Dick’s Sporting Goods Inc. is in advanced talks to buy Foot Locker Inc., whose stock had dropped 41 percent this year amid the back-and-forth over tariffs, according to people familiar with the matter.
Under the transaction being discussed, Dick’s would pay $24 a share for Foot Locker, one of the people said. A deal could be announced as soon as Thursday, said the people, asking not to be identified because the talks were private.
Foot Locker shares closed at $12.87 on Wednesday, giving the company a market value of $1.22 billion. The stock surged more than 60 percent in extended trading in New York after The Wall Street Journal reported talks for what would be a $2.3 billion deal.
A final agreement hasn’t been reached and details including the timing could still change, the people said. Representatives for Dick’s and Foot Locker didn’t immediately respond to requests for comment.
While both chains rely heavily on selling sneakers, a combination would bring together two companies with vastly different business models. Foot Locker is a 2,400-store chain made up of mostly smaller locations in cities around the world, whereas Dick’s is comprised of roughly 800 big-box stores in suburbs across the US.
Dick’s chief executive officer Lauren Hobart has overseen efforts to improve the retailer’s e-commerce capabilities and also invest in its physical stores. The company’s sales growth has tapered off in the two most recent quarters.
The company’s shares fell 6.2 percent at 6:25 p.m. in extended New York trading. The stock has declined 8.4 percent so far this year, lagging the performance of the S&P 400 Midcap Index.
Under chief executive officer Mary Dillon, Foot Locker has been looking to boost sales by renovating a large portion of its store network while promoting its rewards program. The company has worked to mend its relationship with Nike, which had previously pulled back from wholesale partners in a bid to promote its own sales channels.
Dillon, who became CEO in 2022, had laid out an ambitious turnaround plans for Foot Locker, including reaching $9.5 billion in annual sales by 2026. Progress has been hard to come by as US shoppers have reined in on discretionary spending. For the year ended Feb. 1, Foot Locker’s revenue fell for the third year in a row, to less then $8 billion.
“If the purchase goes through, Dick’s would be inheriting a business that remains on the back foot,” said Neil Saunders, managing director at GlobalData. “The comeback is not yet fully in play.”
By Kim Bhasin, Liana Baker and Crystal Tse
Learn more:
Foot Locker Outlook Weighed Down by Discounts, Weak Demand
The retailer forecasted lower-than-expected earnings for the year, citing weaker consumer demand and increased competition for budget-conscious shoppers, sending its stock down over 20 percent this year.