S&P Global Ratings has revised its outlook on Dick’s Sporting Goods Inc. to stable from positive, while leaving the retailer's BBB issuer credit rating intact. The ratings firm attributed the change to underperformance in a promotional retail environment and to setbacks in the turnaround of Foot Locker, which Dick’s acquired last fall.
S&P now expects Dick’s adjusted leverage to remain above 2x through fiscal 2027. That is a revision from its prior forecast, which had anticipated leverage falling below 2x in fiscal 2026. On a quantitative basis, S&P projects adjusted leverage of roughly 2.4x by the end of 2026, compared with its earlier expectation of about 1.7x.
The ratings firm also foresees a modest contraction in S&P Global Ratings-adjusted EBITDA margins, with margins seen declining to 14.8% in 2026 from 15.1% in 2025.
Performance at Foot Locker has been a central factor in the revision. Foot Locker recorded a 3.6% drop in same-store sales after product launches underperformed expectations, and S&P highlighted the business’s struggles with product relevance. The ratings note that footwear represents roughly 85% of Foot Locker’s sales, intensifying the impact of relevance issues on overall performance. Geographically, North American comparable same-store sales decreased by 3.6%, while sales across EMEA were down 3.3%.
By contrast, Dick’s Sporting Goods’ core business posted a 4.9% increase in same-store sales, supported by World Cup-related traffic and a broader assortment of products.
The company is targeting cost-savings synergies of $100 million to $125 million from the Foot Locker acquisition. S&P characterized these synergies as mainly coming from procurement and operational efficiencies but viewed them as benefits that will be realized over the longer term rather than immediately.
On the cash flow and capital spending front, S&P forecasts free operating cash flow of about $165 million in fiscal 2026, down from roughly $391 million in fiscal 2025. Capital expenditures are expected to total approximately $1.6 billion in fiscal 2026, an increase of about $463 million year-over-year, with the increment intended to support store rollouts and to fund integration activities related to Foot Locker.
Balance-sheet liquidity remains measurable: at the end of the second quarter of 2026, Dick’s held roughly $914 million in cash and had no borrowings under its $2 billion revolving credit facility.
Contextual note: The outlook change reflects S&P’s assessment of near-to-medium-term operating and financial performance based on current trends and the progress of integration efforts.