Foot Locker is slowly getting back to growth, but the costly turnaround of the legacy sneaker store is still weighing on its parent company Dick’s Sporting Goods‘ bottom line, as the company posted an earnings miss on Wednesday. 

In the three months ended May 2, Dick’s incurred $96.5 million in charges related to the acquisition. That includes $53.8 million for merger and acquisition costs like severance and store closings, and $42.7 million to clear through sale inventory.

Those expenses contributed to a miss on Dick’s bottom line, as top line results exceeded expectations. 

Meanwhile, Foot Locker eked out comparable sales growth of 0.6%, the first time the metric rose since the end of fiscal 2024, while Dick’s namesake stores saw comparable sales climb 6%, leading to a combined figure of 4.1% growth. At Foot Locker U.S., where Dick’s has focused much of its turnaround attention, comparable sales grew 6.4%. 

Here’s how the sporting goods store did in its first fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: $2.90 adjusted vs. $2.92 expected
• Revenue: $5.17 billion vs. $5.09 billion expected

The company’s shares fell nearly 5% in premarket trading.

During the quarter, Dick’s saw net income of $319.82 million, or $3.54 per share, compared with $264.29 million, or $3.24 per share, a year earlier. Adjusting for items like acquisition costs and litigation, Dick’s earned $2.90 per share. 

Sales rose to $5.17 billion, up about 63% from $3.17 billion a year earlier, as it added Foot Locker to its business. 

At a time when sports are at the center of culture, Dick’s is having little issue attracting customers. But maintaining profitability expectations has proven more challenging. 

Following its first-quarter results, Dick’s tightened its 2026 guidance for comparable sales growth for both Dick’s and Foot Locker. It now expects the Dick’s business to grow between 2.5% and 4%, up from 2% to 4%, and it anticipates Foot Locker will rise between 1.5% and 3%, up from 1% to 3% previously. 

Meanwhile, Dick’s lowered its guidance for 2026 consolidated operating income and earnings. It now expects consolidated operating income to range between $1.69 billion and $1.81 billion, down from a previous range of $1.71 billion to $1.83 billion.

It’s now expecting 2026 earnings per share to range between $13.27 and $14.27, down from $13.70 to $14.70. It continues to expect adjusted earnings per share to range between $13.50 and $14.50, exceeding expectations at the high end of $14.32 per share, according to LSEG. 

It’s expecting net sales to be between $22.1 billion and $22.4 billion, roughly in line with expectations at $22.4 billion, according to LSEG. 

The company also raised its adjusted operating income guidance to a range of $1.71 billion to $1.83 billion, up from $1.68 billion to $1.81 billion previously. 

Since acquiring Foot Locker, Dick’s has sought to take advantage of its sprawling store footprint and unique customer demographic while also doing the hard work of closing underperforming stores, reworking the assortment and changing store formats. 

It previously started a pilot program of 11 stores called “Fast Break” that tests changes in products and how they’re showing up in stores, where Foot Locker sees the majority of its revenue. The pilot has been expanded to around 100 stores globally and those shops are seeing double-digit comparable sales growth and considerable improvements in merchandise margin. 

By the time the back-to-school season begins, the pilot will expand to 250 stores, with further additions planned ahead of the holiday shopping season. 

By the end of the quarter, Foot Locker’s total business, including Champs, WSS and Kids Foot Locker, had 2,483 stores globally.