With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

The Pittsburgh-based retailer increased its revenues and its risks in 2025 by acquiring Foot Locker, the struggling sneaker seller. The $2.5 billion deal made Dick's one of the top distributors of brands like Nike and Adidas; efforts to turn around Foot Locker's underperforming stores have shown some promising signs this year.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

See which workplaces made this year's list.

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Employees say:"The executive leadership present and perform as very normal individuals making themselves level with the entire team across the organization. This is how approachable and communicative they are to work with. That is exemplary in my opinion. There are zero barriers for any team member to ask questions, raise concerns, give suggestions, and work independently. This is the best place to work by far!"

Best Large Workplaces in Retail

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Employees say:"The culture DSG is unlike any I've experienced before - welcoming, helpful, encouraging, positive - it really feels like I'm part of an actual sports team! There are plenty of opportunities, but no pressure, to join a multitude of groups from business-related to recreational sports. The total compensation package is generous and there are lots of other perks. I really appreciate the hybrid work schedule. Also, DSG gives back in spades to the communities we serve which I love!"

Industries included in the sector are automotive retail, general merchandisers, internet retail, and specialty retail.

Fortune Sector Leaders: Retailing

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The 300 companies on this list are transforming industries from the inside out.

GPTW 2023 Best Workplaces Retail Large DICK'S Sporting Goods_4

Employees say: 
 
"Dick's Sporting Goods's focus on DE&amp;I efforts, and how we know the work is never done and continues to be a passion, along with our focus on sustainability."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Employees say: 
 
“What I appreciate about this place is the sense of a community feeling when you need it in addition to this just being a place where I work. We have chat groups about parenting and all things related or unrelated that we can get ideas/advice no matter where we live across the country and meet new co-workers. In addition we have resource groups of those interested helping each other throughout their career at work no matter who they are which also gives more opportunity to meet someone outside of their normal business interaction.”

This year’s Fortune 500 marks the 68th running of the list.

See which retailers made this year's list.

Best-Workplaces-Retail-2021-DICK'S-Sporting-Goods

Employees say: 
 
“It is a company that provides to those across all ages, races, and genders and I see that same in the workplace. Opportunities at all levels of the organization are for everyone who works hard.”

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-320-Dick's Sporting Goods

Dick's Sporting Goods, the country's largest athletics and fitness retailer, moved up 42 spots on the Fortune 500 this year, powered by a solid 9.5% increase in sales in 2020. In the first quarter of 2021, Dick's beat analyst estimates, reporting net income of $361.8 million compared to a loss of $143.4 million a year ago.

This year's Fortune 500 marks the 66th running of the list.

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The Pennsylvania-based sporting goods retailer operates hundreds of stores across the U.S.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Retailer Dick’s Sporting Goods offers a wide selection of sporting goods equipment, fitness gear, golf products, fishing gear, apparel, footwear, and accessories. The company’s portfolio includes specialty concept stores such as Golf Galaxy, Public Lands, Going Going Gone!, and Dick’s House of Sport. Dick’s Sporting Goods was founded in 1948.

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Dick's Sporting Goods (DKS): Company Profile, Stock Price, News, Rankings

legacy

Dick's Sporting Goods

dick's sporting goods

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome you to the DICK'S Sporting Goods Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Thank you. I would now like to turn the conference over to Nate Gilch, Senior Director of Investor Relations. Nate, please go ahead.

Good morning, everyone, and thank you for joining us to discuss our second quarter twenty twenty five results. On today's call will be Ed Stack, our Executive Chairman Lauren Hobart, our President and Chief Executive Officer and Navdeep Gupta, our Chief Financial Officer. A playback of today's call will be archived on our Investor Relations website located at investors.dicks.com for approximately twelve months. As a reminder, we will be making forward looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our last annual report on Form 10 ks and our most recent quarterly report on Form 10 Q as well as cautionary statements made during this call. We assume no obligation to update any of these forward looking statements or information. Please refer to our Investor Relations website to find the reconciliation of our non GAAP financial measures referenced in today's call. Finally, for future scheduling purposes, we are tentatively planning to publish our third quarter twenty twenty five earnings results on 11/25/2025. With that, I will now turn the call over to Ed.

Thanks, Nate. Good morning, everyone. As announced earlier this morning, we delivered a very strong second quarter with comps of 5%. Our momentum continues to build, which is a clear reflection of the strength of our long term strategies and investments. We're really in a great lane.

The convergence of sport and culture has never been stronger and we're seeing tremendous momentum and opportunity across our industry. As a company rooted in sport, Vicks is uniquely positioned to seize this opportunity. We have a deep understanding of our athletes and we execute with precision. From our differentiated on trend product assortment, our industry leading omnichannel athlete experience, we're operating from a position of strength. Before Lauren and Navdeep take you through the Q2 details, I'd like to provide a brief update on our pending acquisition of Foot Locker.

As previously shared, Foot Locker shareholders approved the transaction. We've also received all regulatory approvals and we anticipate the transaction will close on September 8. We remain very enthusiastic about the strategic benefits from the deal. By bringing together Dickson Foot Locker's iconic brands, we will create a global leader in the sports retail industry to serve a broader set of consumers, strengthen our partnerships with the world's leading sports brands and meaningfully expand our total addressable market. We look forward to providing more details on our plans for Foot Locker on our third quarter call.

I will now turn the call over to Lauren, who will go over our Q2 results and full year outlook.

Thank you, Ed, and good morning, everyone. We are very pleased with our strong Q2 results. As Ed said, our performance continues to show how well our long term strategies are working, the strength and resilience of our operating model and our team's consistent execution. Our sustained momentum is powered by our compelling omni channel athlete experience, differentiated product assortment, best in class teammate experience and our ability to create deep engagement with the Dick's brand. Today, we're raising our full year outlook.

This updated guidance reflects our strong Q2 results and the ongoing confidence we have in our business, grounded in our team's execution of the four strategic pillars I just mentioned. We now expect comp sales growth for the year to be in the range of 2% to 3.5% and EPS to be in the range of $13.9 to $14.5 Now moving to our results. Our Q2 comps increased 5% with growth in average ticket and transaction. These strong comps were on top of a 4.5% increase last year and a 2% increase in 2023 and we continue to gain market share from online only and from omni channel retailers. Our second quarter gross margin expanded over 30 basis points and we delivered non GAAP EPS of $4.38 As we continue to execute against our strategic pillars, we're seeing strong momentum across the three growth areas that we are focusing on for this year.

First, we're making great progress repositioning our real estate and store portfolio. This past quarter we opened one additional House of Sport location and in Q3 we expect to open 13 more marking our highest number of House of Sport openings within a single quarter. We continue to expect to open approximately 16 total House of Sport locations this year, which will bring our year end total to approximately 35. We also added four new Fieldhouse locations in Q2. We expect to open six more in Q3 and are on track to open approximately 15 total for the year taking us to approximately 42 by year end.

These investments are driving powerful financial results, strong engagement with our athletes, brand partners and communities and importantly, they're laying the foundation for sustainable long term profitable growth. Second, supported by our differentiated product access and flagship vertical brands, our focus on driving growth in key categories is fueling significant athlete excitement and demand across our portfolio. In fact, during Q2 more athletes purchased from us, they purchased more frequently and they spent more each trip compared to the same period last year. We remain encouraged by the strong product pipeline from our brand partners. And third, our multibillion dollar highly profitable e commerce business is standing out as a growth driver, once again growing faster this quarter than the company overall. Our app has been instrumental in creating a strong launch culture across key categories, driving energy and sell through.

At the same time, our stores are executing at a very high level. They're building an athlete centric service and selling culture and really bringing our differentiated product assortment to life for our athletes. Lastly, as part of our broader digital strategy, we're harnessing the power of our athlete data and remain very enthusiastic about the long opportunities we see with Game changer and the Dick's Media Network. I want to close with a brief comment on how enthusiastic I am about the future growth potential of the Dick's and Golf Galaxy businesses as well as the compelling range of opportunities that we see in our acquisition of Foot Locker. We've talked a lot about the strategic and financial benefits of this transaction. And as we continue on the path to closing, we remain confident in those benefits and expect a really exciting future for both companies. Before concluding, I'd like to thank all of our teammates across the company for their outstanding efforts and continued commitment to DICK'S Sporting Goods.

Their passion and hard work are the driving force behind these results. With that, I'll turn it over to Navdeep to share more detail on our financial results and 2025 outlook. Navdeep, over to you.

Thank you, Lauren, and good morning, everyone. Let's begin with a brief review of our second quarter results. We are very pleased to deliver a consolidated sales increase of 5% to $3,650,000,000 As Lauren said, our Q2 comps increased 5% and we continue to gain market share from online only and from omni channel retailers. This growth represents a nine point five percent two year comp stack and eleven point five percent three year comp stack. These strong comps were driven by a 4.1% increase in average ticket and a 0.9% increase in transactions.

We saw broad based strength across our key categories. Gross profit for the second quarter remained strong at $1,350,000,000 or 37.06% of net sales and increased 33 basis points from last year. This increase was driven by higher merchandise margin and leverage on occupancy costs due to higher sales. On a non GAAP basis, SG and A expenses increased 9.9% to $864,000,000 and deleveraged 105 basis points compared to last year's non GAAP results. As we discussed previously, this year over year deleverage was expected and driven by strategic investments digitally, in store and in marketing to better position ourselves over the long term.

Preopening expenses were $12,300,000 an increase of $3,400,000 compared to the prior year. Non GAAP operating income was $475,000,000 or 13.02 percent of net sales. This compares to non GAAP operating income of $480,500,000 or 13.83% of net sales in 2024. Non GAAP EBT was $472,600,000 or 12.96 percent of net sales. This compares to EBT of $482,300,000 or 13.89% of net sales in Q2 of last year.

In total, we delivered non GAAP earnings per diluted share of 4.38 This compares to earnings per diluted share of $4.37 last year. On a GAAP basis, our earnings per diluted share was $4.71 This includes non cash gains from non operating investment in Foot Locker stock as well as merger and integration and financing costs related to the pending Foot Locker acquisition. For additional details on this, you can refer to the non GAAP reconciliation tables of our press release that we issued this morning. Now looking to our balance sheet, we ended Q2 with approximately $1,200,000,000 of cash and cash equivalents and no borrowings on our new $2,000,000,000 unsecured credit facility. Our quarter end inventory levels increased 7.1% compared to Q2 of last year.

As we enter into Q3, we believe our inventory is well positioned to continue fueling our sales momentum. Turning to our second quarter capital allocation. Net capital expenditures were $213,000,000 and we paid $96,000,000 in quarterly dividends. Now moving to our outlook for 2025, which does not include acquisition related costs, investment gains or results from previously announced Foot Locker acquisition. As Lauren said, we are raising our expectation for comp sales and EPS.

Our updated guidance reflects our strong Q2 performance and includes expected impact from all tariffs currently in effect. Our guidance balances our confidence in the outcomes we are driving through our strategic initiatives and our operational strength against the ongoing complex and dynamic macroeconomic environment. We now expect full year comp sales growth in the range of 2% to 3.5% compared to our prior expectation of 1% to 3% growth. Consolidated sales are expected to be in the range of $13,750,000,000 to $13,950,000,000 compared to our prior expectation of $13,600,000,000 to $13,900,000,000 Driven by the quality of our assortment, we expect to drive gross margin expansion for the full year. We anticipate this expansion to be offset by SG and A deleverage as we are making strategic investments digitally, in store and in marketing to better position ourselves for the long term.

We continue to expect full year preopening expenses to be in the range of $65,000,000 to $75,000,000 For the back half, we expect most of the preopening expenses to be concentrated in third quarter to support our 13 planned House of Sport and six Fieldhouse openings. We continue to expect operating margins to be approximately 11.1% at midpoint. And at the high end of our expectations, we continue to expect to drive approximately 10 basis points of operating margin expansion. We now expect EPS in the range of $13.9 to $14.5 compared to our prior expectation of $13.8 to $14.4 As contemplated in our 2025 annual plan, we expect EPS to decline year over year in Q3 and increase in fourth quarter. Our earnings guidance is based on approximately 81,000,000 average diluted shares outstanding and an effective tax rate of approximately 25% compared to our prior expectation of approximately 24%.

We continue to expect net capital expenditures of approximately $1,000,000,000 for the full year. In closing, we are very pleased with our second quarter performance and the success of our long term strategy. We remain very enthusiastic about the future of our business. This concludes our prepared remarks. Thank you for your interest in DICK'S Sporting Goods. Operator, you may now open the line for questions.

Thank you. We will now begin the question and answer session. Your first question comes from the line of Brian Nagel with Oppenheimer. Please go ahead.

Good morning. Nice quarter. Congratulations.

I want to focus on your pending acquisition in Foot Locker. So Foot Locker reported results just recently, stark contrast to Dick's, mean, much weaker. So the question I want to ask is, I mean, as you're thinking about this acquisition, which will close shortly, any update on, you know, how you plan to revitalize, if you will, that that Foot Locker business under the under Dick's ownership in the in the in the timing of your key initiatives there?

Actually, it looks like we may have lost Ed. Ed is actually in Europe visiting some Foot Locker stores. Ed, are you there? Nope. We can't hear you.

So I will answer the question, Brian, and we'll work to get Ed's line restored. Ed, try one more time. Nope.

Okay. So thank you for the question. We really appreciate it. We see a tremendous opportunity with the Foot Locker business. We think this acquisition is going to be great for our consumers, our employees, our vendor partners, and also our shareholders.

And the more time that we spend in our with the Foot Locker team both at our various headquarters and also in the stores with the Stripers, we are increasingly optimistic and and this is a team that really, really wants to win. What we plan to do, we are going to be working with our brand partners who are very excited about the the opportunity to turn the business around, who are already sharing really strong insights. We plan to invest in stores. We plan to invest in marketing, and we know that there are opportunities from a core merchandising standpoint.

We're excited about apparel opportunities and also bringing in a new assortment of of products.

So across the board, we're very excited. Brian, I would say we haven't closed the transaction yet. So we are at September 8 moving toward toward doing that, and we will be back to you in our q three call with more specific details. But rest assured, we are very excited about the opportunity that we see in Foot Locker, and we we are moving forward with with a lot of enthusiasm.

Thank you, Lauren. I appreciate the details. And then if

I can just focus, big picture, but I'm more, I guess, on on the DICK'S business. Just, you know, the pop of du jour, if you will, the tariffs. You know, to what to so where is Dick's on the within the tariff conversation, your mitigation efforts? And to the extent that either Dick's or your supply partners have started to adjust prices, have you seen any actual or any impacts upon demand on the part of your consumers?

Thanks, Brian. We actually we come off a quarter where we had 5% comps, and we're feeling really strong about all aspects of our business. Our long term strategies are clearly working, everything from the differentiated assortment that we have in the stores, our athlete experience, which we continue to invest in and reinvent in our stores, our online business, our app, but also in our reinvention of our product of our portfolio of stores with our house of sport and our field house concept. So I I would point to the execution of our team, which has just been absolutely extraordinary. And their passion to win and their passion to produce results are really driving so much of our business.

As you look to the back half, we just did take up our our top line and bottom line guidance, and that includes all of the impact of tariffs that we see. We did also just come off of a Q2 where our gross margin expanded and we are navigating very well through an uncertain tariff environment. We've seen some sporadic price increases, but they are surgical and and not across the board. And we're seeing our consumer obviously with a 5% comp. We're seeing the consumer respond really well.

So I'm very pleased that we are navigating well and still increasing our guidance and our gross margin for the back half.

That's very helpful. I appreciate it. Thank you.

next question comes from the line of Simeon Gutman with Morgan Stanley. Please go ahead.

Hey, good morning everyone. So Lauren, you mentioned the business is vibrant. Can you talk about the second half comp assumptions? Are there any signs that the consumer is slowing in any categories? Is there some just caution because of comparison and maybe tariff impact that the consumer could face?

Yes. Thanks for the question, Simeon. We are not seeing any signs of slowdown with the consumer. In fact, one of the most exciting things about the quarter that we just delivered is the broad based nature of the growth that we saw. We saw growth across all of our key segments.

So footwear, apparel, team sports, and golf, all doing really, really well. So we we do not see signs that the consumer is slowing. I would say, if anything, if you look to the assortment and the partnership that we have with our key brands, there is a trend toward innovation and newness in the products that are coming down the pike that are keeping the consumer really, really energized, they're responding very well to some of that techno technicity that's all in the product, both, again, hardlines and softlines. So we're seeing with that launches as well as apparel as well as technical running and and the new running constructs that are out in the market. So we think we're gonna be navigating really well.

We did just take our comp assumptions up for the back half. So so we are confident we can deliver that guidance. Yes.

So, Minh, just to build on what Lauren said, as you can imagine, you know, the the the overall macroeconomic situation continues to remain dynamic, and that's the reason we continue to have India a range of an outlook that we have provided. But the things that we control, the core strategy, the assortment that we have access to, how well our inventory is positioned for for the back half, we are really excited about, all the opportunities that we continue to see ahead of us.

Okay. And then my follow-up on margin, there's maybe like a near term component and then a medium term. The near term gross, the language in the presentation changed a little bit and I don't know if you mentioned merch margin in Q2. So some clarification on the level of expansion you expect plus what happened in Q2. And then the medium term question is more on expenses within the margin.

At what point does the leverage threshold of the business change, meaning you have the curve of House of Sport expense, technology, whatever else you're dealing with in SG and A? When does that level off such that the comp leverage point actually moderates or at least stabilizes?

Yeah. So, Simil, let me I think so there are three questions there, and I'll try to answer all three of them and and let me know if I missed something. So the first, starting with q two. Like Lauren indicated, we are very pleased with the business, here in q two. Not only did we deliver, a 5% comp, nine and a half percent two year stack, but we we delivered that on strong gross margin and much margin expansion.

So our margins expanded 33 basis points gross margins, and the merch margin expanded by 80 18 basis points. The drivers of that expanded merch margin continues to be consistent with what we have been talking about about the quality of our assortment, the favorable mix that we continue to see from the core, categories that are performing exceedingly well, as well as some of the early benefits that we have started to see from game changer and text media network. And as we look to the back half, those three drivers will continue to remain to be the drivers of of our expanded gross margin outlook that we have shared on a year over year basis for the full year as well. In terms of, the leverage point, so we're not sharing the long term rubric here, but the way we have consistently said in the past, we believe that, you know, we can deliver, a kind of a leverage on the SG and A at a low single digits comp. And that will be balanced between the margin outlook that we share as well as the s g and a investment opportunity.

But what we have been saying is you can continue to look to us to drive consistently the strong top line and the strong bottom line momentum on top line and and and EPS basis. You'll continue to balance that between the opportunity that we see to create long term differentiating opportunities like game changer, DICK'S Media Network, some of the work that our technology team has been doing in personalization, RFID. These are the differentiating capabilities that we are investing in that are driving sustained top line results as well as strong profitability growth.

Okay. Thank you very much. Good luck. Your

next question comes from the line of Adrienne Yih with Barclays. Please go ahead.

Yes. Thank you. Good morning and I'll add my congratulations. Well done. Lauren, you're welcome. Lauren, so my question is sort of higher level kind of what we're seeing in the industry overall. At leisure apparel and even performance footwear, they generally, right, have been under some pressure year to date. Seemingly, the retail channel, the wholesale part of their business is doing better than maybe their own DTC. And then you have kind of your the deal with Foot Locker makes you a bigger present for Nike.

So it just feels like to me some of the balance of power may be shifting in your favor. And I'm wondering if you can discuss that from a broad long term perspective. And then, Navdeep, can you talk about how much of your comp came from current day price increases? What do you foresee for third and fourth quarter? And then you're working on spring orders.

So are brands raising prices, right, because there's this rolling impact of the tariffs in the spring season more intensively than fall? Thank you.

Okay, Adrienne. Thanks for the question. So starting with what we're seeing in the industry and overall, we are seeing, as I just mentioned, growth across all aspects of our business. So that's footwear and that's apparel and that's also team sports as well as well as golf. So we so we are we are finding growth in all of those.

And you're right. As we become Foot Locker becomes part of the Dick's family, we are an even more important brand to our wholesale partners. And that's part of this the thesis and the strategy is that we wanna be involved in that long term long term insight sharing, trend identification, product development. So we're very, very focused on that. I don't know what I would say the balance of power would shift.

I think what I would say is our strategic relationship is very, very strong. And as the consumer continues to vote with, you know, into the categories that we serve, be it be it all be it, you know, height the high heat footwear as well as the bats and all of the newness and the innovation that are coming down the pike. We feel terrific. We are rooted in sport. Our brand partners are rooted in sport, and we are yeah.

We're very optimistic about the future. Abjeev, I'll turn it to you.

Yeah. Adrian, in terms of just drivers of the business when you look at the comp, you know, almost 1% of our comp came from the increase in transaction, remaining came from the overall basket increase. As Lauren indicated, we are seeing really strong affinity towards the innovation as well as newness that is available in the products. And so that continues to be a big driver of the overall basket selling. And the work that our teams are doing in stores and helping sell and and much more comprehensive basket, and so that means more units per transaction.

That is also a a driver in addition to the product mix as well. So it's combination of all three of those things that we are seeing a continued improvement in our basket selling as well as continued increase in transactions. In terms of the outlook for March and April, we typically don't break that out between at that level of detail, so we, I won't do that right now. And then as far as the outlook for the spring season, we will share that, in the due course of time. As you can imagine, we are working very closely with the national brand partners and our own vertical brands to come up with a plan for 2026.

Your next question comes from the line of Robbie Ohmes with Bank of America. Please go ahead.

Hey, good morning guys. Great quarter. I was wondering if, Lauren, we could get a little more color on the what you're seeing from your customer. You gave us a lot already, but I think you're seeing it sounds like more shifting to online versus in stores. Could you tell us how back to school went for you guys and how you think you did there versus last year?

And are you seeing your customer gravitating more towards promotions or things like that?

Thanks, Robbie. Thanks for the question. We are seeing strength with our consumer across the board. Our our consumer is responding to our assortment. They're responding to the athlete experience.

And there's we're seeing growth. We we've been saying that we are outperforming in ecommerce, but we're seeing incredibly strong growth in all of our channels. So it's not a shift as much as it is just overall consumer demand. We feel terrific about back to school. A lot of those sales are in q three, and so we will be reporting on back to school when we come back to you in a few months.

But between the amazing footwear that we have, the apparel, the backpacks, lunch boxes, we have a terrific, terrific assortment. And, you know, promotional activity hasn't been an enormous factor for us. We are navigating as we always do. We're surgical. And the differentiated assortment that we have enables us to really lean into newness and innovation rather than a deep promotional cycle.

So I I just would point to I think our consumer across the board is doing so well, and you see that in the fact that we don't we're not seeing trade down from best to better or better to good. We're seeing growth across all income demographics. We have products for absolutely every consumer, and and that's taking us into the back half.

Your next question comes from the line of Michael Lasser with UBS. Please go ahead.

Good morning. Thank you so much for taking my question. Getting feedback and stock price is under pressure. That is probably related to some of the commentary around the gross margin where previously there was an explicit expectation that it was going be up 75 basis points for the year and now the expectation is simply that it's going to be up. So A, what is the most realistic expectation you anticipate now for your gross margin?

And b, why would it be less than up 75 basis points like it was before? Thank you so much.

Yes, Michael, thanks for that question. I think the first part of your question broke up, but I think so your question is around the gross margin and the outlook that we have for the full year. So we still expect the gross margin to expand on a full year basis, and and and that has been shared as part of the updated outlook. You can imagine, we are balancing several puts and takes as we navigate the the landscape that we have in front of us between tariffs, our our consistent focus on keeping our inventory really vibrant because that inventory and the assortment is what is driving this consistent top line momentum that we have been delivering six straight quarters of over 4% comp. And you can all also imagine, the pricing and the promotion landscapes always remains very dynamic.

So we're trying to balance all of those, different drivers as we look to the back half and balance that against our SG and A expectations from an investment perspective. Because what we have also reiterated is that at the high end of the guidance, we still expect our operating margins to expand by 10 basis points, which is very consistent with what we had been talking as we thought about the full year. So really excited about the overall outlook we have shared, expanded top line expectation, expanded bottom line expectation, and still continue to expect gross margin expansion driven by the new drivers like Game changer, DMN, but predominantly driven by the differentiated product assortment and balancing that against the, SG and A investment opportunity we see.

Thank you for that. My follow-up question is given the performance of your stock price, it's likely that you'll have to issue more shares now for the Foot Locker deal than what was maybe previously anticipated. So how does that impact the potential flow through that you're going to get from the deal in the first year after you acquire it? And would you still expect it to be accretive given those additional shares you may have to deliver?

Yeah. Michael, great question. As as you know that the shareholder election is on the twenty ninth. So based on the consideration mix between the stock and and cash, you know, that will determine the level of accretion. And all of that, we are working through right now.

Once we are on the other side of September 8, we'll be having our own detailed evaluation of the opportunities that we that we see with the core business. We talked again about the synergies and the confidence we have of hundred to hundred and twenty five million dollars of synergies and balancing that against the consideration mix. So much more good question. Much more to come as as we share the outlook as part of the the q three call.

Okay. Thank you very much and best of luck.

Your next question comes from the line of Mike Baker with D. A. Davidson. Please go ahead.

Great. Thanks. I wanted to ask about Game changer. Sometimes you get some statistics in terms of users and the like. Any update on any of those Game changer type numbers?

Yeah. Thanks, Mike. Great question. Game changer continues to do incredibly well, highly profitable, fast growing software as a subscription business. And in q two, that continued.

So we we have solved 7,400,000 unique active users in q two, and on average, 5.5 monthly active users were in the app. That's up 16% year over year. We're still on track for the growth numbers that we hit over 100,000,000 last year, and we're on track for almost a 50% revenue growth on that. And so everything is going great with game changer. I would say one of the more exciting things that's happening also is that the DICK'S and the game changer businesses are working closer than ever on things like what we're calling a a live experience called BatLab where we're rating with bringing in top top athletes and rating all of the new equipment for the year.

Game changer and DICK'S were working on sharing data so that we can be more personalized. And game changer is a huge piece of our DICK'S media network where we have actually live sports where we can tap into people who are fully engaged in the moment while they're watching their kids, their grandkids play sports in a highly personalized way. So Game changer is doing fantastic.

Yeah. Mike, I'll just build on what Lauren said. I think so we wanna give a shout out to the Game changer team as they have been driving some of the most sustained and differentiated results in overall youth sports industry. And and in q one, hopefully, you all got a chance to see the first time that we actually did a brand advertising for game changer because we feel the brand awareness is another another unique opportunity that we see with the Game changer business. Couldn't be more excited about the results the team is driving and how sustained and differentiated those results are.

Yes, sounds great. One more follow-up and you'll probably pump this to the third quarter. But just on Foot Locker, the more you've gotten to know them and see them and visit them, etcetera, any change to those synergy numbers? I believe in the past, it didn't really include any revenue synergies, but you're talking about ways to improve the assortment, etcetera. And as part of the deal being improved, I didn't see anything on divestitures. Are there going to be any required divestitures?

No. Too soon for us to comment on all of that. We are not changing the synergy numbers. We had said 100,000,000 to $125,000,000 in synergies, and that is we're still very much going after that. We will be diving in once we get past the transaction on September 8 and be back to you in Q3. So you are right.

Your next question comes from the line of Chris Horvers with JPMorgan. Please go ahead.

Thanks and good morning. I wanted to follow-up on the share count question. In original release, you did talk about they expected that the deal would be accretive on an earnings basis, I believe in the first full year post acquisition. Is the answer that because I think it's about 11,000,000 shares, obviously, Locker stock's price moving here. But to the extent that you get a full share conversion, would you expect it to be still be accretive on an earnings basis?

Or is that more of like it will be accretive but on an operating profit dollar basis?

Yeah. Chris, all are great questions. As you can imagine, there are multiple moving pieces when you are trying to understand the accretion dilution. Share count just happens to be one of them. Like Lauren indicated, synergy expectation, the timing of synergy would be another driver.

The core business performance would be another driver. So there is definitely more work to be done. But what we continue to remain confident is that this would be accretive, but level of accretion will be depending based on the consideration mix. But that is the work that is ahead of us. Once we are past September 8, we'll be working very closely as a collective company to refine those expectations and share a deeper outlook as part of our q three and q four call.

Got it. Makes sense. And then, as you as you think about the momentum that you've seen in the business, the excitement around the newness, what seems to be a pretty good back to school season, The implied comps in the back half are I understand you mentioned you raised them, but it does signal a sharp deceleration. So is that just more caution around what might happen with the consumer sort of in between events given the uncertainty with tariffs?

Thanks, Chris. Yeah. We are balancing the incredible momentum that we have in the business with just some appropriate caution about the uncertain macroeconomic environment. We've now included tariffs and everything we know about tariffs in. And keep in mind, we're also lapping second half comps that are that are aggressive, 50 basis points stronger than the first half.

So we are really confident. We never guide to the highest possible outcome, but we have momentum and are just appropriately cautious as we guide.

Yeah. So, Chris, just as a reminder, what Lauren is alluding to is the fact that we'd actually delivered a 6.4% comp in q four. So that has also been contemplated as we gave the the second half outlook. But unlike you rightly pointed out, we raised our second half outlook versus our prior guidance based on the strength of the core strategies, strength of the assortment that we have, as well as how well our teams are executing.

Dick's Sporting Goods (DKS) Q2 2026 Earnings Call Transcript

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