Dick's Sporting Goods shares slide after Foot Locker weighs on earnings

Dick's Sporting Goods shares plunged roughly 30% on Tuesday, their worst single-day drop since 2023, after the retailer reported second-quarter results that fell short of Wall Street's expectations and sharply cut its full-year outlook, as its recently acquired Foot Locker business struggles against a weakening athletic footwear market.

A tale of two segments

The company's core Dick's-branded stores delivered comparable sales growth of 4.9% for the quarter, with average ticket size up 3.6% and transactions up 1.3%, driven by broad-based gains across categories and a tailwind from this year's FIFA World Cup. Foot Locker told a very different story: proforma comparable sales at the chain declined 3.6%, which executive chairman Ed Stack attributed to "conditions across portions of the athletic footwear and apparel marketplace" that grew increasingly promotional as the quarter progressed, along with fewer new sneaker launches that also underperformed both industry and company expectations. Stack said the environment hit Foot Locker harder than the core Dick's business given its heavier reliance on legacy footwear styles and retro product releases.

The numbers

Consolidated net sales rose 53.2% to $5.59 billion, short of the $5.65 billion analysts had expected, with the increase driven almost entirely by the roughly $1.74 billion contribution from Foot Locker, which Dick's acquired for $2.4 billion in a deal that closed in September 2025. Net income for the quarter was $315 million, or $3.50 per diluted share, down from $381 million, or $4.71 per share, a year earlier; adjusted earnings per share of $3.53 missed the $3.78 consensus estimate. Gross margin fell to 34.8% from 37.1% a year ago, a decline the company attributed to Foot Locker, even as the core Dick's segment's own margin expanded. Chief executive Lauren Hobart said the company remains "highly confident in the strength of the Dick's Business and our long-term opportunity at Foot Locker," even while taking "a more cautious view of the balance of the year."

A steep guidance cut

Dick's lowered its full-year adjusted earnings guidance to a range of $11.00 to $12.00 per share, down from a prior range of $13.27 to $14.27 and well below the $14.20 analysts had been expecting, a roughly 19% shortfall at the midpoint. The company narrowed its full-year sales outlook to a range of $21.9 billion to $22.2 billion and now expects Foot Locker's proforma comparable sales for the year to fall somewhere between a 2% decline and flat growth, compared with previous expectations for growth, while maintaining its outlook for the core Dick's business at 2.5% to 4% comparable sales growth. The company also disclosed it received $59 million in tariff refunds during the quarter, along with $2.1 million in related interest income, though that was not enough to offset the broader concerns driving the stock's decline.