Foot Locker posts $38 mn Q2 loss, $8.6 bn Dick’s merger on track

Foot Locker has reported a second quarter loss as weaker sales and regional declines weighed on performance, while its pending merger with Dick Sporting Goods moved closer to completion. For the quarter ended August 2, 2025, total sales slipped 2.4 per cent to $1.85 billion from $1.896 billion a year earlier, or down 3.7 per cent excluding currency effects.

Comparable sales fell 2 per cent, though North America posted a 1.4 per cent gain, excluding WSS up 2.6 per cent, and Champs Sports delivered a fourth consecutive quarter of positive comparable growth at 2 per cent. These gains were offset by a 10.3 per cent decline in Europe and Asia Pacific.

Gross margin contracted by 50 basis points due to weaker merchandise margins, while occupancy costs remained flat. Selling, general and administrative expenses declined 1.7 per cent in dollar terms thanks to cost discipline but rose 20 basis points as a share of sales because of deleverage, the company said in a release.

The company reported a net loss of $38 million, compared with $12 million in the prior year, and a non-GAAP net loss of $27 million versus $4 million a year earlier. Loss per share widened to $0.39 from $0.13, while non-GAAP loss per share stood at $0.27 compared with $0.05 last year.

Despite posting a pre-tax loss, Foot Locker booked $8 million in income tax expense, driven by taxable income in certain jurisdictions and the absence of a tax benefit on Dutch losses following a first quarter decision to fully value deferred tax assets.

“In the second quarter, we built sequential momentum and delivered positive North American comparable sales results led by our Foot Locker, Kids Foot Locker, and Champs Sports banners, including a positive start to the Back-to-School season in July. At the same time, our results reflect a challenging operating environment and soft store traffic trends, particularly in our WSS and international businesses. Our team continued to execute our Lace Up Plan, remaining focused on elevating our customers’ experiences by leveraging our strong brand partnerships, enhancing our store base through our Refresh and Reimagined programs, improving our digital platforms, and deepening global engagement through our FLX Rewards Program,” Mary Dillon, chief executive officer said.

The retailer continued to streamline its operations, opening two new stores and closing 11, while completing 14 remodels or relocations and refreshing 52 stores to its updated design standards. At quarter end, the company operated 2,354 stores across 20 countries, with an additional 243 licensed outlets in the Middle East, Europe and Asia.

Shareholders on August 22 approved the company’s $8.6 billion acquisition by Dick’s Sporting Goods, with all regulatory approvals now secured. The transaction is scheduled to close on September 8, 2025. In view of the pending merger, Foot Locker will not host quarterly earnings call or provide financial guidance.

“We are pleased to have recently received shareholder approval for the company’s acquisition by Dick’s Sporting Goods. All required regulatory approvals have been received, and we look forward to the successful completion of the transaction,” Dillon added.

Foot Locker posted a Q2 net loss of $38 million as sales fell 2.4 per cent to $1.85 billion, with comparable sales down 2 per cent.
North America rose 1.4 per cent but Europe and Asia Pacific dropped 10.3 per cent.
Gross margin slipped 50 bps and SG&A deleveraged.
The retailer closed 11 stores, ending with 2,354.
Shareholders approved its $8.6 billion sale to Dick’s, set to close September 8.

Fibre2Fashion News Desk (HU)

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