DICK'S SPORTING GOODS, INC.

DICK'S SPORTING GOODS, INC. is a leading global sports retailer offering an extensive assortment of authentic, high-quality sports equipment, apparel, footwear and accessories. The Company operates in the highly fragmented, intensely competitive and continually evolving sporting goods and athletic footwear and apparel retail industry. The Company's banners include DICK'S Sporting Goods, Golf Galaxy, Public Lands and Going Going Gone! stores in addition to the experiential retail concepts DICK'S House of Sport and Golf Galaxy Performance Center which are all located across the United States. Additionally, as owner and operator of Foot Locker, which includes Foot Locker, Kids Foot Locker, Champs Sports, WSS and atmos banners, the Company serves the global sneaker community across North America, Europe, Asia and Australia, plus a licensed store presence in Europe, the Middle East and Asia. The Company also owns and operates GameChanger, a youth sports mobile platform for live streaming, scheduling, communications and scorekeeping.

The Company competes within many retail formats, including large format sporting goods stores, traditional sporting goods stores, specialty stores, mass merchants and department stores, online retailers, and vendors selling directly to consumers through retail stores and online. The Company differentiates itself by offering a wide range of products that enable it to address the needs of all athletes, from beginner to enthusiast, and by utilizing distinctive merchandise presentation in stores to create a unique shopping environment. The Company believes its store base gives it a competitive advantage over online-only competitors, as its physical presence allows it to better serve customers by creating strong engagement. The Company also offers superior service both in-store and via a seamless omni-channel experience which includes buy-online, pick-up in store, curbside pickup and return, and for the DICK'S Business, also offering same-day delivery capabilities with Instacart or DoorDash. The Company's vertical brands are the second largest vendor, representing $1.8 billion ¹, or approximately 13% ², of net sales in fiscal 2025. Nike, the Company's largest vendor, represented approximately 31% ³ of consolidated merchandise purchases within the DICK'S and Foot Locker Businesses.

The Company generates revenue through the sale of sports equipment, apparel, footwear and accessories via its retail stores and online channels. The Company's business model is omni-channel, integrating its stores and online channels to provide a seamless shopping experience. The Company's revenue is primarily transactional, derived from merchandise sales. The Company also generates non-merchandise sales categories, including in-store services, shipping, GameChanger, retail media network and licensing revenues. The Company's primary customer segments are athletes and sneaker enthusiasts. The Company has an expansive dataset of approximately 30 million ⁴ athletes who participate as members of its ScoreCard Rewards loyalty program, which accounts for over 75% ⁵ of total sales for the DICK'S Business. Approximately 8 million ⁶ of the athletes in the loyalty program are part of the ScoreCard Gold tier, which accounts for over 50% ⁷ of total sales for the DICK'S Business.

The Company's sales categories include Footwear, Hardlines, Apparel, and Other. For fiscal 2025, Footwear represented 40% ⁸ of consolidated sales, Hardlines represented 29% ⁹, Apparel represented 28% ¹⁰, and Other represented 3% ¹¹. For fiscal 2024, Footwear represented 28% ¹² of consolidated sales, Hardlines represented 36% ¹³, Apparel represented 33% ¹⁴, and Other represented 3% ¹⁵. For fiscal 2023, Footwear represented 26% ¹⁶ of consolidated sales, Hardlines represented 38% ¹⁷, Apparel represented 33% ¹⁸, and Other represented 3% ¹⁹. The fiscal 2025 figures include $3.1 billion ²⁰ of net sales for the Foot Locker Business since the acquisition date. The Company's vertical brands include brands owned across hardlines and softlines such as Alpine Design, CALIA, DSG, ETHOS, Fitness Gear, MAXFLI, Nishiki, Quest, Tommy Armour, Top-Flite, VRST and Walter Hagen, as well as brands licensed from third parties including adidas (football), Cobra (golf), Marucci (baseball) and Lotto (soccer and pickleball). GameChanger generated nearly $150 million ²¹ in revenue during fiscal 2025 and had approximately 10 million ²² unique active users on the app.

On September 8, 2025 ²³, the Company completed the acquisition of Foot Locker, a leading footwear and apparel retailer, for total purchase consideration of $2.5 billion ²⁴, pursuant to a definitive merger agreement dated May 15, 2025 ²⁵. The acquisition consideration primarily consisted of $2.1 billion ²⁶ in share consideration for the issuance of 9.6 million ²⁷ shares of the Company's common stock, $223.0 million ²⁸ in cash consideration and $111.6 million ²⁹ from the Company's pre-existing equity ownership in Foot Locker. The Company expects the acquisition to deliver between $100 million to $125 million ³⁰ in cost synergies in the medium-term. The Company expects pre-tax charges of $500 million to $750 million ³¹ related to inventory optimization, store portfolio evaluation, and other merger and integration costs, of which $390 million ³² was incurred in fiscal 2025. In fiscal 2025, the Company repurchased 1.6 million ³³ shares of common stock under its share repurchase program for a total cost of $342.1 million ³⁴. The Company declared and paid aggregate cash dividends on a quarterly basis for a total amount of $4.85 ³⁵ per share on its common stock and Class B common stock. On March 10, 2025 ³⁶, the Board of Directors authorized an additional five-year share repurchase program of up to $3.0 billion ³⁷ of the Company's common stock.

Net sales increased 28.1% ³⁸ to $17.22 billion ³⁹ during fiscal 2025 from $13.44 billion ⁴⁰ during fiscal 2024, which includes $3.1 billion ⁴¹ of net sales for the Foot Locker Business and a 4.5% ⁴² increase in comparable sales for the DICK'S Business. Net income was $849.2 million ⁴³, or $9.97 ⁴⁴ per diluted share, compared to $1.17 billion ⁴⁵, or $14.05 ⁴⁶ per diluted share, during fiscal 2024. Earnings per diluted share in the current year includes a $60.0 million ⁴⁷ net loss from the Foot Locker Business and the dilutive effect of 9.6 million ⁴⁸ shares of the Company's common stock issued in connection with the Foot Locker acquisition, which together decreased earnings per diluted share by $1.38 ⁴⁹. Net income also includes $307.3 million ⁵⁰, net of tax, or $3.61 ⁵¹ per diluted share, of acquisition-related costs. Operating income decreased to $1,095.9 million ⁵² in 2025 from $1,473.9 million ⁵³ in 2024. Gross profit increased to $5,667.3 million ⁵⁴ in 2025 from $4,825.7 million ⁵⁵ in 2024, but decreased as a percentage of net sales by 298 basis points ⁵⁶.

For fiscal 2026, the Company expects total net sales of $22.1 billion to $22.4 billion ⁵⁷ and earnings per diluted share in the range of $13.70 to $14.70 ⁵⁸, which includes approximately $150 million ⁵⁹ of Foot Locker acquisition-related costs anticipated in 2026, offset by income related to litigation and other settlements expected in the first quarter of fiscal 2026. For the DICK'S Business, the Company expects comparable sales growth for the year to be in the range of 2% to 4% ⁶⁰ and segment profit to be in the range of $1.58 billion to $1.66 billion ⁶¹, or 11.0% to 11.2% ⁶² as a percentage of net sales. For the Foot Locker Business, the Company expects pro forma comparable sales growth to be in the range of 1% to 3% ⁶³ and segment profit to be in the range of $100 to $150 million ⁶⁴.

The Company plans to continue to reposition its store portfolio through DICK'S House of Sport, DICK'S Field House and Golf Galaxy Performance Center. The Company opened 16 ⁶⁵ new DICK'S House of Sport locations during 2025, with 35 ⁶⁶ locations at the end of the year and plans to open approximately 14 ⁶⁷ locations in 2026. In addition, the Company plans to begin construction on approximately 18 ⁶⁸ DICK'S House of Sport locations that are expected to open in 2027. The Company opened 15 ⁶⁹ new DICK'S Field House store locations in 2025, ending the year with a total of 42 ⁷⁰ locations and plans to open approximately 22 ⁷¹ locations in 2026. The Company has opened 33 ⁷² Golf Galaxy Performance Centers to date, and plans to open approximately 15 ⁷³ in 2026. The Company expects the back-to-school season in 2026 to represent an operational inflection point for the Foot Locker Business as new assortments, improved processes and strategic initiatives are implemented. The Company also expects continued strong revenue growth for GameChanger in 2026 following a significant upgrade launched in February 2026.

For the DICK'S Business, gross profit increased 44 basis points ⁷⁴ as a percentage of net sales in fiscal 2025, driven primarily by the quality of the assortment. For fiscal 2026, the Company expects segment profit as a percentage of net sales for the DICK'S Business to decline in the first half of 2026, but expand in the second half of 2026 due to the timing of planned investments and synergy savings. The Company expects the acquisition of Foot Locker to deliver between $100 million to $125 million ⁷⁵ in cost synergies in the medium-term, to be primarily achieved through procurement and direct sourcing efficiencies.

The Company currently has 13 ⁷⁶ distribution centers including five regional distribution centers for the DICK'S Business and eight for the Foot Locker Business. In 2024, the Company began construction on a new regional distribution center in Texas that it plans to open in 2026 for the DICK'S Business. In September 2025, Foot Locker opened a new leased distribution center in Haps, Netherlands, to support the Foot Locker European business. The Company plans to invest in the Foot Locker Business as it looks to rapidly expand the Fast Break store initiative in 2026, with the goal to have approximately 250 ⁷⁷ locations ahead of the back-to-school season. The Company's fiscal 2026 capital expenditures plan also includes ongoing investments in its supply chain and technology, including the construction of a new regional distribution center in Fort Worth, Texas, which is expected to open in 2026, and investments in technology to enhance store fulfillment, in-store pickup and other foundational capabilities.

The Company anticipates fiscal 2026 capital expenditures of approximately $1.5 billion ⁷⁸, net of construction allowances provided by landlords. In fiscal 2025, capital expenditures totaled $1,137.2 million ⁷⁹ on a gross basis and $975.5 million ⁸⁰ on a net basis. On March 10, 2025 ⁸¹, the Board of Directors authorized an additional five-year share repurchase program of up to $3.0 billion ⁸² of the Company's common stock. On March 11, 2026 ⁸³, the Board of Directors declared a 3% ⁸⁴ increase in the quarterly cash dividend compared to the previous quarterly per share amount, resulting in a dividend of $1.25 ⁸⁵ per share of common stock and Class B common stock.

The macroeconomic environment remains dynamic as a result of numerous factors, including ongoing elevated interest rates, inflationary pressures, changes to international trade policies from taxation and tariffs, and geopolitical conflicts, tensions and events, all of which could impact pricing, consumer discretionary spending behavior and the promotional landscape. The Company's business depends on consumer discretionary spending and is sensitive to changes in global macroeconomic conditions outside of its control, including inflation, prolonged inflationary pressures and measures taken to curb inflation; elevated interest rates and recessionary pressures; changes in consumer disposable income, consumer confidence and debt burdens; perceptions of global economic stability; and wage and unemployment levels. Geopolitical developments, including ongoing conflicts and tensions in the Middle East, Ukraine and Venezuela, and the threat or outbreak of additional conflicts, war, terrorism, or public unrest may create economic instability, disrupt supply chains, increase fuel and transportation costs, or elevate cybersecurity risks.

The Company's business depends on consumer discretionary spending and is sensitive to changes in global macroeconomic conditions, including inflation, elevated interest rates, and recessionary pressures, which can cause consumers to reduce or postpone discretionary purchases. The Company faces intense competition in the sporting goods and retail industries from large format sporting goods stores, specialty stores, mass merchants, department stores, online retailers, and vendors selling directly to consumers. The Company is dependent on key suppliers, with Nike, its largest vendor, representing approximately 31% ⁸⁶ of consolidated merchandise purchases in fiscal 2025, and any adverse development in a key supplier's brand power, financial condition, or product innovation could materially adversely affect the business. The Company may not realize the anticipated benefits of the Foot Locker transaction, and integration challenges could adversely affect the business; the Company expects pre-tax charges of $500 million to $750 million ⁸⁷ related to the acquisition, of which $390 million ⁸⁸ was incurred in fiscal 2025. The Company's substantial international operations expose it to risks including changes in import duties, tariffs, and other trade restrictions, as well as foreign currency exchange rate fluctuations, particularly with the euro, British pound, Canadian dollar, Australian dollar and the Japanese yen.

Management's message emphasizes that the Company has built an industry-leading business by focusing on product, performance, innovation and customer loyalty, with a long-term view on the business. Management states that it is applying the same playbook to the Foot Locker Business and making choices that it believes will create the most long-term value for shareholders. Management expects the back-to-school season in 2026 to represent an operational inflection point as new assortments, improved processes and strategic initiatives are implemented. Management provided specific guidance for fiscal 2026, including total net sales of $22.1 billion to $22.4 billion ⁸⁹ and earnings per diluted share in the range of $13.70 to $14.70 ⁹⁰. For the DICK'S Business, management expects comparable sales growth for the year to be in the range of 2% to 4% ⁹¹ and segment profit to be in the range of $1.58 billion to $1.66 billion ⁹², or 11.0% to 11.2% ⁹³ as a percentage of net sales. For the Foot Locker Business, management expects pro forma comparable sales growth to be in the range of 1% to 3% ⁹⁴ and segment profit to be in the range of $100 to $150 million ⁹⁵. Management's strategic priorities include repositioning the store portfolio through DICK'S House of Sport, DICK'S Field House and Golf Galaxy Performance Center, driving continued growth across key categories, and accelerating the eCommerce channel.