Dick's Sporting Goods' (DKS) big bet for Foot Locker (FL) may have plenty of pitfalls.

The company announced on Thursday a definitive agreement to purchase the sneaker chain for $24 per share, or $2.4 billion, a sizable premium compared to Foot Locker's closing price of $12.87 on Wednesday.

"With macro trends like the growing convergence of sport and culture ... we believe the long-term industry tailwinds remain strong and that this expanded platform is well positioned for long-term growth," CEO Lauren Hobart told investors on a call.

While some say this could bring in new customers, strengthen Dick's partnership with major brands like Nike (NKE), and give the company an international presence, others on Wall Street aren't as wide-eyed.

"The proposed transaction would mean acquiring a structurally challenged, mall-based retailer with 2,410 small-format stores worldwide ... a heavy dependence on one brand [Nike] ... and a weak operating margin of 2.5% in 2024 that would be dilutive to Dick's 11.0% in 2024," Telsey Advisory Group's Joe Feldman wrote in a note clients.

Foot Locker posted a same-store sales decline of 2.6% in preliminary first quarter results, versus Dick's 4.5% growth. It has struggled with sales growth in recent years and has been partially banking its turnaround on a renewed relationship with Nike. Roughly 60% of Foot Locker purchases are from Nike.

Foot Locker's stock surged over 80% on Thursday, while Dick's Sporting Goods sank 14% as investors stewed over the financial risks.

"The industry is dealing with ongoing shifts toward direct-to-consumer distribution," Felman added, "and Foot Locker has been experiencing soft demand since 2018, except for the Covid year in 2021 ... Dick's is already positioned to perform strongly with its current form and strategic initiatives."

Retailers have been struggling in 2025 with sinking consumer sentiments and Trump's tariff war with key manufacturing countries like China and Vietnam. Foot Locker's stock was down more than 40% year to date prior to the announcement.

Read more: What Trump's tariffs mean for the economy and your wallet

The lower valuation may have enticed buyers. The acquisition follows recent retail deals like Skechers' (SKX) buyout by 3G Capital, Versace's sale from Capri Holdings (CPRI) to Prada (1913.HK), and Nordstrom's (JWN) take-private deal with its founding family.

However, "retail integrations tend to be challenging," UBS analyst Michael Lasser said in a note. He pointed to examples such as "Family Dollar and Dollar Tree, General Parts and Advance Auto, Albertson's and Safeway, and even Sears and Kmart."