Dick's Sporting Goods Stock Crashes 30% After Foot Locker Bet Sours, Full-Year Profit Guidance Slashed

Dick's Sporting Goods had the worst single trading day in its history on Tuesday, August 25, 2026. Shares fell roughly 30% and closed at $124.31, down $55.20 from Monday's close, according to WWD. The drop erased billions in market value and dragged down other retailers, including Nike, according to BigGo Finance.

The trigger was the company's fiscal second-quarter earnings report, released Tuesday, covering the period through August 1. Revenue came in at $5.59 billion, up 53.2% year over year but below Wall Street's consensus estimate of $5.65 billion, according to BigGo Finance. Adjusted earnings per share hit $3.53, missing the $3.78 analysts expected.

The most significant issue was guidance. Dick's slashed its full-year adjusted EPS outlook to a range of $10.94 to $11.94, according to WWD, down sharply from the $13.27 to $14.27 range it had projected back in May. Full-year revenue guidance also came down, to $21.9 billion to $22.1 billion from a prior $22.1 billion to $22.4 billion.

The Foot Locker Problem

Dick's core business is not the issue. Comparable sales at Dick's-branded stores rose 4.9% in the quarter, in line with expectations and helped by strong World Cup-related demand, according to Briefs.co.

The trouble is Foot Locker, which Dick's acquired for $2.4 billion in a deal that closed in September 2025 to expand into the sneaker market and international retail, according to Fox Business. Foot Locker's comparable sales fell 3.6% in the quarter, well below Wall Street's expectation of a slight increase. The company now expects Foot Locker's full-year comps to range from flat to down 2%, a reversal from the growth executives had projected as recently as May.

Executive Chairman Ed Stack described the situation on the earnings call as a footwear "hangover," according to WWD. "There are several suppliers that have got some inventory that have been promoted on their sites, and it's spilled over into the marketplace," Stack said. "I think the market is going to continue to be promotional through the balance of the year."

Stack also said legacy sneaker styles are losing steam industry-wide. "Not only were there fewer launches in the second quarter, but those launches performed below both industry and our expectations," he said, according to Fox Business. CEO Lauren Hobart struck a more optimistic note, saying the company remains "highly confident in the strength of Dick's business and our long-term opportunity at Foot Locker."

Stack pointed to bright spots too, citing strong performance from Nike's Vomero and Pegasus running shoes, momentum at On, Adidas and Hoka, and what he called red-hot demand for Ugg and Birkenstock, according to WWD.

Wall Street's Take and a Legal Probe

Neil Saunders, managing director at GlobalData, told Fox Business the weak footwear demand "does not bode well for the major sneaker brands" even though the World Cup may have offset some of it through apparel sales. "Even so, it will set alarm bells ringing for investors," he said.

CNBC's Jim Cramer argued the selloff may be overdone for long-term holders, noting Dick's now trades at roughly nine times projected 2027 earnings. He pointed to 2023, when Dick's shares fell 24% on a bad earnings report, bottomed two months later around $100, then rallied roughly 150% over the following 15 months. But Cramer also called the Foot Locker deal "increasingly looking like a misstep," saying "clearly, they're having trouble turning this business around."

Separately, the law firm Bleichmar Fonti & Auld announced it is investigating whether Dick's committed securities fraud by misleading investors about Foot Locker integration risks, excess inventory and competitive discounting pressure before Tuesday's crash. This is an investigation by a plaintiffs' law firm soliciting shareholders for a potential class action, not a government enforcement action. No securities regulator has announced an investigation, and no charges have been filed. The Securities and Exchange Commission has not commented publicly on Dick's.

What's Actually Going On

The company itself, through Stack and Hobart, attributes the miss to a broad, industry-wide slowdown in legacy sneaker demand and heavier discounting from competitors trying to clear inventory, not to any single controllable failure. That's a materially different explanation than "the acquisition was mismanaged," and it's their explanation to defend or fail on in future quarters.

Older Breitbart reporting on Dick's, from 2018, tied a much smaller sales slump to the company's decision to stop selling certain semiautomatic rifles after the Parkland shooting. That controversy is unrelated to this week's crash. Tuesday's guidance cut is about footwear inventory and the Foot Locker integration, not firearms policy, and nothing in the current earnings report or the executives' comments mentions gun sales.

The open question is whether the "hangover" Stack describes is a temporary industry-wide inventory glut that clears by early 2027, or a structural shift away from legacy sneaker styles that permanently dents Foot Locker's turnaround math. Dick's next earnings report will show whether the discounting cycle Stack predicted through year-end actually eases, or whether the company cuts guidance again.