TradingKey - DICK'S Sporting Goods (DKS) reported second-quarter results on Tuesday that fell short of Wall Street expectations and lowered its full-year guidance due to weak performance at its Foot Locker unit. The company stated that intensifying competition, increased promotional activity in the athletic footwear and apparel market, and more cautious consumers are weighing on certain parts of its business.
Weighed down by both its earnings and lowered guidance, DICK'S Sporting Goods shares tumbled over 20% in pre-market trading Tuesday. Dragged down by broader sector sentiment, Nike (NKE) fell nearly 3% in pre-market trading.
Source: TradingView
As key retail channels for athletic footwear and apparel brands, the sales performance of DICK'S Sporting Goods and Foot Locker is widely viewed as a crucial indicator of end-consumer demand. Consequently, the weaker-than-expected results prompted investors to reassess the growth prospects for the broader sporting goods industry.
Looking at the second fiscal quarter, overall sales at DICK'S Sporting Goods continued to grow. For the quarter ended August 1, net sales reached $5.59 billion, up from $3.65 billion in the prior-year period, but slightly below market expectations of $5.65 billion. Adjusted earnings per share came in at $3.53, also missing Wall Street's forecast of $3.76. Net income stood at $315 million, or $3.50 per share, compared with $381 million, or $4.71 per share, a year earlier. Excluding one-off factors such as the Foot Locker acquisition, adjusted EPS was $3.53.
By business segment, DICK'S Sporting Goods' core operations remained relatively solid, with same-store sales rising 4.9% year-over-year. This was mainly driven by growth across multiple product categories and stronger demand during the World Cup. However, weakness at Foot Locker offset part of those gains. In the second fiscal quarter, Foot Locker's same-store sales fell 3.6% year-over-year, serving as a primary driver behind the earnings miss and guidance cut.
Consequently, DICK'S Sporting Goods lowered its full-year outlook. The company now expects full-year net sales between $21.9 billion and $22.2 billion, down from its previous guidance of $22.1 billion to $22.4 billion. Its consolidated operating income target was adjusted to $1.45 billion–$1.55 billion, down from the prior range of $1.69 billion–$1.81 billion. Meanwhile, full-year same-store sales for Foot Locker are now expected to be flat to down 2%, whereas same-store sales growth for DICK'S Sporting Goods' core brand remains unchanged at 2.5% to 4%.
Company management noted that as the quarter progressed, promotional intensity continued to rise in certain segments of the athletic footwear and apparel market, forcing retailers to offer more competitive pricing to attract shoppers. Executive Chairman Ed Stack stated that Foot Locker was more heavily impacted by the current market environment due to its greater reliance on classic styles, new shoe releases, and retro products.
In fact, Foot Locker is a centerpiece of DICK'S Sporting Goods' recent strategic expansion. DICK'S completed its $2.4 billion acquisition of Foot Locker in 2025, aiming to expand its international footprint, scale its footwear business, and enhance its competitive edge against other retail giants. However, judging by current results, the integrated Foot Locker business has yet to meet market expectations, instead becoming a major drag on the company's profit outlook.
Looking at the broader macroeconomic backdrop, U.S. consumers remain cautious under the weight of high prices, creating a challenging demand environment for discretionary items like athletic shoes and apparel. As price competition among retailers intensifies, brands and distribution channels may need to rely heavily on discounts and promotions to drive sales, which could further squeeze profit margins.
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