DICK'S SPORTING GOODS, INC. (DKS): Results of Operations and Financial Condition
DICK'S SPORTING GOODS, INC. (DKS) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 FOR IMMEDIATE RELEASE DICK'S Sporting Goods, Inc. Reports Second Quarter Results – Delivers 4.9% Comp Sales Growth for the DICK'S Business (A) – – 2026 Outlook Revised Due to Challenging Athletic Footwear and Apparel Marketplace – ● Reported earnings per diluted shar
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What to watch
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DICK'S Sporting Goods Reports Second Quarter Results – Delivers 4.9% Comp Sales Growth for the DICK'S Business; 2026 Outlook Revised Due to Challenging Athletic Footwear and Apparel Marketplace
The DICK'S Business delivered 4.9% comparable sales growth and segment profit of $485.2 million, but proforma Foot Locker comparable sales declined 3.6%, consolidated GAAP operating margin fell to 7.9% from 12.4%, and the company lowered full-year operating income outlook for both businesses.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $5,587 million | – | 53.2% |
| Gross profitGAAP | $1,943,271 thousand | – | – |
| Gross marginGAAP | 34.78% | – | – |
| Gross marginnon-GAAP | 34.06% | – | – |
| Selling, general and administrative expensesGAAP | $1,447,422 thousand | – | – |
| Selling, general and administrative expensesnon-GAAP | $1,425,982 thousand | – | – |
| Merger and integration costsGAAP | $31,605 thousand | – | – |
| Pre-opening expensesGAAP | $23,488 thousand | – | – |
| Operating incomeGAAP | $440,756 thousand | – | – |
| Operating marginGAAP | 7.9% | – | (451) bps |
| Operating incomenon-GAAP | $453,328 thousand | – | – |
| Operating marginnon-GAAP | 8.1% | – | (491) bps |
| Effective tax rateGAAP | 28.0% | – | 286 bps |
| Effective tax ratenon-GAAP | 28.1% | – | 316 bps |
| Net incomeGAAP | $315 million | – | (17)% |
| Net incomenon-GAAP | $319 million | – | (10)% |
| Earnings per diluted shareGAAP | $3.50 | – | (26)% |
| Earnings per diluted sharenon-GAAP | $3.53 | – | (19)% |
| Weighted average diluted shares outstandingGAAP | 90 million | – | 11% |
| Year-to-date net salesGAAP | $10,751 million | – | 57.6% |
| Year-to-date operating incomeGAAP | $891,406 thousand | – | – |
| Year-to-date operating marginGAAP | 8.3% | – | (371) bps |
| Year-to-date net incomeGAAP | $635 million | – | (2)% |
| Year-to-date earnings per diluted shareGAAP | $7.04 | – | (11)% |
| Year-to-date net incomenon-GAAP | $581 million | – | (8)% |
| Year-to-date earnings per diluted sharenon-GAAP | $6.43 | – | (17)% |
| Net cash provided by operating activities, year-to-dateGAAP | $792,274 thousand | – | – |
| Capital expenditures, year-to-dateGAAP | $743,470 thousand | – | – |
| Net capital expenditures, year-to-datenon-GAAP | $614 million | – | 35% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| DICK'S Sporting GoodsComparable sales increased 4.9%, driven by broad-based growth across categories, strong results from the 2026 FIFA World Cup, and growth in average ticket and transactions. Segment profit was $485,204 thousand. | $3,849,887 thousand | – | – |
| Foot LockerProforma comparable sales declined (3.6)%, impacted by challenging conditions in the athletic footwear marketplace, including fewer footwear launches and weaker-than-expected performance of launches. Segment loss was $(31,876) thousand. | $1,736,928 thousand | – | – |
| Proforma consolidated comparable salesComparable sales are calculated on a constant currency basis and Foot Locker is calculated as if acquired at the beginning of the periods presented. | N/A | – | 2.1% |
Full Year 2026 Outlook outlook
- RevenueConsolidated net sales of $21.9 billion to 22.2 billion; DICK'S Business net sales of $14.5 billion to 14.7 billion; Foot Locker Business net sales of $7.4 billion to 7.5 billion
- Tax rateapproximately 29%
- NoteConsolidated GAAP operating income of $1.45 billion to 1.55 billion
- NoteConsolidated non-GAAP operating income of $1.46 billion to 1.56 billion
- NoteGAAP earnings per diluted share of $10.94 to 11.94, based on approximately 90 million diluted shares outstanding
- NoteNon-GAAP earnings per diluted share of $11.00 to 12.00
- NoteGross capital expenditures of approximately $1.6 billion and net capital expenditures of approximately $1.4 billion
- NoteDICK'S Business comparable sales: Positive 2.5% to positive 4.0%
- NoteFoot Locker Business proforma comparable sales: Negative 2.0% to 0.0%
- NoteDICK'S Business segment profit: $1.54 billion to 1.60 billion, or 10.6% to 10.9% of net sales
- NoteFoot Locker Business segment loss: $(80) million to (40) million, or (1.1%) to (0.5%) of net sales
- NoteDICK'S Business capital expenditures: approximately $1.2 billion on a gross basis and approximately $1.0 billion on a net basis
- NoteFoot Locker Business capital expenditures: approximately $0.4 billion on a gross basis and approximately $0.4 billion on a net basis
Capital returns
- During the 26 weeks ended August 1, 2026, the Company repurchased 0.7 million shares at an average price of $196.38 per share, for a total cost of $141.2 million.
- The Company had $3.0 billion remaining under existing share repurchase authorizations as of August 1, 2026.
- Share repurchases were $141 million during the 26 weeks ended August 1, 2026, compared with $299 million in the prior-year period.
- Dividends paid were $225 million during the 26 weeks ended August 1, 2026, compared with $196 million in the prior-year period.
- The Company declared and paid quarterly dividends of $1.25 per share in fiscal 2026.
- The Board declared a quarterly dividend of $1.25 per share on August 24, 2026, payable September 25, 2026 to stockholders of record at the close of business on September 11, 2026.
What drove it
- DICK'S Business comparable sales grew 4.9%, with broad-based category growth, FIFA World Cup results, higher average ticket and transaction growth.
- Foot Locker Business proforma comparable sales declined (3.6)% amid a challenging athletic footwear marketplace.
- The company said marketplace conditions became increasingly promotional in portions of athletic footwear and apparel during the quarter.
- Foot Locker was more affected because of greater exposure to legacy footwear silhouettes and greater dependence on footwear launch and retro product.
- Current-period results included Foot Locker operations for the full 26-week period ended August 1, 2026.
- The current year included the dilutive impact of 9.6 million shares issued in connection with the Foot Locker acquisition.
- The company received $59.0 million in IEEPA tariff refunds and $2.1 million in related interest income during the quarter. Of the refunds, $38.1 million attributable to prior-year tariff costs and the related interest income were excluded from non-GAAP earnings per diluted share.
Concerns
- GAAP operating margin declined to 7.9% from 12.4%, while non-GAAP operating margin declined to 8.1% from 13.0%.
- GAAP diluted earnings per share declined to $3.50 from $4.71, and non-GAAP diluted earnings per share declined to $3.53 from $4.38.
- Foot Locker reported a segment loss of $(31,876) thousand and proforma comparable sales decline of (3.6)% in the quarter.
- The company lowered Foot Locker Business proforma comparable sales outlook to Negative 2.0% to 0.0% and lowered operating income outlook for both the DICK'S and Foot Locker Businesses.
- The company incurred $125.8 million of pre-tax charges during the 26 weeks ended August 1, 2026 from its review of unproductive Foot Locker assets, totaling $515.8 million to date.
- The company currently expects total pre-tax charges up to $750 million, including $200 million in fiscal 2026, with the remaining charges over the medium term.
- The effective tax rate was 28.0%, compared with 25.2% in the prior-year quarter.
What to watch
- DICK'S Business comparable sales performance against its Positive 2.5% to positive 4.0% full-year outlook.
- Foot Locker proforma comparable sales and progress toward its Negative 2.0% to 0.0% full-year outlook.
- The promotional athletic footwear and apparel environment, footwear launch cadence, and performance of launch and retro product.
- DICK'S and Foot Locker segment-profit delivery against respective outlooks of $1.54 billion to 1.60 billion and $(80) million to (40) million.
- Execution of the Foot Locker review, including inventory optimization, closure of underperforming stores, and right-sizing of assets.
- Store portfolio actions: Foot Locker Business closed 110 stores during fiscal 2026, including 67 Foot Locker stores identified through the review of unproductive assets.
- Capital spending against approximately $1.6 billion gross and approximately $1.4 billion net consolidated full-year plans.
Balance sheet and cash flow
- Cash and cash equivalents were $914 million as of August 1, 2026, compared with $1,231 million as of August 2, 2025.
- Inventories, net were $5,565 million, including $3.6 billion for the DICK'S Business and $2.0 billion for the Foot Locker Business. DICK'S Business inventory increased 6% compared with August 2, 2025.
- Long-term debt and financing lease obligations were $1,906 million, compared with $1,485 million as of August 2, 2025.
- The Company had no outstanding borrowings under its revolving credit facility in 2026 and 2025.
- Net cash provided by operating activities was $792,274 thousand for the 26 weeks ended August 1, 2026, compared with $735,641 thousand in the prior-year period.
- Gross capital expenditures were $743 million and net capital expenditures were $614 million for the 26 weeks ended August 1, 2026.
- Cash and cash equivalents decreased by $439,490 thousand during the 26 weeks ended August 1, 2026.
Analysis
DICK'S reported a split second quarter. Consolidated GAAP net sales increased 53.2% to $5,587 million, reflecting inclusion of the Foot Locker Business, while the legacy DICK'S Business delivered 4.9% comparable sales growth. Management attributed DICK'S growth to broad-based category gains, strong 2026 FIFA World Cup results, and growth in average ticket and transactions. DICK'S segment profit was $485,204 thousand, compared with $474,952 thousand in the prior-year quarter.
The Foot Locker Business was the weak point. It generated $1,736,928 thousand of sales but produced a $(31,876) thousand segment loss, and proforma comparable sales declined (3.6)%. Management cited increasingly promotional conditions in athletic footwear and apparel, fewer footwear launches, and launch performance below industry and company expectations. The company said Foot Locker was more exposed to legacy footwear silhouettes and launch and retro product. Foot Locker International proforma comparable sales declined (3.3)% in the quarter.
Profitability declined despite reported sales growth. GAAP gross margin was 34.78%, compared with 37.06%, and GAAP operating margin was 7.9%, compared with 12.4%. GAAP operating income was $440,756 thousand versus $452,185 thousand, while GAAP diluted EPS declined to $3.50 from $4.71. Non-GAAP operating margin was 8.1%, compared with 13.0%, and non-GAAP EPS was $3.53, compared with $4.38. The current-year diluted-share base included the effect of 9.6 million shares issued for the Foot Locker acquisition. The quarter also included $59.0 million of IEEPA tariff refunds and $2.1 million of related interest income, with specified portions excluded from non-GAAP EPS.
Capital deployment remained substantial. Year-to-date operating cash flow was $792,274 thousand and gross capital expenditures were $743 million. The company repurchased $141.2 million of stock and paid $225 million in dividends during the first 26 weeks. Cash and cash equivalents were $914 million, inventories were $5,565 million, and long-term debt and financing lease obligations were $1,906 million at quarter end. The company had no revolving-credit-facility borrowings.
The revised outlook preserves the DICK'S Business comparable-sales range of Positive 2.5% to positive 4.0%, but reduces Foot Locker's proforma comparable-sales outlook to Negative 2.0% to 0.0% and lowers operating-income outlook for both businesses. Consolidated GAAP operating income is now guided to $1.45 billion to 1.55 billion and GAAP EPS to $10.94 to 11.94. Investors should focus on whether DICK'S can sustain its positive comp trajectory as promotional pressure rises, and whether Foot Locker's store closures, inventory optimization, and asset review stabilize losses. The company has incurred $125.8 million of pre-tax review-related charges in fiscal 2026 year to date and expects total pre-tax charges up to $750 million.
Management, verbatim
The DICK'S Business delivered a strong second quarter with broad-based growth across categories. As the quarter progressed, conditions across portions of the athletic footwear and apparel marketplace became increasingly promotional, and we took action to remain competitively priced to protect and grow our leadership position. This environment had a more significant impact on the Foot Locker Business given its greater exposure to legacy footwear silhouettes and greater dependence on footwear launch and retro product. Not only were there fewer launches in the second quarter, but those launches performed below both industry and our expectations. As a result, we are taking a more cautious view of the balance of the year. While these near-term dynamics have led us to revise our expectations for 2026, our confidence in the long-term opportunities ahead for both DICK'S and Foot Locker remains unchanged.
Ed Stack, Executive Chairman
We're proud of our second quarter performance in the DICK'S Business, where we delivered comp sales growth of 4.9% and gained market share despite growing pressure across portions of the athletic footwear and apparel marketplace. Our Q2 results reflect the strength of our athlete-focused strategy, broad differentiated assortment, strong brand partnerships and continued focus on profitable growth opportunities such as House of Sport, GameChanger and DICK'S Media Network. We invested significantly around the FIFA World Cup, and our team delivered outstanding results. While we are taking a more cautious view of the balance of the year, we remain highly confident in the strength of the DICK'S Business and our long-term opportunity at Foot Locker.
Lauren Hobart, President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous quarterly outlook was not provided, so no actual-versus-prior-guidance comparisons are available.
- Quarterly free cash flow was not reported.
- A full non-GAAP reconciliation for the prior-year quarter was not included in the provided filing text.
- Sequential comparisons for quarterly operating metrics were not reported.
- Full-year gross-margin guidance and operating-expense guidance were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Dick's Sporting Goods filed a Form 8‑K reporting Q2 2026 results, including EPS, sales growth, and revised full‑year outlook for its Foot Locker acquisition.
Ticker impact
Q2 earnings released via 8‑K showing $3.50 EPS, 4.9% comparable sales growth and lowered Foot Locker outlook.
Short‑term downside pressure as investors reassess Foot Locker contribution; potential bounce if market focuses on DICK'S core growth.
First‑report 8‑K provides fresh numbers and revised outlook; market typically reacts to guidance changes.
Market effects
Retail sports‑apparel sector may see re‑rating of peers with exposure to athletic footwear.
U.S. consumer discretionary sentiment could soften pending further earnings season.
Foot Locker outlook may affect European footwear distributors linked to the brand.
Counterpoint
Despite the guidance cut, the 4.9% comparable sales growth suggests underlying demand strength.
Key entities
- CompanyDick's Sporting Goods, Inc.
U.S. sports retailer reporting Q2 results.
- Business UnitFoot Locker
Acquired segment with revised pro forma sales outlook.
