DICK'S Sporting Goods, Inc. DKS lowered its fiscal 2026 profit outlook after a softer-than-expected second quarter. Adjusted earnings of $3.53 per share missed the Zacks Consensus Estimate of $3.78, while revenues of $5.59 billion trailed the consensus mark of $5.63 billion.
The DICK'S Business still delivered 4.9% comparable sales growth, but pro forma comparable sales for the Foot Locker Business fell 3.6%. Rising promotions in athletic footwear and apparel, weaker Foot Locker product trends and higher costs drove a more cautious full-year view.
For fiscal 2026, DKS now expects adjusted earnings of $11.00-$12.00 per share, down from the prior $13.50-$14.50 range. Consolidated net sales are projected at $21.9-$22.2 billion compared with the earlier $22.1-$22.4 billion outlook.
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Foot Locker remains the largest pressure point. The business generated $1.74 billion in second-quarter revenues, but demand was hurt by weaker legacy footwear silhouettes, fewer product launches and softer consumer response to launches. DKS now expects Foot Locker to post an operating loss of $40-$80 million for fiscal 2026, reversing its prior expectation for $110-$150 million in operating profit. Its comparable sales outlook was reduced to a decline of 2% to flat.
Margin pressure is broadening beyond the acquired business. Consolidated adjusted gross profit was $1.9 billion, or 34.1% of sales, down 300 basis points year over year. Promotional activity, higher fuel and supply-chain costs and the Foot Locker mix weighed on profitability. Adjusted selling, general and administrative expenses rose 65% to $1.4 billion, including $477 million tied to Foot Locker, while DICK'S also invested in World Cup marketing, digital initiatives and in-store experiences.
The category backdrop remains uneven across major athletic brands. NIKE, Inc. NKE reported fiscal fourth-quarter 2026 wholesale revenues up 4% year over year, while NIKE Direct revenues fell 7%. Under Armour, Inc. UAA recently updated its fiscal 2027 revenue expectations amid what management described as a challenging consumer demand environment, while maintaining its full-year profitability outlook. Those mixed signals reinforce the importance of product freshness, channel discipline and full-price demand across the athletic marketplace.
DICK'S Sporting Goods, Inc. Price and Consensus
DICK'S Sporting Goods, Inc. price-consensus-chart | DICK'S Sporting Goods, Inc. Quote
The core DICK'S Business provides an offset. Its second-quarter comparable sales growth reflected higher average ticket, more transactions and broad-based gains across footwear, apparel and hardlines. Management also cited strong FIFA World Cup results and market-share gains. DKS continues to expand House of Sport and Field House locations and is investing in GameChanger and its loyalty ecosystem, even as those initiatives add near-term expense.
The bottom line is a split operating picture. The DICK'S Business is still producing positive comparable sales, but Foot Locker weakness and a more promotional market are taking a larger toll on earnings than management previously expected. DKS shares have lost 33.2% in the past six months compared with a 20.5% decline for its industry.
The stock currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DKS has a VGM Score of B and a Value Score of B, alongside a Growth Score of C and a Momentum Score of D. The stronger value-oriented readings do not override the Zacks Rank because the Style Scores are designed to complement the Rank. The current combination points to a weaker near-term setup despite some favorable valuation characteristics, keeping estimate trends and Foot Locker execution central to the stock's outlook.
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This article originally published on Zacks Investment Research (zacks.com).