Company diagnostic
Specialty retail
DKS
DICK'S Sporting Goods
Foot Locker added $3.1B of revenue; inventory at 155 days and SG&A at 25.2% of revenue are the largest observed gaps.
Why now
In the news
On August 25, 2026, DICK'S lowered its full-year 2026 outlook after second-quarter comparable sales at the newly acquired Foot Locker business fell 3.6%, while the core DICK'S business grew comparable sales 4.9%, per the company's results release.
Business health score
54
Out of 100
Addressable estimate
$454.9M addressable estimate (observed gap $785.4M)
Revenue
$17,215M (FY2025)
Operating margin
6.4%
As reported
Filing
Form 10-K, fiscal year ended January 31, 2026 (fiscal 2025)
Run
September 16, 2026
Processing
7
minutes
Output
41
-page PDF and Excel model
Data quality
90
Point-in-time analysis from the filing and run date shown. The news context reflects reporting available on that date, and this page is not updated as events move on.
Score by dimension
Financial health
65
Growth potential
49
Strategic readiness
47
Market position
75
Innovation and digital
31
Operational efficiency
49
First 100-day action
Conduct a comprehensive inventory audit across DICK'S and Foot Locker to identify excess SKUs, slow-moving items and markdown opportunities, and establish baseline DIO and inventory turnover metrics by location and category.
How it compares
- Gross margin: 32.9% vs peer median 30% (Better than median)
- Operating margin: 6.4% vs peer median 8% (Behind median)
- Net margin: 4.9% vs peer median 5% (Behind median)
- SG&A, % of revenue: 25.2% vs peer median 22% (Behind median)
- Inventory days: 155 days vs peer median 100 days (Well behind median)
- Inventory turns: 2.35x vs peer median 4.5x (Well behind median)
Top three levers
Lever 1
Inventory optimization and working capital release
Why this lever
Days inventory of 155 against a 100-day median ties up an estimated $2,345M. Part of the excess is Foot Locker's legacy stock consolidated at year end, so the release is partly an integration task.
Size
$234.5M a year
Carrying benefit on a one-time $2,345M cash release
Lever 2
SG&A rationalization and corporate overhead consolidation
Why this lever
SG&A runs at 25.2% of revenue against a 22% median. The report treats 40% of the gap as addressable and labels it an estimate, because the peer set is consumer durables rather than sporting-goods retail.
Size
$220.4M
Observed gap $550.9M
Lever 3
Foot Locker turnaround and store portfolio optimization
Why this lever
Foot Locker's second-quarter comparable sales fell 3.6% while the core business grew 4.9%. The report treats the turnaround and store portfolio as a directional lever without sizing it.
Size
Directional
Not sized in the report
Questions for management
- What is the store-level profitability hurdle for Foot Locker Fast Break conversions, and at what comparable-sales rate does a conversion pay back?
- How much of the $390.0M in FY2025 exceptional charges ($217.9M inventory write-downs, $164.2M integration costs) is expected to recur in FY2026?
- What is the Nike allocation trend for FY2026, and what is the plan to reduce the 31% dependency on Nike?
Summary
DICK'S Sporting Goods reported fiscal 2025 revenue of $17,215M, up 28.1%, with $3.1B of that from Foot Locker, acquired in September 2025. The core business grew comparable sales 4.5%. Reported operating margin of 6.4% and net margin of 4.9% sit below the durables medians of 8% and 5%, after $390M of exceptional charges tied to the acquisition, of which $217.9M were inventory write-downs.
Inventory is the largest observed gap. Days inventory outstanding of 155 against a 100-day median and turns of 2.35x against 4.5x imply $2,345M of excess stock; releasing it would be a one-time cash event, and the report sizes the annual carrying benefit at $234.5M. Part of the excess is Foot Locker's legacy position consolidated at year end, which the income statement does not yet reflect in full.
SG&A at 25.2% of revenue against a 22% median is a 3.2-point gap worth $550.9M; the report treats $220.4M as addressable and labels it an estimate, since the peer set is consumer durables rather than sporting-goods retail. The first 100-day move is a full inventory audit across 3,195 locations with a daily ageing dashboard. The questions for management centre on Fast Break conversion economics, which of the FY2025 charges recur, and the concentration of purchasing in Nike at 31% of sales.
What this report does not cover
The year-end balance sheet consolidates all of Foot Locker while the income statement carries about five months of it, so inventory days and asset turnover are overstated for the combined business. The peer set is consumer durables manufacturers, not sporting-goods retailers, so the SG&A comparison is indicative. The August 2026 guidance reduction is post-period and appears from market intelligence only.
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