Dick’s Sporting Goods (DKS) just had one of the roughest trading days in its history, and Wall Street is taking notice.
Shares of the sporting goods giant fell 30.7% after the company posted a second-quarter miss and cut its guidance for the rest of fiscal 2026.
The selloff followed weaker-than-expected results from Foot Locker, the shoe retailer Dick’s acquired last year, along with a much more promotional market for athletic footwear and apparel.
Now Goldman Sachs (GS) is adjusting its outlook on DKS stock to match the new reality, even as the firm keeps its long-term confidence intact.
Goldman Sachs cuts DKS stock price target
Goldman Sachs lowered its price target on Dick’s Sporting Goods to $170 from $271, according to a research note published on the The Fly.
The firm, however, maintained its Buy rating on DKS stock. The note pointed to two forces behind the stock drop.
First, Foot Locker’s comparable sales came in weaker than expected, and the company leaned more heavily into discounts to move inventory. Second, the broader athletic footwear market turned unusually promotional during the quarter, squeezing margins across the industry.
Related: Sportswear giant closes 113 stores as shares plunge
Still, Goldman found reasons for optimism. The analyst cited strong comparable sales at the core Dick’s business, the company’s vendor relationships, and a guidance reset that the firm sees as more realistic going forward.
Those factors, Goldman said, support a more balanced long-term view of the stock.
This is not the first time this year Goldman has shown confidence in Dick’s.
On May 1, 2026, the firm added Dick’s Sporting Goods and Broadcom to its U.S. Conviction List, a curated group of 20 to 25 stocks that Goldman’s Americas research team believes represent its most differentiated “Buy” ideas, according to Investing.com.
Dick’s Sporting Goods shuts its stores
Behind the guidance cut is a wave of store closures tied to the Foot Locker integration. Dick’s Sporting Goods closed 113 stores across its portfolio during fiscal 2026 through the second quarter.
Of those, three were tied to core Dick’s locations, and 110 belonged to the Foot Locker business.
Executive Chairman Ed Stack addressed pressure on the company’s second-quarter earnings call. He said inventory built up across the footwear industry as certain legacy shoe styles and apparel lines lost popularity with shoppers who want newer, more innovative products.
The inventory buildup pushed brands and retailers into deeper discounting, a trend Stack said spilled across the entire marketplace.
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Foot Locker felt the impact more than the core Dick’s business.
President and CEO Lauren Hobart and Stack both noted that Foot Locker relies more heavily on footwear and on new product launches than Dick’s does, so the slowdown in launches and legacy silhouettes hit its results harder.
The business in Europe, the Middle East, and Africa also struggled more than expected, weighed down by a cautious consumer and an even more competitive overseas pricing environment.
“Based on fuel costs, the consumer is much more cautious in EMEA,” Stack stated. “The excess inventory that’s out there really contributed to this real margin pressure, and you’ve seen that from some other retailers in Europe that have talked about how promotional the market is and how difficult the consumer is.”
DKS Q2 reflects a mixed quarter
Consolidated net sales for DKS jumped 53.2% to $5.59 billion in the quarter, largely due to to Foot Locker’s $1.74 billion contribution.
The core Dick’s business posted a 4.9% comparable sales increase, helped by strong ticket growth and World Cup-related demand. On a two-year and three-year basis, Dick’s comps rose 9.9% and 14.4%.
Pro forma comparable sales for Foot Locker fell 3.6% for the quarter, with declines in both North America and international markets.
Company-wide, gross profit reached $1.9 billion, or 34.8% of net sales.
For the rest of the year, Dick’s now expects consolidated non-GAAP earnings per diluted share between $11 and $12, down sharply from its prior forecast of $13.50 to $14.50.
The company also lowered its outlook for Foot Locker, now projecting an operating loss between $80 million and $40 million for the year instead of the profit it had previously guided toward.
Even with the cuts, leadership stressed that the core Dick’s business remains healthy. Navdeep Gupta, the company’s Chief Financial Officer, said growth areas like DICK’S Media Network and GameChanger are becoming bigger drivers of margin expansion, helping offset the pressure from a tougher footwear and apparel market.
Investors will be watching closely to see whether that reset outlook, paired with continued investment in marketing and store upgrades at Foot Locker, is enough to stabilize DKS stock in the coming quarters.
Is DKS stock undervalued?
Valued at a market cap of $12.1 billion, DKS stock is down 47% from all-time highs.
Given consensus data compiled from Tikr.com, analysts tracking the stock project adjusted earnings per share to expand from $11.77 per share in fiscal 2027 (ending in January) to $18.41 per share in fiscal 2030.
If DKS stock is priced at 11x forward earnings, similar to the current multiple, it could surge over 50% within the next three years.
Out of the 21 analysts covering the large-cap stock, 12 recommend “Buy,” eight recommend “Hold,” and one recommends “Sell.”
The average DKS stock price target is $161, indicating an upside potential of 21% from current levels.
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