DICK’S Sporting Goods lowered its full-year earnings outlook after a disappointing quarter at Foot Locker underscored the challenges of turning around a footwear-focused retail chain in an increasingly promotional market.
While DICK’S continued to gain momentum across its core banners, newly acquired Foot Locker delivered weaker-than-expected results, sending shares down as much as 15 percent in early trading on Tuesday.
Two businesses moving in opposite directions
The second quarter highlighted a widening gap between DICK’S core operations and the Foot Locker business it acquired for $2.5 billion in September 2025.
Comparable sales at the DICK’S business increased 4.9 percent, supported by broad-based category growth and demand linked to the upcoming 2026 FIFA World Cup. Foot Locker moved in the opposite direction, with proforma comparable sales down 3.6 percent. International operations across Europe and Asia-Pacific declined 3.3 percent.
Reported net sales rose 53.2 percent to $5.59 billion (€4.79 billion), largely reflecting the inclusion of Foot Locker, whose $1.74 billion in quarterly sales was not part of the prior-year comparison.
| DICK’S Sporting Goods, Inc. — Consolidated Income Statement | |||
| 13 weeks ended August 1, 2026 vs. 13 weeks ended August 2, 2025 (€ millions) | |||
| Q2 2026 | Q2 2025 | Change | |
| Net sales | 4,788.2 | 3,125.3 | 53.2% |
| Cost of goods sold | 3,122.7 | 1,967.2 | 58.7% |
| Gross profit | 1,665.5 | 1,158.1 | 43.8% |
| SG&A expenses | 1,240.5 | 753.1 | 64.7% |
| Operating income | 377.7 | 387.5 | -2.5% |
| Net income | 270.4 | 326.9 | -17.3% |
| Diluted EPS (€) | 3.00 | 4.04 | -25.7% |
| Non-GAAP diluted EPS (€) | 3.03 | 3.75 | -19.4% |
| DICK’S Business comparable sales | +4.9% | +5.0% | – |
| Foot Locker Business proforma comparable sales | -3.6% | -2.2% | – |
Source: DICK’S Sporting Goods, Inc. Q2 fiscal 2026 earnings release and GAAP to non-GAAP reconciliation tables, August 25, 2026. Original figures reported in US dollars, converted to euros at a spot rate of 1 EUR = 1.1668 USD (August 25, 2026). Percentage changes calculated from original US dollar figures.
The additional revenue did little to support profitability. Operating income fell 2.5 percent to $440.8 million, while the operating margin narrowed to 7.9 percent from 12.4 percent a year earlier. Non-GAAP diluted earnings per share declined to $3.53 from $4.38.
Foot Locker drives guidance reset
Management’s revised outlook made clear where the pressure is coming from.
DICK’S maintained its full-year comparable sales outlook for its namesake business at growth of 2.5 percent to 4.0 percent. However, it lowered expectations for Foot Locker, which is now projected to deliver proforma comparable sales of between negative 2.0 percent and flat for the year. Executives attributed the weaker outlook to a lighter product launch calendar and softer demand for retro and legacy footwear franchises, categories that remain particularly important to Foot Locker’s customer base.
| DICK’S Sporting Goods, Inc. — Results by Segment | |||
| 13 weeks ended August 1, 2026 (€ millions) | |||
| DICK’S Business | Foot Locker Business | Consolidated | |
| Net sales | 3,299.9 | 1,488.4 | 4,788.2 |
| Gross profit | 1,248.9 | 382.1 | 1,665.5 |
| Gross margin (% of segment net sales) | 37.8% | 25.7% | 34.8% |
| Segment profit (loss) | 415.8 | -27.3 | – |
| Segment margin (% of segment net sales) | 12.6% | -1.8% | – |
Source: DICK’S Sporting Goods, Inc. Q2 fiscal 2026 earnings release, supplemental segment information, August 25, 2026. Original figures reported in US dollars, converted to euros at a spot rate of 1 EUR = 1.1668 USD (August 25, 2026). Segment profit represents operating income for the respective segment and excludes corporate and other income/expense, which is not allocated by segment; consolidated total therefore shown as non-comparable (–). Foot Locker Business was acquired September 8, 2025, so no prior-year segment comparison exists.
The company reduced its full-year operating income forecast to $1.45 billion to $1.55 billion, down from a previous range of $1.69 billion to $1.81 billion. Net sales guidance was also lowered to $21.9 billion to $22.2 billion.
A more competitive environment and Foot Locker exposure
Both revenue and earnings missed Wall Street expectations in the quarter. Executive Chairman Ed Stack said market conditions became increasingly competitive as the quarter progressed, prompting the company to adopt a more cautious outlook for the rest of the year. Foot Locker’s performance remains heavily dependent on footwear innovation cycles and launch activity, leaving it more exposed than DICK’S diversified retail model when key franchises lose momentum.
A ripple effect reaches Nike
The pressure also hit Nike, a major wholesale partner of both the DICK’S and Foot Locker banners. Nike shares fell 2.4 percent in pre-market trading on the news, opening near the bottom of its 52-week range of $38.86 to $79.51.
Foot Locker remains the key integration challenge
Store activity also highlighted how much of DICK’S near-term transformation is now tied to Foot Locker. While DICK’S continued to invest in growth through its House of Sport and Field House formats, the Foot Locker business remained in rationalization mode, closing 110 stores and opening 27 during the quarter.
The contrast underscores the challenge facing management: integrating a chain that is still shrinking and restructuring while protecting the momentum of the core DICK’S business.
Nearly a year after the acquisition closed, Foot Locker remains the group’s biggest opportunity, but also its largest source of operational and earnings pressure.
