Dick's Sporting Goods stock fell approximately 18 to 20 percent in trading Tuesday after the Pittsburgh-based retailer reported Q2 fiscal 2026 results that missed Wall Street on revenue, missed on earnings and cut guidance for the Foot Locker business it acquired last year, all on the same morning.
Revenue came in at $5.59 billion against the $5.64 billion consensus. Adjusted EPS of $3.53 missed the $3.76 estimate by 6.2 percent.
Net income fell 17 percent year over year to $315 million as operating margin collapsed from 12.4 percent to 7.9 percent, the Foot Locker acquisition adding revenue and diluting virtually every profitability metric simultaneously.
The Dick's business itself was fine. Its core stores, Dick's Sporting Goods, Golf Galaxy, Public Lands and GameChanger, delivered 4.9 percent comparable sales growth for the quarter, boosted by the 2026 FIFA World Cup driving equipment and merchandise demand. That is the business Dick's investors signed up for.
The Foot Locker business is the problem. Pro-forma comparable sales for the Foot Locker segment, which includes Foot Locker, Kids Foot Locker, Champs Sports, WSS and Atmos, declined 3.6 percent in the quarter.
The company posted a $31.9 million segment operating loss. Athletic footwear and apparel conditions got increasingly promotional as the quarter progressed, executive chairman Ed Stack said, meaning competitors were cutting prices and Foot Locker had to follow.
Dick's now expects the full-year Foot Locker comparable sales range to be flat to down 2 percent, a significant downgrade from prior guidance that had assumed growth. It now expects a full-year Foot Locker operating loss of $40 million to $80 million.
Dick's paid roughly $2.4 billion to acquire Foot Locker in a deal that closed in mid-2025. This is the first full summer with both businesses on the books. The summer did not go well for one of them.