Dick's Sporting Goods Earnings Miss, Guidance Cut

DICK'S Sporting Goods (NYSE: DKS) reported second-quarter results on Aug. 25, cutting its full-year 2026 outlook after revenue and adjusted earnings fell short of expectations. The company cited weakness at the acquired Foot Locker business and promotional athletic-footwear conditions that pressured margins, according to a press release.

Quarter Results and Margin Pressures

The second fiscal quarter ended Aug. 1, 2026, covering 13 weeks and including the recently acquired Foot Locker business. Consolidated net sales rose about 53.2% year over year to $5.59 billion, driven by the Foot Locker consolidation and growth at Dick’s core banner.

Non-GAAP diluted earnings per share (EPS) were $3.53, below the prior year and analyst estimates near $3.77. Management attributed the shortfall to margin pressures that outweighed top-line gains.

Consolidated gross profit totaled about $1.9 billion, with gross margin narrowing by roughly 230 to 300 basis points to about 34.0%–34.8%. Operating income contracted to approximately $441 million–$453 million, pushing operating margin down to 7.9%–8.1% from about 12.4%–13.0% a year earlier.

At the Dick’s banner, same-store sales rose 4.9%, supported by broad category strength and World Cup-related demand, while gross margin expanded about 79 basis points year over year. In contrast, Foot Locker’s pro forma comparable sales fell 3.6%, and the chain recorded an operating loss near $32 million. The lower-margin Foot Locker business materially pressured consolidated margins. Dick’s standalone operating income was about $485 million, with a margin near 12.6% of net sales.

Inventory increased to roughly $5.6 billion, primarily reflecting the addition of Foot Locker stock. The company attributed the inventory level to consolidation and assortment carried into the period.

Net capital expenditures totaled about $325 million, and the company paid approximately $111 million in dividends. The quarter also included a $59 million tariff refund and about $2 million in related interest income.

Revised Full-Year Guidance

DICK'S lowered its full-year 2026 net sales guidance to $21.9 billion–$22.2 billion from $22.1 billion–$22.4 billion. It trimmed consolidated operating income guidance to $1.45 billion–$1.55 billion from $1.68 billion–$1.81 billion and cut adjusted EPS guidance to $11.00–$12.00 from $13.50–$14.50. The company attributed the revisions to weaker footwear demand in parts of its newly consolidated base.

The adjusted EPS midpoint fell about 18%–20% to roughly $11.50 from $14.00, while the sales midpoint declined modestly. Management said the changes reflect intensified promotional activity in athletic footwear and apparel during the year.

Executives maintained a Dick’s business comparable-sales outlook of 2.5% to 4.0% growth but lowered Foot Locker’s pro forma comparable-sales outlook to –2.0% to 0.0% from 1.5% to 3.0%. Management cited an increasingly promotional athletic-footwear and apparel marketplace and said it took pricing actions to remain competitively priced, which weighed on margins.

The company filed a Form 8-K dated Aug. 24, 2026, attaching the press release as Exhibit 99.1 and noting the release would be issued on Aug. 25. An earnings conference call followed to discuss results and the revised outlook.

The results also reflected the dilutive impact of 9.6 million shares issued in connection with the Foot Locker acquisition. Management cited the share issuance and the lower-margin profile of the acquired business as factors in the consolidated EPS outcome.

The guidance cut highlights how the lower-margin Foot Locker business and intensifying promotions in athletic footwear and apparel have eroded consolidated profitability, even as Dick’s core stores show healthy demand. This leaves the company’s near-term performance more dependent on its integration and pricing strategies.