TLDR
- Dick’s Sporting Goods has agreed to buy Foot Locker for approximately $2.4 billion ($24 per share)
- The deal represents a nearly 90% premium to Foot Locker’s Wednesday closing price
- Foot Locker stock surged over 80% in premarket trading while Dick’s stock fell about 11%
- The acquisition will give Dick’s major international presence and increased leverage with brands like Nike and Adidas
- The deal is expected to close in the second half of 2025
Foot Locker (FL) stock skyrocketed early Thursday following news that Dick’s Sporting Goods (DKS) has agreed to acquire the shoe retailer for approximately $2.4 billion. The buyout price of $24 per share represents a premium of nearly 90% compared to Foot Locker’s stock price at Wednesday’s closing bell.
News of the deal sent Foot Locker shares surging over 80% in premarket trading. Dick’s stock, meanwhile, dropped around 11%. This kind of reaction is typical when a company makes a major acquisition, as investors weigh integration risks.
The Wall Street Journal first reported the potential deal late Wednesday, with Dick’s officially confirming the agreement Thursday morning.
This acquisition will reshape the athletic retail landscape. The combined company will have much greater scale and reach in the competitive sports retail market.
Foot Locker operates about 2,400 stores across 20 countries through its various brands including Foot Locker, Kids Foot Locker, Champs Sports, WSS, and Atmos.
Creating a Retail Powerhouse
The buyout will give Dick’s Sporting Goods a major boost to its international presence. It will also increase Dick’s leverage with major athletic brands like Nike and Adidas.
“We have long admired the cultural significance and brand equity that Foot Locker and its dedicated Stripers have built within the communities they serve,” said Ed Stack, Executive Chairman of Dick’s.
Stack added that the company sees “meaningful opportunity for growth ahead” and “a clear path to further unlocking growth and enhancing Foot Locker’s position in the industry.”
The deal is expected to close in the second half of 2025, subject to standard regulatory approvals.
Recent Performance
The acquisition comes at a challenging time for Foot Locker. The retailer has been working to improve its operations after losing market share in recent years.
According to Neil Saunders, managing director of GlobalData, Foot Locker’s market share has fallen by 1.8 percentage points since 2019.
“While Foot Locker has made some strides in improving its stores and operations, its market share has fallen and the comeback is not yet fully in play,” Saunders noted.
However, Saunders suggested this might work to Dick’s advantage, as it could “engineer a recovery with its extensive retail skills and add value over the price it has offered.”
In its most recent financial results from March, Foot Locker reported fourth-quarter 2024 sales of $2.24 billion, down 5.8% from the same period in 2023.
For the full fiscal year 2024, Foot Locker reported total revenue of $7.99 billion, a decrease from $8.17 billion in fiscal 2023.
The company did show improvement in its bottom line, with net income from continuing operations of $18 million in 2024, up from a $330 million loss in the previous year.
Foot Locker has been implementing its “Lace Up Plan,” a strategic initiative launched in 2023 to enhance the retail experience and improve productivity.
This acquisition follows another major deal in the footwear industry – Skechers’ recent $9 billion agreement to go private with Brazilian private equity firm 3G Capital, considered the biggest shoe buyout in history.
The Dick’s-Foot Locker deal is expected to create a stronger competitor in the sports retail space as both companies look to adapt to changing consumer shopping habits and brand strategies.
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