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By Brian Nelson, CFA
Dick’s Sporting Goods (DKS) recently reported fourth quarter results that beat expectations on both the top and bottom lines. During the quarter, net sales increased 59.9% as it folded in its Foot Locker business, while consolidated non-GAAP earnings per diluted share came in at $3.45, down 5% from the year-ago period. Comparable sales for its Dick’s business was 3.1% in the quarter, while its operating margin advanced 88 basis points. Net income from its Dick’s business increased 10% in the quarter, while non-GAAP diluted earnings per share increased 12%.
Management had the following to say about the results:
2025 was another strong year for the DICK’S Business, with growth in comps and EPS exceeding our expectations. We’ve now owned the Foot Locker Business for about six months and our excitement and our conviction in the long‑term opportunity continue to grow. We’re very encouraged by what we’re seeing with our Fast Break initiative, the evolution of our 11-store Foot Locker pilot, which we plan to rapidly scale in 2026. In addition, our “clean out of the garage” efforts have set up Foot Locker to play offense and deliver the inflection point we expect beginning with back-to-school. We remain very confident that DICK’S and Foot Locker are stronger together, and I want to thank our more than 100,000 teammates across the globe for their commitment and execution every day.
We’re very proud of our company’s Q4 results. In the DICK’S Business, our strong execution powered a great holiday season and another strong quarter with comp growth over 3% and double-digit non-GAAP EPS growth. It was a terrific year overall with comps of 4.5%, gross margin expansion, and non-GAAP operating margin of over 11%. DICK’S and Foot Locker are perfectly positioned at the intersection of sport and culture which is becoming an even stronger part of everyday life. For 2026, we expect to drive continued comp growth, strategic expansion of our square footage, and strong profitability for the DICK’S Business. We also look forward to returning the Foot Locker Business to both top-line and bottom-line growth in 2026. We have deep conviction in the tremendous opportunity ahead for our entire company.
Looking to 2026, Dick’s Sporting Goods expects net sales in the range of $22.1-$22.4 billion and operating income in the range of $1.68-$1.81 billion on a non-GAAP basis. Earnings per share is targeted in the range of $13.50-$14.50 for the year on a non-GAAP basis. Capital expenditures are expected to be $1.7 billion on a gross basis, $1.5 billion on a net basis. Management expects to open roughly 14 additional House of Sport locations and roughly 22 additional Dick’s Field House locations in 2026. On a segment basis, comparable store sales for its Dick’s business in the year is targeted to be positive 2% to positive 4.0%, while comparable store sales for its Foot Locker business is targeted to be positive 1.0% to positive 3.0%. Management raised its dividend 3% to an annualized rate of $5.00 per share, and we continue to like shares in the Dividend Growth Newsletter portfolio.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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