DICK'S Sporting Goods(DKS -4.84%) reported second quarter 2025 earnings on July 24, 2025, posting 5% comparable sales (comp) growth and non-GAAP EPS of $4.38, and raising full-year comparable sales and EPS guidance. Notable strategic highlights include accelerated House of Sport and Fieldhouse openings, strong momentum in owned and e-commerce channels, and anticipation of the transformationalFoot Locker(NYSE:FL) acquisition closing September 8. The following key insights focus on the company's sustained competitive strengths, integration priorities, and digital initiatives shaping its long-term investment thesis.
DKS expands margin despite SG&A deleverage
Gross profit reached $1.35 billion, or 37.06% of net sales, expanding 33 basis points year-over-year (YoY), while non-GAAP selling, general, and administrative expenses (SG&A) rose 9.9% to $864 million and deleveraged by 105 basis points. This SG&A deleverage resulted from planned investments into digital infrastructure, store format innovation, and marketing required for long-term growth, as discussed on a non-GAAP basis.
"On a non-GAAP basis, SG&A expenses increased 9.9% to $864 million and deleveraged 105 basis points compared to last year's non-GAAP results. As we discussed previously, this year-over-year deleverage was expected and driven by strategic investments digitally, in-store, and in marketing to better position ourselves over the long term."
-- Navdeep Gupta, Chief Financial Officer
This disciplined approach to margin management illustrates a willingness to trade near-term expense leverage for future market leadership.
Foot Locker integration offers scale and brand leverage
With Foot Locker shareholders and regulators having approved the transaction, the deal is set to close on September 8, and management reiterated $100 million to $125 million synergy targets. The merging of iconic brands will substantially increase DICK'S importance to leading athletic brands, improve bargaining power, and expand addressable market.
"By bringing together DICK'S and Foot Locker's iconic brands, we will create a global leader in the sports retail industry to serve a broader set of consumers, strengthen our partnerships with the world's leading sports brands, and meaningfully expand our total addressable market."
-- Ed Stack, Executive Chairman
This integration will allow for broader consumer segmentation and geographic reach.
GameChanger and digital initiatives fuel differentiated growth
In Q2, the GameChanger app achieved 7.4 million unique active users and 5.5 million average monthly active users, driving nearly 50% annual revenue growth year-over-year and surpassing $100 million in revenue the prior year. Store technology enhancements such as RFID automation and AI-driven personalization are modernizing inventory management, in-store service, and digital marketing capabilities.
"GameChanger continues to do incredibly well, highly profitable, fast-growing, software as a subscription business. In Q2, that continued. So we have -- saw 7.4 million unique active users in Q2. And on average, 5.5 million monthly active users were in the app. That's up percent 16% year over year. We're still on track for the growth numbers. We hit over $100 million last year, and we're on track for almost a 50% revenue growth on that. So everything is going great with GameChanger. I would say one of the more exciting things that's happening also is that the DICK'S and the GameChanger businesses are working closer than ever on things like what we're calling a live experience called BatLab where we're rating with bringing in top athletes and rating all of the new equipment for the year. GameChanger and DICK'S were working on sharing data so that we can be more. And GameChanger is a huge piece of our DICK'S Media Network where we have actually live sports where we can tap into people who are fully engaged in the moment while they're watching their kids, their grandkids, sports in a highly personalized way. So GameChanger is doing fantastic."
-- Lauren Hobart, President & CEO
The company’s proprietary technology platforms are generating unique customer engagement, data, and monetization opportunities unavailable to traditional retailers, underlining a durable competitive differentiator that is early but scaling rapidly.
Looking Ahead
For full year 2025, management raised comparable sales growth guidance to 2%-3.5% and EPS to $13.90-$14.50, now reflecting all known tariff impacts. New store expansion remains on track, with approximately 16 House of Sport and 15 Fieldhouse openings expected, and operating margin guidance set at approximately 11.1% at midpoint with potential for up to 10 basis points expansion. Management will provide more specific details on the Foot Locker deal during the third quarter call, reiterating that all provided guidance excludes any acquisition-related effects.
