DICK'S Sporting Goods Reports 5.2% Increase in Net Sales for Q1 Fiscal 2025

DICK'S Sporting Goods, Inc. reported a 5.2% increase in net sales for the first quarter of fiscal 2025, reaching $3.17 billion compared to $3.02 billion in the same period last year. The growth was primarily driven by a 4.5% increase in comparable sales, which included a 3.7% rise in sales per transaction and a 0.8% increase in transaction volume. The company's gross profit also saw an increase, rising to $1.17 billion from $1.10 billion, with gross margin improving by 41 basis points. However, net income decreased to $264.3 million, or $3.24 per diluted share, down from $275.3 million, or $3.30 per diluted share, in the prior year, partly due to non-cash losses from an investment in Foot Locker equity securities.

In terms of operational changes, DICK'S Sporting Goods has been actively expanding its store portfolio. The company ended the quarter with 670 DICK'S Sporting Goods stores, down from 677 at the beginning of the fiscal year, following the closure of two stores and the relocation of five. The company also opened one new DICK'S Field House store, bringing the total to 31. The company plans to continue its expansion strategy, with expectations to open approximately 16 DICK'S House of Sport locations and 16 DICK'S Field House locations in 2025.

The company announced a definitive merger agreement to acquire Foot Locker for approximately $2.4 billion in equity value, which is expected to close in the second half of 2025, pending shareholder and regulatory approvals. This acquisition aims to enhance DICK'S market position by combining resources and expanding its reach in the sporting goods sector. The company plans to finance the transaction through a mix of cash, revolving borrowings, and new debt, and anticipates achieving cost synergies of $100 to $125 million in the medium term.

DICK'S Sporting Goods reported a decrease in cash and cash equivalents, ending the quarter with $1.04 billion, down from $1.69 billion at the beginning of the fiscal year. The company generated $178 million in cash from operating activities, a decline from $232 million in the prior year, primarily due to changes in incentive compensation and accrued expenses. Cash used in investing activities increased significantly to $386 million, driven by capital expenditures related to new store openings and investments in existing locations.

Looking ahead, DICK'S Sporting Goods has reaffirmed its full-year outlook for 2025, expecting comparable sales growth in the range of 1% to 3% and earnings per diluted share between $13.80 and $14.40. The company anticipates gross margin expansion due to the quality of its merchandise assortment, although it expects selling, general, and administrative expenses to increase as it invests in digital and in-store initiatives to support long-term growth.