Dick’s Sporting Goods reported disappointing second-quarter earnings on August 25, missing analyst expectations and slashing its full-year profit forecast, sending shares down nearly 20% in premarket trading. The company reported adjusted earnings per share of $3.53, falling $0.25 short of the $3.78 consensus estimate, while revenue of $5.59 billion came in $60 million below the $5.65 billion forecast.
The retailer cut its full-year earnings guidance to $10.94 to $11.94 per share from its previous forecast of $13.27 to $14.27, and lowered full-year sales guidance to $21.9 billion to $22.2 billion from $22.1 billion to $22.4 billion. The stock fell 19.83% in premarket trading to $143.77 from the previous close of $179.33, according to Investing.com’s earnings call transcript.
Executive Chairman Ed Stack attributed the weakness to a shift in market conditions during the quarter. “Not only were there fewer launches in the second quarter, but those launches performed below both industry and our expectations,” Stack said in the earnings call. He noted that inventory levels were building across parts of the industry, leading to a much more promotional environment that pressured overall company earnings.
Dick’s Core Business Outperforms; Foot Locker Drags Results
The earnings miss masked a split performance between Dick’s core business and its recently acquired Foot Locker subsidiary. Dick’s core business delivered 4.9% comparable sales growth, outpacing the broader industry by roughly 200 basis points, according to the earnings call. The company gained market share across footwear, apparel, and hardlines categories, with particular strength in team sports, running, cleats, and outdoor gear.
Foot Locker, however, weighed significantly on consolidated results. The acquired business posted a pro forma comparable sales decline of 3.6% and an operating loss of $31.9 million for the quarter. Management said Foot Locker faces a tougher promotional backdrop, particularly in Europe, and its business remains heavily dependent on legacy footwear styles and product launches that underperformed expectations.
Stack indicated the company is taking action to address Foot Locker’s challenges, including shifting product mix toward in-demand brands and investing in the Foot Locker brand through its first major campaign in more than a decade. The company still expects to achieve $100 million to $125 million in medium-term cost synergies from the acquisition, according to the earnings call transcript.
Broader Market Pressures Weigh on Outlook
Beyond the promotional environment, Dick’s cited several headwinds affecting profitability. The company faced higher supply chain and fuel costs, macroeconomic uncertainty, and geopolitical pressures affecting consumer spending. Reuters reported that consumers remain selective with discretionary spending amid inflationary pressures and economic uncertainty, posing risks to demand for sporting goods and athletic apparel.
Stack said the company is deliberately investing in pricing to protect its leadership position despite the challenging environment. “We believe protecting our leadership position will create long-term value,” he said during the earnings call. The company maintained its comparable sales guidance for the core Dick’s business at 2.5% to 4% growth, but expects Foot Locker pro forma comparable sales to range from down 2% to flat, compared with prior expectations for growth.
The guidance cut aligns with recent analyst sentiment. According to the Investing.com earnings transcript, six analysts revised their earnings estimates downward for the upcoming period following the report. The company plans to report third-quarter results on November 24, 2026.
Sources
- Reuters — Dick’s full-year forecast cuts, sales and profit guidance reduction, consumer spending pressures on athletic apparel demand
- Investing.com — Comprehensive earnings call transcript with detailed financial performance, guidance changes, executive commentary, and analyst questions
- Yahoo Finance / MarketBeat — Stock price reaction, premarket decline, and earnings surprise metrics
