Dive Brief:
- The Foot Locker turnaround is showing green shoots, including the first positive comps since the end of 2024, Dick’s Executive Chairman Ed Stack said on the company’s earnings call Wednesday.
- The sporting goods retailer raised full-year comps guidance across both Foot Locker and Dick’s on the back of the strong results. The Dick’s business in the quarter recorded comps and net sales up 6%.
- As it pursues a revamp of the Foot Locker business, Dick’s has refreshed around 100 store locations and continues to plan for 250 by back to school. This back-to-school season will also be the first time Dick’s has been in charge of merchandise buys for Foot Locker.
Dive Insight:
Another strong quarter at Dick’s Sporting Goods has dispelled some of the concerns over the company’s acquisition of Foot Locker.
“The danger with the acquisition was that it would prove to be a distraction from the core business and would ensnare Dick’s in a long period of adjustment. However, this does not seem to be happening,” GlobalData Managing Director Neil Saunders said in emailed comments. “Dick’s has got right to the heart of the issues at Foot Locker – focusing on the basics like writing-off old inventory, reducing styles to create clearer presentation, and rationalizing the store fleet … All of this suggests that Foot Locker wasn’t so much broken as improperly managed.”
While Dick’s still has work to do in improving the business — including in Europe, where the turnaround is taking longer — the company has already made meaningful strides in resetting some core elements of the retailer. Part of that is the Fast Break initiative, which is focused on refreshing Foot Locker’s stores with an increased apparel assortment, a smaller number of footwear SKUs and overall improved merchandising.
Comps at those locations were up double digits in Q1, according to Stack.
“We’re right on schedule,” Stack said of the Foot Locker turnaround, noting that Dick’s has not only cleared out inventory, but also repaired relationships with vendors who had become “disenchanted” with Foot Locker.
The company is also planning a brand relaunch for Foot Locker, intended to bring customers back to the brand.
“While there is a lot more work to do, especially on the international side of the Foot Locker operation, the results to date have been impressive,” Saunders said, noting comps up 0.6% and a small profit. “While these gains are somewhat shallow, they are still a clear win that underscores the dramatic improvement over a short space of time. Foot Locker might not yet be pulling its full weight, but on the current trajectory it looks like it will be a valuable addition to Dick’s.”
Meanwhile, the Dick’s business notched broad-based strength across its entire portfolio, according to CEO Lauren Hobart. She said consumers are responding to newness and innovation across the assortment and are not showing signs of trading down. Dick’s recently added brands, including Vuori and Gymshark.
“For many quarters now, we have seen our consumer hold up really, really well,” Hobart said, noting growth across all income demographics in Q1.
The retailer is continuing apace with openings of its House of Sport and Field House stores, and, according to Hobart, is landing solid locations as the concepts continue to perform. Dick’s is also investing in AI with the recent launch of Coach by Dick’s, a conversational agent in the mobile app that gives shoppers tailored recommendations, training tips and other advice.
