Strategic Win or Loss? Analysts React to Dick’s Acquisition of Rival Foot Locker for £1.81 Billion

In a move set to shake up the future of the athletic retail sector, Dick’s Sporting Goods has announced plans to acquire rival Foot Locker for approximately £1.81 billion ($2.4 billion). While the acquisition is aimed at accelerating Dick’s international expansion, analysts are already questioning whether this bold play could backfire due to Foot Locker’s waning global relevance.

Strategic Buyout or Expensive Gamble?

Under the terms of the agreement, Foot Locker shareholders will receive £18.10 ($24) per share in cash or 0.1168 shares of Dick’s stock, representing a premium of roughly 90% over Foot Locker’s prior closing price.

With this acquisition, Dick’s gains access to Foot Locker’s vast international network of around 2,400 stores across 20 countries, including well-known retail names such as Kids Foot Locker, Champs Sports, WSS, and Atmos.

The companies anticipate generating between £75 million ($100 million) and £94 million ($125 million) in synergies. They also aim to strengthen omnichannel capabilities and broaden their customer reach.

Investor Caution as Shares Dip

Despite the initial optimism, the market reaction was mixed. Foot Locker’s shares jumped 85%, while Dick’s stock fell by 14%—a sign of investor unease about absorbing a struggling brand.

Foot Locker, grappling with declining sales and an overdependence on Nike, will reportedly continue operating as a standalone business post-acquisition. Dick’s hopes to preserve the Foot Locker brand while steering it toward recovery under fresh leadership.

Analysts Raise Red Flags Over the Deal

Market experts have responded with scepticism. TD Cowen analyst John Kernan branded the acquisition a ‘strategic mistake’, citing the high cost and operational risks tied to reviving Foot Locker.

Kernan downgraded Dick’s from ‘Buy’ to ‘Hold’ and slashed the price target from £184.72 ($245) to £162.86 ($216), citing the challenges of integrating a faltering mall-based retailer overly reliant on a single vendor.

Analysts at UBS also voiced concern:

‘Retail integrations tend to be challenging. There’s a far longer list of retail mergers that were not successful than those that were.’

Financials Reveal a Tale of Two Retailers

Recent earnings reports highlight the contrasting performance of the two firms.

In Q1 2025, Dick’s Sporting Goods posted a 4.5% year-on-year increase in comparable sales. It also reported earnings per diluted share of $3.24 (GAAP) and $3.37 (non-GAAP), reinforcing its position in the sporting goods sector.

In stark contrast, Foot Locker reported a net loss of $363 million, a significant downturn from the $8 million net income reported during the same period in 2024. This loss was primarily due to slowing sales and vendor concentration risks.

The disparity in results underscores the potential hurdles Dick’s faces in attempting to integrate Foot Locker and execute a turnaround while pushing for global growth.

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