $1.83 billion. Earnings per share for 2026 are now expected to be between $13.27 and $14.27, down from the earlier forecast of $13.70 to $14.70.
On the positive side, Dick's continues to expect adjusted earnings per share to range between $13.50 and $14.50, with the upper end of this range exceeding the high-end analyst expectation of $14.32 per share. Net sales for the year are projected to be between $22.1 billion and $22.4 billion, aligning closely with market expectations of $22.4 billion. Furthermore, the company raised its adjusted operating income guidance to a range of $1.71 billion to $1.83 billion, up from $1.68 billion to $1.81 billion previously.
Dick's Sporting Goods has been actively working to leverage Foot Locker's extensive store network and distinct customer base. This strategy involves closing underperforming locations, refining product assortments, and experimenting with new store formats. A key initiative is the
