Dick’s Sporting Goods Stock Slips on Earnings Ahead of Foot Locker Acquisition

The retailer’s merger with Foot Locker is expected to close on Sept. 8. (Justin Sullivan/Getty Images)

Dick’s Sporting Goods stock was down modestly Thursday even after the sporting-goods retailer reported better-than-expected quarterly earnings ahead of its merger with Foot Locker .

The company posted adjusted earnings of $4.38 a share for its fiscal second quarter, surpassing analysts’ forecasts of $4.30, according to FactSet. Comparable-store sales jumped 5% from the prior year, well ahead of Wall Street’s consensus call for 3.4% growth.

Dick’s shares were slipping 0.5% to $225 in premarket trading. The stock was off 1.2% this year as of Wednesday’s close.

The company also raised its fiscal-year guidance for comparable sales growth to between 2% and 3.5%, up from a range of 1% to 3% previously. Fiscal-year per-share earnings are now expected to total between $13.90 and $14.50, up from a previous forecast of $13.80 to $14.40.

“We are very pleased with our strong Q2 results,” CEO Lauren Hobart said in a statement. “Our performance shows how well our long-term strategies are working, the strength and resilience of our operating model and the impact of our team’s consistent execution.”

The beat and raise didn’t give Dick’s much of a boost ahead of the Foot Locker merger, which is expected to close on Sept. 8. Dick’s agreed to buy the sneaker retailer in May for $24 a share, a nearly 90% premium to Foot Locker’s stock price at the time.

The deal initially drew widespread skepticism from investors, but Dick’s stock has gained 27% since the close on May 15, the day the company announced the merger.

Foot Locker’s second-quarter earnings missed estimates Wednesday, with comparable sales declining 2% worldwide. The print had some positive signals in North America, however.

“The company demonstrated sequential improvement in North America with comparable sales increasing 1.4%, led by positive performance across Foot Locker, Kids Foot Locker, and Champs Sports banners,” wrote CFRA Research analyst Zachary Warring in a note.

Foot Locker shares were up 0.7% to $26.66 on Thursday.

Write to Nate Wolf at nate.wolf@barrons.com