Dick’s Sporting Goods stock suffered its sharpest selloff in years on Tuesday after the retailer missed Wall Street’s second-quarter expectations and slashed its full-year outlook.
Shares of Dick’s Sporting Goods (NYSE: DKS) closed 30.7% lower at $124.31, which made the company one of the biggest decliners on Wall Street for the session.
Dick’s Sporting Goods stock price (Source: CoinCodex)
Foot Locker Emerges as the Main Problem
Dick’s reported adjusted earnings of $3.53 per share on revenue of $5.59 billion for the quarter ended Aug. 1. Analysts expected earnings of $3.76 per share and $5.65 billion in revenue.
The headline revenue increase looks impressive as sales were up more than 50% year over year, but much of that growth reflects Dick’s acquisition of Foot Locker rather than organic expansion. Foot Locker was acquired in 2025 in a deal valued at roughly $2.4 billion.
Q2 2026 earnings
The contrast between the two businesses was stark. Comparable sales at Dick’s rose 4.9%, supported by broad-based category growth and demand surrounding the World Cup. Foot Locker’s pro forma comparable sales fell 3.6%, while the Foot Locker segment recorded a loss of roughly $32 million. Consolidated operating margin also dropped to 7.9%, compared with 12.4% a year earlier.
Foot Locker’s challenges are not entirely new. During the previous fiscal year, its pro forma comparable sales declined 3.3%, including an 8.1% drop internationally. Dick’s has been testing redesigned merchandise assortments and presentation through its “Fast Break” initiative while reviewing underperforming inventory and stores.
Dick’s Cuts 2026 Forecast
Management now expects full-year sales of $21.9 billion to $22.2 billion, down from its previous $22.1 billion to $22.4 billion forecast. Consolidated operating income guidance was cut to $1.45 billion to $1.55 billion.
Foot Locker comparable sales are now expected to range from flat to down 2%, while Dick’s maintained its forecast for comparable-sales growth of 2.5% to 4%.
The company originally projected that the Foot Locker acquisition could eventually generate $100 million to $125 million in cost synergies.
That long-term opportunity is still there, but Tuesday’s selloff suggests investors are concerned about how much time and money will be required to turn Foot Locker around.
