Revenue Recognition
Sales Transactions
Revenue is recognized upon satisfaction of all contractual performance obligations and transfer of control to the customer and is measured as the amount of consideration to which the Company expects to be entitled to in exchange for corresponding goods or services. Substantially all of the Company’s sales are single performance obligation arrangements for retail sale transactions for which the transaction price is equivalent to the stated price of the product or service, net of any stated discounts applicable at a point in time. Each sales transaction results in an implicit contract with the customer to deliver a product or service at the point of sale. Revenue from retail sales is recognized at the point of sale. Sales tax amounts collected from customers that are assessed by a governmental authority are excluded from revenue.
Revenue from eCommerce sales, including vendor-direct sales arrangements, is recognized upon shipment of merchandise. Shipping and handling activities occurring subsequent to the transfer of control to the customer are accounted for as fulfillment costs rather than as a promised service. Subscription revenue from our GameChanger platform is recognized ratably over the subscription period with our customers. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded.
Deferred Revenue
Revenue from gift cards and returned merchandise credits (collectively the “cards”) is deferred and recognized upon their redemption. Income from unredeemed cards is recognized on the Consolidated Statements of Income within net sales in proportion to the pattern of rights exercised by the customer in future periods. The Company performs an evaluation of historical redemption patterns from the date of original issuance to estimate future period redemption activity. During the fiscal years ended January 31, 2026 and February 1, 2025, the Company recognized $41.3 million and $30.6 million of gift card breakage revenue, respectively. For the DICK’S segment, approximately $118.5 million and $115.5 million of gift card redemptions were recorded in fiscal 2025 and fiscal 2024, respectively, that had been included in its gift card liability as of February 1, 2025 and February 3, 2024, respectively. Additionally, the Company acquired gift card liabilities totaling $22.5 million in connection with the Foot Locker acquisition. Based on the Company’s historical experience, the majority of gift card revenue is recognized within 12 months of deferral. The cards have no expiration date.
Loyalty program points are accrued at the estimated retail value per point, net of estimated breakage. The Company estimates the breakage of loyalty points based on historical redemption rates experienced within the loyalty programs. Based on the Company’s customer loyalty program policies, the majority of program points earned are redeemed or expire within 12 months. Refer to Note 7 – Deferred Revenue and Other Liabilities for additional information regarding the amount of these liabilities at January 31, 2026 and February 1, 2025.
Net sales by category
The following table disaggregates the amount of net sales attributable to hardlines, apparel and footwear for the last three fiscal years (in millions): | | | | | | | | | | | | | | | | | |
| Fiscal Year |
| 2025 (4) | | 2024 | | 2023 |
Footwear (1) | $ | 6,888.0 | | | $ | 3,829.0 | | | $ | 3,388.7 | |
Hardlines (2) | 5,048.3 | | | 4,899.3 | | | 4,915.5 | |
Apparel | 4,895.4 | | | 4,425.4 | | | 4,329.8 | |
Other (3) | 383.4 | | | 289.1 | | | 350.4 | |
| Total net sales | $ | 17,215.1 | | | $ | 13,442.8 | | | $ | 12,984.4 | |
| | | | | |
(1)Includes athletic shoes for running, walking, tennis, fitness and cross training, basketball and hiking. In addition, this category also includes specialty footwear, including casual footwear and a complete line of cleats for team sports.
(2)Includes items such as sporting goods equipment, fitness equipment, golf equipment and fishing gear.
(3)Includes the Company’s non-merchandise sales categories, including in-store services, shipping, GameChanger, retail media network and licensing revenues.
(4)Includes $3.1 billion of net sales for the Foot Locker segment since the acquisition date. Refer to Note 2 – Acquisition of Foot Locker for additional information.