Rating Outlook Change

S&P Global Ratings revised its outlook on Dick’s Sporting Goods Inc. (NYSE:DKS) from positive to stable on 4 September 2026, while reaffirming the company’s BBB issuer credit rating.

Leverage and Credit Metrics

The agency now expects the retailer’s adjusted net‑debt‑to‑EBITDA leverage to stay above 2.0× through fiscal 2027, projecting it at approximately 2.4× by the end of fiscal 2026, up from an earlier expectation of a decline to below 2.0× in fiscal 2026 and from a prior estimate of 1.7×. S&P also forecasts adjusted EBITDA margins to contract to 14.8 % in fiscal 2026 from 15.1 % in fiscal 2025.

Foot Locker Acquisition Performance

Foot Locker, acquired by Dick’s in the fall of fiscal 2025, reported a 3.6 % decline in North American comparable same‑store sales and a 3.3 % decline in international (EMEA) comparable same‑store sales. Approximately 85 % of Foot Locker’s revenue is derived from footwear, and recent product launches have under‑performed expectations, raising concerns about product relevance.

Dick’s Core Business

Dick’s own comparable‑store sales grew 4.9 %, driven by increased traffic related to the FIFA World Cup and an expanded product assortment beyond traditional sporting‑goods categories.

Synergy and Cost‑Saving Targets

The company has set a target of $100 million to $125 million in cost‑saving synergies from the Foot Locker acquisition, primarily through procurement and operational efficiencies. S&P notes that these synergies are expected to materialise over the longer term.

Cash Flow and Capital Expenditure

Free operating cash flow is projected to fall to roughly $165 million in fiscal 2026 from about $391 million in fiscal 2025. Capital expenditures are expected to rise to approximately $1.6 billion in fiscal 2026, an increase of about $463 million year‑over‑year, to support new store rollouts and the integration of Foot Locker.

Liquidity Position

As of the end of the second quarter of fiscal 2026, Dick’s held about $914 million in cash and had no borrowings under its $2 billion revolving credit facility.