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Foot Locker Inc.’s sales slump persisted in the latest quarter, a potential headache for Dick’s Sporting Goods Inc. as it prepares to acquire the struggling sneaker chain.
Comparable-store sales fell 2.6 percent in the three months ended May 3, more than analysts expected. In light of the pending transaction with Dick’s Foot Locker nixed guidance and said it won’t have a conference call to discuss its results.
The $2.4 billion deal with Dick’s, announced earlier this month, will link two companies with very different business models. Foot Locker’s operations will add a global network of about 2,400 locations, most of which are in malls, to Dick’s fleet of around 800 big-box sporting goods stores in the US.
Foot Locker shares were flat at 6:48 a.m in premarket trading in New York. The stock has risen 9.8 percent this year through Wednesday’s close, bolstered by a sharp increase when the Dick’s agreement was announced.
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Foot Locker has been trying to spark a comeback under chief executive officer Mary Dillon, who has prioritised store renovations, a customer loyalty program and a digital overhaul since taking over in 2022. The retailer fell into a slump as Nike Inc. pulled back from wholesale partners such as Foot Locker in favour of its own stores and website — a decision the sneaker company has since reversed.
Dick’s executive chairman Ed Stack, who’s also the son of the company’s founder, defended the decision to acquire Foot Locker on Wednesday. He said the deal will strengthen ties with brands, save costs and position Dick’s for long-term growth.
“What the Street needs to understand is that, like it or not, we don’t make investments or decisions for a quarter or two,” Stack told investors and analysts on a conference call. “We make these decisions and investments for a lifetime.”
By Kim Bhasin
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Change Is Coming to the Sneaker Retail Landscape
Dick’s Sporting Goods’ acquisition of Foot Locker will have impacts on the rest of the industry, from brands such as Nike and Adidas to rival retailers like JD Sports.
