Memorandum
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- Connor Quincy via Fast Company
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- Business·5 min to read
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Foot Locker closes 110 stores as Dick's Sporting Goods lowers outlook
ReFoot Locker closes 110 stores as Dick's Sporting Goods lowers outlook
Dick's Sporting Goods has closed 110 Foot Locker-branded stores this year amid a difficult turnaround, reporting a 30% share drop after second-quarter earnings missed Wall Street expectations.
Dick's Sporting Goods has closed 110 Foot Locker-branded stores this year as the Pittsburgh-based retailer works through a challenging turnaround of the footwear chain it acquired in 2025. The closures come as Dick's reported a second-quarter earnings miss that sent shares down more than 30% in a single day, with the company lowering its operating income projections for the year.
The company reported earnings per diluted share of $3.50, down from $4.71 in the same period last year and below Wall Street's $3.76 prediction. Despite a 53% increase in consolidated net sales and $5.59 billion in quarterly profit, Dick's attributed the shortfall largely to Foot Locker's weak performance. Pro forma comparable sales for Foot Locker declined 3.6% in the second quarter, which executives blamed on challenging conditions in the footwear market.
Dick's acquired Foot Locker in September 2025 in a $2.4 billion deal, folding the 52-year-old brand into its sports apparel portfolio to strengthen its position in footwear. The company said it has initiated a review of unproductive assets, aiming to optimize inventory, close underperforming stores, and re-evaluate assets that do not align with its mission.
As of August 1, the company had closed 110 Foot Locker-branded stores across its various banners. The closures include 20 Foot Locker North America locations, 8 Champs Sports stores, 12 Kids Foot Locker locations, 44 WSS (Warehouse Shoe Store) locations, 16 Foot Locker Europe stores, 2 Foot Locker Asia Pacific locations, and 2 Atmos stores. Dick's said 67 of those closures were part of the asset review, while the company also relocated or remodeled 41 locations during the period. Foot Locker's business had 2,478 stores as of August 1, compared to 2,561 at the beginning of the period.
Dick's executives pointed to a highly competitive promotional environment, with brands clearing built-up inventory into the market. Ed Stack, executive chairman, said Foot Locker relies on "legacy footwear silhouettes" that are not performing as well as they once did, and noted that high discounts from competitors and fewer product launches are key challenges as customers gravitate toward new products.
The company lowered its overall net sales outlook for the year to between $22.1 billion and $22.4 billion, while still expecting full-year comparable sales growth in the 2.5%-4% range. Operating margins are now expected to land between 10.6% and 10.9%, down from prior expectations of 11%-11.4%. Dick's also raised its dividend to $1.25 per share, up from $1.21.
"While second quarter results met our expectations and we believe that underlying trends remain healthy, we are taking a more cautious view of the second half of this year given the marketplace conditions we saw in Q2," said Dick's CFO Navdeep Gupta.
Dick's is not alone in facing headwinds in athletic retail. Adidas's stock dropped 12% at the end of July despite a revenue boost from the FIFA World Cup, and Under Armour and On Holding have also struggled this year. Nike recently closed two dozen stores across 12 states as it streamlines its retail footprint.
On an earnings call, a JPMorgan analyst asked whether the footwear cycle is experiencing a hangover as innovation slows. Stack replied that "we have the hangover right now," noting that almost every brand is going through a reset.
Despite the difficult quarter, Dick's executives said they expect the promotional environment to remain challenging at least through the fourth quarter, especially in competitive European markets. Stack expressed continued confidence in the turnaround effort, saying, "Let me be clear: We believe the Dick's business remains strong, and none of this changes our confidence in the long-term opportunity at Foot Locker. We are still early in the Foot Locker turnaround."
Shares of Dick's Sporting Goods Inc (NYSE: DKS) were down more than 45% over the last 12 months following the decline.
