Dick’s Sporting Goods, Inc. (DKS) suffered at least three investment firm downgrades of its shares along with severe downward price adjustments across the board from analysts after reporting Q2 results that missed expectations and slashing its outlook due to weakness at Foot Locker.

DKS shares on Tuesday, August 25, tumbled 30.7 percent to close at $124.31 for the day on the news, the stock’s worst trading day since 2023. On Wednesday, DKS shares showed some recovery, rising $5.35, or 4.3 percent, to $129.66.

Revenues in the second quarter reached $5.59 billion, missing analysts’ consensus target of $5.65 billion.

The legacy Dick’s Business, which includes the Dick’s Sporting Goods, Dick’s House of Sport, Golf Galaxy, Going Going Gone! and Public Lands banners, delivered a 4.9 percent increase in comparable sales for the quarter driven by “broad-based growth” across categories, including strong results from the World Cup. However, the Foot Locker business saw comparable sales decline by 3.6 percent, leading the company to revise its full-year outlook for the Foot Locker business to a range of flat to down 2 percent.

Previous guidance called the Foot Locker business to achieve 1.5 percent to 3 percent comparable sales growth.

The company still expects the core Dick’s business to grow between 2.5 percent and 4 percent, but the overall net sales outlook for the year was taken down from a range of between $22.1 billion and $22.4 billion to between $21.9 billion and $22.2 billion.

EPS in the second quarter totaled $3.53 on an adjusted basis, likewise missing the $3.76 expected. Looking ahead, the consolidated operating income outlook was reduced from a previous range of between $1.69 billion and $1.81 billion to a range of $1.45 billion to $1.55 billion.

Among firms downgrading the stock, Telsey Advisory Group lowered its rating to “Market Perform” from “Outperform” and slashed its price target from $255 to $145; Truist Securities downgraded Dick’s from “Buy” to “Hold” and lowered the price target from $270 to $135; and KGI Securities lowered its rating on DKS to “Neutral” and its price target to $135.10 after initiating coverage last September with a “Buy” rating at a $298 target.

Other major investment firms maintained their ratings while significantly downwardly adjusted price targets due to the recent stock price hits and lowered expectations. Among the moves:

  • Goldman Sachs reiterated its “Buy” rating while lowering its price target from $271 to $170;
  • Barclays kept its “Buy” rating while axing its price target from $280 to $150;
  • J.P. Morgan reiterated its “Buy” rating while lowering its price target from $245 to $188;
  • Robert W. Baird reiterated its “Buy” rating and slashed its price target from $264 to $150;
  • Wells Fargo kept its “Overweight” rating and cut its price target to $185 from $240;
  • Oppenheimer reiterated its “Buy” rating while reducing its price target from $270 to $150;
  • Banc of America Securities reiterated its “Buy” rating and trimmed its price target from $245 to $200;
  • Gordon Haskett Capital reiterated its “Hold” rating while cutting its price target from $205 to $130;
  • Jefferies reiterated its “Hold” rating while downwardly adjusted its price target from $224 to $171;
  • Morgan Stanley kept its “Overweight” rating but reduced its price target from $270 to $180;
  • BNP Paribas Equity Research maintained its “Underperform” rating while trimming its price target to $99 from $169;
  • BTIG Research maintained its “Buy” rating while reducing its price target from $300 to $180;
  • DA Davidson maintained its “Buy” rating but cut its price target to $205 from $260;
  • Citi Research kept its “Buy” rating while adjusting its price target to $190 from $280;
  • Loop Capital kept its “Hold” rating and lowered its target to $140 from $235;.
  • Williams Trading kept its “Hold” rating and reduced its price target from $215 to $130.

Even with the downgrades, Dick’s is still earning more “Buy” or “Outperform” ratings from Wall Street versus “Neutral” or “Hold” or “Underoperform ratings. However, many analysts with “Buy” ratings expressed greater concerns over the timing of Foot Locker’s recovery prospects in an increasingly promotional marketplace.

Telsey Advisory Group’s Cristina Fernández said she was downgrading DKS due to a “broader slowdown in demand for athletic apparel and footwear” that was also marked by a profit warning last week from JD Sports. Fernández also cited Foot Locker’s higher exposure to the softer footwear lifestyle market, which now delays the turnaround her team had expected in the business for at least a few quarters.

Fernández wrote, “We attribute the weakness in athletic apparel and footwear to a combination of shifting consumer preferences away from the category and into dressier styles, and a lower level of newness to spur demand. Where there is newness—as in low profile, Mary Jane, adidas’ print and pattern, Nike Mind, and performance footwear—the consumer is responding. But, revenues in those styles are not enough to offset softness in large volume, legacy lifestyle footwear. The slowdown seems to have accelerated markedly as 2Q26 progressed. It also does not seem to be concentrated just on Nike products, although those make up a larger percentage of revenues in the US, but is also affecting brands such as Adidas and New Balance.

She said smaller brands, citing On and Hoka, appear to be performing better. Fernández concluded, “Until there is more innovation from the brands and/or Dick’s can make meaningful changes to the footwear assortment at Foot Locker, we lack visibility into an inflection point, which was previously expected during the 2026 back-to-school season.”

Simeon Gutman, at Morgan Stanley, slashed his price target to $180 from $270 but remained “Overweight” on the stock due to Tuesday’s pullback. Gutman wrote in a note, “We are disappointed that DKS’s years of investment in strengthening its relationship with key brand partners is not sufficient to shield its earnings algo from promotional headwinds as footwear and apparel undergo a destocking cycle over the next few quarters. In addition, we overestimated the speed at which DKS could effect positive change at Foot Locker, which is more exposed to the discounting environment affecting legacy silhouette footwear.”

Gutman said he still has confidence in Dick’s moves to invest in growing the House of Sport concept, growing its omni-channel reach, and expanding digital revenue streams. He wrote, “We recognize that the innovation cycle and lean inventory levels at key brand partners are a precondition for DKS to be able to execute its own strategy, and that promotional headwinds will continue in the near term. That said, promotional periods are cyclical and temporary in nature, and the market has overly punished the stock at the current price levels, in our opinion, even if the Foot Locker turnaround is taking longer to materialize.”

At Barclays, Adrienne Yih believes the stock’s negative reaction on Tuesday “reflects a significant reset of investor expectations for the athletic footwear ecosystem.”

She said that while Dick’s legacy business delivered a “robust” 4.9 percent comp and maintained its full-year sales outlook, “there is an industry-wide reset driven by slowing legacy lifestyle footwear, weak launch product, elevated inventory levels, and an increasingly promotional marketplace. Importantly, performance categories including running remain healthy, while pressure is concentrated in classic lifestyle silhouettes, suggesting the issue extends beyond Nike and now encompasses much of the lifestyle footwear complex.”

Yih, who kept her “Buy” rating while cutting her target to $150 from $280, noted the “largest surprise” was the magnitude of the Foot Locker earnings reset, with expectations moving from a projected a profit in the range of $110 million to $150 million to a loss in the range of $40 million to $80 million.

The revision, according to Yih, suggests both the footwear correction in the marketplace and Foot Locker’s turnaround will take longer than anticipated.

“In our view, the key debate has shifted from market share gains, which Dick’s continues to demonstrate, to the duration of the lifestyle footwear correction and the timing of a return to meaningful product innovation that can reignite category growth and restore margin expansion. Despite lack of visibility, we believe 2H26 expectations are reset. Near term, we acknowledge lack of evidence of the Foot Locker turnaround but believe the sell-off in shares reflects much of the negative investor sentiment. We would expect shares to trade largely range bound until there is greater clarity on innovation, which is slated to come from many of its branded partners during 2027. “

At Baird, Jonathan Komp described the news as a “painful setback,” but kept his “Outperform” rating on DKS. He wrote in a note, “The FQ2 miss and guide-down magnitude surprised us, considering management’s bullish tone relatively recently. While investors are likely to debate the Foot Locker/lifestyle footwear reset timeline, consumer health, F2027E compares, and management/CFO credibility, the core business looks healthy, and fixing Foot Locker provides significant future leverage for EPS (+20 percent starting F2027E appears reasonable).”

Wells Fargo’s Ike Boruchow wrote in a note, “While remaining OW [“overweight”], the 2Q print was as bad as it gets. Big picture, legacy footwear challenges have deteriorated and all signs point to a much more challenged athletic footwear backdrop into 2H (which will weigh on the entire sub-sector).”

Boruchow said the core Dick’s comps and margin performance remains “OK,” but the promotional climate will put downward pressures on margins for the year. Boruchow said, “There has clearly been a material change in athletic footwear over the Summer against the expectation that things would get better by now. The unhealthy marketplace is necessitating aggressive promotions to work through excess  inventory (with MAP breaks and some retailers cutting well below MAP). This was much worse than expected (w/ neg laterals to brands, esp NKE) and gives Bears more evidence that FL will take longer to turn while flow-through can’t be managed.”

Boruchow cut DKS’ price target from $185 from $240 but kept his “Overweight” rating due to strength at the core Dick’s business; newer initiatives including in newer store concepts, GameChanger, paid loyalty, and retail media that are expected to pay off strongly in the future; and “upside for a  FL recovery taking the DKS playbook on merchandising and vendor  relationships and modest recovery in margin embedded today.”

Sam Poser, at Williams Trading, who maintained his “Hold” rating, wrote in a note, “DKS would be a much better company if it had remained a big box sporting goods and golf retailer. Foot Locker is, and will continue to be, a distraction for DKS. The 2Q26 results and lowered FY26 outlook are illustrations of the differences between the expertise needed to run a sporting goods retailer and an athletic specialty retailer. We have no doubt that management was correct is stating, on yesterday’s earnings call, that there the lack of newness in core sneakers have led to challenges for the Foot Locker business. At the same time, we remain convinced that the loss of the strong senior merchant team at Foot Locker, prior to the acquisition, are the primary contributors to the degree of the challenges facing Foot Locker. Simply put, Foot Locker merchants bought too many bad shoes, and not enough good shoes, and its merchandise assortments do not align, by location, with its customer base.”

Lorraine Hutchinson at Banc of America reduced her price target on Dick’s to $200 from $245 but kept her “Buy” rating on DKS as she expects continued strength in the core Dick’s business to support the stock’s multiple. She wrote in a note, “FL guidance now includes declining comps and an operating loss this year, as it invests behind the long-term while also facing near-term promotional challenges. We are encouraged by the strength of the Dick’s business in the face of these industry challenges, and expect 2H to represent a floor for fundamental performance at FL. With the stock now trading at 10x P/E and estimates rebased, we think continued strength at Dick’s will drive multiple expansion and reiterate our Buy rating.”

In reiterating his “Underperform” rating, BNP Paribas Equity Research’s Aubrey Tianello stated he believes the stock’s reaction on Tuesday “was justified” as Dick’s now finds one-third of revenues tied to Foot Locker, thereby increasing the retailer’s exposure to the underperforming Nike brand as well as lower-income and international customers who are “under macro pressure.” He also noted that a “category shift in footwear/apparel away from athletic is gaining traction as revs now skew more exposed to fashion cycles” will impact for the Dick’s and Foot Locker businesses.

Tianello also believes the legacy Dick’s business risks being impacted by slowing footwear growth as the benefit of opening premium in-store decks is lapped as well as by margin pressures from the hefty costs of rolling out House of Hoops. Tianello wrote, “Foot Locker is where it hurts now, but looking ahead we still see risk to shares from core Dick’s.”

Citi Research’s Paul Lejuez, who slashed his price target on DKS to $190 from $280, said many investors had expected weakness at Foot Locker, which showed a 3.6 percent decline in second quarter comps. However, he said “the sudden shift in mgmt tone vs 1Q regarding the challenged industry backdrop (higher promos) seemingly came out of nowhere” and the stock’s hit shows “the market is not only debating the FL business’ value, but also the ability of core Dick’s to preserve earnings while navigating industry pressures.”

Lejuez said he remains “bullish” on DKS and kept his “Buy” rating on the stock. He wrote, “Near term weakness/pressure in Europe and in legacy footwear/apparel (largely Nike, but not just Nike) will likely remain a near-term headwind, but we are optimistic as this might prompt mgmt to close more stores (EMEA/Champs), extract further synergies (and faster), and buy back stock (at a now lower price). We view DKS as a long-term winner in athletic/sporting goods retail.”

Goldman Sachs’ Kate McShane kept her “Buy” rating as she feels the stock’s reset is in line with revised expectations tied to the promotional climate. She wrote in a note, “While the environment has gotten more promotional, we do not believe this changes Dick’s competitive positioning and its ability to capture market share due to its strong vendor relationships. As the industry clears out slower moving legacy silhouettes, we still see a path for innovative designs to resonate with consumers, which Dick’s will have access to. We think today’s outlook has been sufficiently lowered to reflect these pressures. While the stock will likely be in a holding pattern for the next several months, we think the stock reflects the current challenges. We reiterate our Buy but lower our price target to $170.”

Image courtesy Foot Locker/Dick’s Sporting Goods, Inc.