Dick's Sporting Goods Misses Earnings as Foot Locker Turnaround Costs Hit $96.5M
Dick's Sporting GoodsDKS posted a first-quarter 2026 earnings miss Wednesday as $96.5M in Foot Locker acquisition charges erased a top-line beat.
Adjusted earnings per share came in at $2.90, two cents below the $2.92 Wall Street consensus per LSEG. Revenue of $5.17B cleared the $5.09B estimate, lifted by gains in both average ticket and transaction size.
The charges covered $53.8M for merger-related costs, including severance and store closures. The remaining $42.7M went toward clearing excess inventory at Foot Locker locations.
Net income rose to $319.82M, or $3.54 per share. That was up from $264.29M, or $3.24 per share, a year earlier.
Foot Locker posted comparable sales growth of 0.6%, its first positive reading since the end of fiscal 2024.
At Foot Locker US, where Dick's has concentrated the bulk of its turnaround work, comps rose 6.4%.
The Dick's namesake stores added 6%, producing a blended figure of 4.1% across both businesses.
Much of the early traction traces to the Fast Break pilot program, which tests updated product assortments and redesigned store formats. Starting with just 11 locations, the program has grown to roughly 100 stores globally. Those remodeled shops are generating double-digit comparable sales growth and meaningful improvements in merchandise margin.
Executive Chairman Ed Stack described the quarter as showing encouraging early signs at Foot Locker, pointing to the return of positive comparable sales and profitability. By the back-to-school season, the Fast Break rollout is on track to reach 250 stores, with further additions planned ahead of the holiday shopping period.
Foot Locker's full store network, which includes Champs, WSS, and Kids Foot Locker, closed the quarter with roughly 2.5K locations globally.
Guidance Cut Clouds the Profit Outlook
Dick's trimmed its full-year earnings forecast after the turnaround spending pressured margins. The company now expects 2026 earnings per share in a range of $13.27 to $14.27. That's down from prior guidance of $13.70 to $14.70. Consolidated operating income guidance was also cut, to a range of $1.69B to $1.81B, from $1.71B to $1.83B.
Not everything moved lower. Dick's raised its adjusted operating income forecast to a range of $1.71B to $1.83B and tightened its comparable sales outlook upward. The Dick's banner is now expected to grow between 2.5% and 4%, up from the prior range of 2% to 4%. Net sales guidance of $22.1B to $22.4B stayed intact, roughly in line with analyst expectations at $22.4B per LSEG.
Shares fell roughly 3% in premarket trading after the results.
The miss landed despite pre-earnings optimism from JPMorgan, which had placed Dick's on its Positive Catalyst Watch. "optimistic on the top and bottom lines," analyst Christopher Horvers said, flagging footwear momentum and the upcoming World Cup as forward tailwinds for Foot Locker. The turnaround is showing real early signs, but it's still costing more than the market was willing to absorb.