Dick's Sporting Goods (DKS) Sinks 14% on $2.4B Foot Locker (FL) Deal

Faizan Farooque

Thu, May 15, 2025, 1:40 PM 1 min read

Dick's Sporting Goods (DKS, Financials) dropped 14.15% to $179.95 by 12:47 p.m. ET Thursday aft unveiling plans to buy Foot Locker (FL, Financials) for $2.4 cardinal successful cash, hoping to boost standard and upwind brushed demand.

The $24-per-share woody gives Foot Locker an 86% premium implicit its past close. Shares soared 85% to $23.81, portion Dick's banal fell sharply arsenic Wall Street questioned the move.

Foot Locker volition enactment a standalone brand. It operates successful 20 countries and booked $8 cardinal successful income past year. The merger grows Dick's footprint to implicit 3,200 stores.

The woody besides strengthens Dick's presumption with large suppliers similar Nike (NKE, Financials) astatine a clip erstwhile tariffs are squeezing margins.

Foot Locker has faced headwinds from anemic promenade postulation and a rocky narration with Nike. But Nike's caller CEO, Elliott Hill, is restoring ties with retailers.

Still, TD Cowen's John Kernan called the determination a strategical mistake, informing Dick's whitethorn request to put heavy to crook things around.

Dick's volition money the acquisition with currency and caller debt. The woody is expected to adjacent successful the 2nd fractional of 2025.

This nonfiction archetypal appeared connected GuruFocus.