A Member of Pat McKeough’s Inner Circle recently asked for his advice on Dick’s Sporting Goods Inc., the largest omni-channel sporting goods retailer in the U.S.
Pat likes the firm’s dominant platform which includes e-commerce spending as well as physical store presence and sales. However, he also notes there are meaningful execution risks tied to integrating its recent $2.4 billion Foot Locker acquisition, plus macroeconomic pressures that could weaken family sports spending.
Dick’s Sporting Goods Inc. (Symbol DKS on New York; www.dickssportinggoods.com) is a U.S. retailer focused on sporting goods.
In 1948, 18-year-old Dick Stack opened a bait-and-tackle shop in Binghampton, New York. By the late 1970s, he had expanded his product line to include much of what the company sells today. This includes sports equipment, apparel, footwear, and accessories.
Dick’s serves athletes and outdoor enthusiasts in more than 722 Dick’s Sporting Goods stores. The company also owns and operates specialty concept stores: 112 Golf Galaxy locations, three Public Lands outlets, and 52 Going Going Gone! stores. Plus, Dick’s offers its products online and through mobile apps.
In addition, the company owns and operates Dick’s House of Sport stores. These offer recreational experiences that feature the company’s products. Those activities include the use of turf fields, rock-climbing walls and golf simulator bays. The company currently has 22 of these stores. By 2027, it plans to have 75 to 100 stores.
Dick’s also owns and operates Golf Galaxy Performance Centers. These have Trackman golf technology and a specialist staffing and servicing model. Specifically, staff seek to become trusted advisors to golf enthusiasts of all levels.
Dick’s carries a wide variety of well-known brands. These include Adidas, Callaway Golf, New Balance, and Nike.
On September 8, 2025, Dick’s completed its acquisition of Foot Locker (symbol FL on New York), a leading footwear and apparel retailer, for $2.4 billion.
The acquisition provides Dick’s with a global platform for growth. Foot Locker’s store banners include Foot Locker, Kids Foot Locker, Champs, and others. The retailer has about 2,400 stores across 20 countries, including the U.S., Canada, the U.K., Australia, and New Zealand.
Foot Locker’s revenues were approximately $8 billion in 2024, down from $12.37 billion in 2022. Dick’s plans to operate Foot Locker as a standalone business unit within its portfolio and maintain the Foot Locker brands.
Dick’s faces challenges amid its growth opportunities
In the three months ended August 2, 2025, Dick’s revenue rose 5.0%, to $3.65 billion from $3.47 billion a year earlier. Same-store sales also rose 5.0%.
Excluding one-time items, Dick’s earned $355 million in the latest quarter. That was down 1.9% from $362 million on higher expenses, including for interest. Per-share earnings rose slightly, to $4.38 from $4.37, on fewer shares outstanding.
Dick’s must contend with an intensely competitive and continually changing industry. The company also depends on consumer discretionary spending, which can suffer under deteriorating economic conditions. These include tariffs, rising inflation and interest rates, and recessions.
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Meantime, the U.S. sports industry stands to benefit from a number of events over the next several years. These include continuing excitement around women’s sports (including Caitlin Clark and the WNBA), next year’s Soccer World Cup on U.S. soil, the 2028 Los Angeles Olympics and the 2031 Rugby World Cup, which will be held in the U.S. for the first time.
Dick’s, with its ability to find new and innovative ways of building its customer base—including the acquisition of Foot Locker—should see rising revenue and earnings from these events in the years to come. Note, though, that Foot Locker has underperformed for some time, and needs to be successfully turned around.
Currently, the stock trades at an attractive 13.9 times the forecast 2026 earnings of $14.90 a share. Dick’s raised its quarterly dividend by 10.2% with the April 2025 payment, to $1.212 a share from $1.10. The stock yields 2.3%.
Recommendation in Pat’s Inner Circle: Dick’s Sporting Goods Inc. is okay to hold.
