UPDATED, May 15, 7:33 a.m.
In a game-changing deal for the athletic industry, Dick’s Sporting Goods confirmed Thursday morning that it is acquiring Foot Locker Inc. for $2.4 billion, or about $24 a share.
The deal, expected to close in the second half, will dramatically alter the retail landscape — giving Dick’s major international presence and huge leverage with big brands like Nike and Adidas.
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Shares of Foot Locker shot up 83 percent to $23.65 as of 7:30 a.m., while Dick’s Sporting Goods stock fell more than 8 percent to $191.59. (It is not uncommon for a company about to make a big purchase to see its stock fall on the news given the integration risks involved.)
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The WSJ first reported the news of a potential deal on Wednesday.
Foot Locker Inc — which owns Foot Locker, Kids Foot Locker, Champs Sports, WSS and Atmos, counts 2,400 stores across 20 countries. Foot Locker reported revenues of $8 billion in 2024.
On Thursday morning, Foot Locker reported preliminary first quarter results below expectations as the company said it experienced softer traffic trends globally. In Q1 2025, comparable sales decreased by 2.6 percent from the prior-year period, with comparable sales in the North America region decreasing by 0.5 percent. Net loss is expected to be $363 million in Q1, as compared with net income of $8 million in the prior-year period.
Foot Locker noted that it expects to report its full first quarter earnings on May 29.
“We have long admired the cultural significance and brand equity that Foot Locker and its dedicated Stripers have built within the communities they serve,” Ed Stack, executive chairman of Dick’s Sporting Goods, said in a statement. “We believe there is meaningful opportunity for growth ahead. By applying our operational expertise to this iconic business, we see a clear path to further unlocking growth and enhancing Foot Locker’s position in the industry. Together, we will leverage the complementary strengths of both organizations to better serve the broad and evolving needs of global sports retail consumers.”
Mary Dillion, chief executive officer of Foot Locker, added that this announcement “marks the start of an exciting new chapter” for Foot Locker.
“By joining forces with Dick’s, Foot Locker will be even better positioned to expand sneaker culture, elevate the omnichannel experience for our customers and brand partners, and enhance our position in the industry,” Dillion said. “We are pleased to provide shareholders with a transaction structure that offers the choice of significant and immediate cash value or the opportunity to invest in the combined company and benefit from the substantial upside potential. I am proud of all that our teams around the world, including our Stripers, have accomplished to reach this milestone moment, and am confident this transaction represents the best path for our shareholders and other stakeholders.”
Neil Saunders, managing director of GlobalData, called Dick’s reported bid “a bold move to consolidate the chain’s power in the sporting goods arena and to provide it with a steeper growth trajectory.”
“That said, if the purchase goes through, Dick’s would be inheriting a business that remains on the back foot,” Saunders said. “While Foot Locker has made some strides in improving its stores and operations, its market share has fallen by 1.8 percentage points since 2019 and the comeback is not yet fully in play. However, this might be to Dick’s advantage as it could engineer a recovery with its extensive retail skills and add significant value over the price it has offered.”
In March, Foot Locker delivered fourth-quarter results above its previously revised expectations, as the company noted that investments and execution drove positive comparable sales and “meaningful” gross margin improvement compared to the prior year.
Total sales in the fourth quarter of 2024 were $2.24 billion, down 5.8 percent from $2.38 billion the same period in 2023.
For the full fiscal year of 2024, Foot Locker said total revenue was $7.99 billion, down from $8.17 billion in fiscal 2023. Net income from continuing operations in the year was $18 million, up from a $330 million loss last year.
Foot Locker promoted Franklin Bracken to the role of president in March to help accelerate the execution of its Lace Up Plan, the strategic plan laid out in 2023 to elevate the omni-retail experience, enhance productivity and create long-term shareholder value.
If Dick’s and Foot Locker do cut a deal, it would come quickly on the heels of Skechers $9 billion go-private agreement with Brazilian private equity firm 3G Capital. The monumental deal is considered to be the biggest shoe buyout in history.
The deal activity comes at a time when the footwear industry, which is heavily exposed to China and other Asian production hubs, is under intense pressure.