Foot Locker (FL) Q1 2026 earnings summary

Executive summary

• Entered into a definitive merger agreement with DICK'S Sporting Goods, offering $24.00 per share in cash or 0.1168 shares of DICK'S stock, expected to close in the second half of 2025, pending shareholder and regulatory approvals.

• Total sales for Q1 2025 decreased 4.6% year-over-year to $1,788 million, with comparable sales down 2.6% due to macroeconomic headwinds and lower customer traffic.

• Net loss of $363 million for the quarter, compared to net income of $8 million in Q1 2024, driven by significant non-cash impairment charges and a valuation allowance.

• Continued store modernization with 69 store refreshes and launched new mobile apps for Champs Sports and Kids Foot Locker.

Financial highlights

• Gross margin declined to 28.4% from 28.8% year-over-year, reflecting increased promotional activity and deleverage in occupancy costs.

• SG&A expenses were $458 million, flat year-over-year, but increased as a percentage of sales to 25.6%.

• Cash and cash equivalents at quarter-end were $343 million; total debt was $445 million.

• Merchandise inventories were $1,665 million, up 0.4% year-over-year; down 0.7% excluding FX.

• Free cash flow was negative $61 million, compared to negative $18 million in Q1 2024.

Outlook and guidance

• Full-year capital spending expected to be $270 million, plus $30 million for software-as-a-service implementation, totaling $300 million.

• Plans to open 80 "Reimagined" stores and refresh 300 existing stores in 2025.