Dick’s Sporting Goods (NYSE: DKS) shares fell sharply on 25 August 2026 after the retailer cut its full-year profit guidance and disclosed a quarterly loss at Foot Locker, the chain it bought less than a year earlier.
The stock dropped about 25% in early trading, sinking to $134.03, according to Schaeffer’s Investment Research. By the early afternoon it was down 27.7% at $129.88, a 20-day low, on volume eight times its average, according to consolidated exchange data.
Foot Locker’s Foot Locker stock loss reverses a turnaround
Foot Locker posted a $31.9 million operating loss for the quarter, alongside a 3.6% drop in comparable sales, Dick’s said on its earnings call, as reported by Investing.com.
That marks a sharp reversal from the first quarter, when the chain reported a $17.5 million segment profit and 0.6% comparable-sales growth, as first reported by Benzinga.
Dick’s now expects Foot Locker to post a full-year operating loss of $40 million to $80 million, having guided in the spring toward a profit, per the earnings call transcript. Dick’s completed the $2.5bn acquisition on 8 September 2025, financed with $2.1bn in stock, $223.0m in cash and a pre-existing equity stake worth $111.6m, according to its quarterly filing.
Guidance cut across the group
Dick’s lowered its consolidated adjusted earnings guidance to $11 to $12 a share, from $13.50 to $14.50, against a Wall Street estimate of $14.31, according to Proactive Investors.
Second-quarter net sales rose 53.2% to $5.59bn, short of the $5.65bn analysts had pencilled in, while adjusted earnings per share came in at $3.53 against a $3.78 estimate, Investing.com reported. Reported diluted earnings per share fell to $3.50, from $4.71 a year earlier, with net income of roughly $315m versus $381.4m in the same quarter last year, according to WWD and Dick’s own filings.
Executive chairman Ed Stack said conditions across the athletic footwear and apparel market had turned increasingly promotional, a factor he linked to Foot Locker’s dependence on sneaker launches and older styles from suppliers such as Nike (NYSE: NKE), as reported by MSN, via Barron’s.
Core Dick’s business still growing
The damage sits almost entirely in the acquired business. Dick’s own nameplate stores grew comparable sales 4.9% in the quarter, helped by the 2026 FIFA World Cup, according to Quartz.
That split has sharpened the market’s focus on integration risk rather than on the core retailer’s trading. Positioning data suggest some investors saw trouble coming: the proportion of Dick’s daily trading volume tied to short sales climbed from 0.469 on 4 August to 0.683 on 24 August, the session before the results, according to FINRA data.
The original May 2025 merger agreement had put Foot Locker’s enterprise value at roughly $2.5bn and its equity value at about $2.4bn, filings show, figures that now sit awkwardly against a business guided toward a loss rather than the profit management had projected as recently as its first-quarter update.
What happens next
Dick’s has not set a date for further Foot Locker-specific disclosure, and the next scheduled update will come with its third-quarter results. Until then, investors are likely to watch whether the promotional pressure Stack described in footwear extends into the crucial autumn sneaker-launch calendar, and whether the World Cup boost to Dick’s core comparable sales carries through the second half.
For now, the market’s verdict has been swift: a deal completed less than a year ago to broaden Dick’s footwear exposure has instead become the single biggest driver of its worst trading session on record.
This article is for information only and is not investment advice or a recommendation to buy or sell any asset. Markets move quickly; figures are correct as sourced at the time of writing. Always do your own research before making financial decisions.
