One earnings report, two very different stories.

The Dick's Business Is Doing Great

The core Dick's business posted record Q4 sales, with comparable store sales up 3.1% for the quarter and 4.5% for the full year.

Revenue came in at $6.23 billion, ahead of the $6.08 billion consensus. Adjusted EPS of $3.45 beat the $3.03 estimate.

CEO Lauren Hobart called out "strong execution" and a great holiday season. The company's House of Sport concept — its large-format experiential stores — expanded to 35 locations in 2025, with 14 more planned this year.

Foot Locker Is Still Being Cleaned Up

Dick's acquired Foot Locker in September for $2.5 billion, and the cleanup has been expensive.

The Foot Locker segment recorded a $52 million operating loss and saw comparable sales fall 3.4% in Q4. The company took $390 million in charges in fiscal 2025 and expects another $110 million to $360 million in costs this year.

Executive Chairman Ed Stack has a line for it: "In retail, you're never really done cleaning out the garage."

But he sounded more confident Thursday. Stack told CNBC the inventory is "probably cleaner than it has ever been" and that the rightsizing is "basically done."

What Comes Next

Dick's is running an 11-store "Fast Break" pilot for Foot Locker that it says is outperforming the core Dick's business on comps and margin. Plans call for expanding to roughly 250 stores by back-to-school season.

That's the moment of truth. 2026 guidance came in above estimates — adjusted EPS of $13.50 to $14.50 versus the $12.77 consensus — and the stock responded accordingly.

The garage isn't fully clean. But the driveway is looking better.