Dick’s Sporting Goods, Inc. secured a ratings upgrade from J.P. Morgan and saw several price-target hikes by other Wall Street firms after the retailer reported first-quarter results ahead of targets. The report left many analysts more convinced that Dick’s legacy business is retaining its momentum and that Foot Locker is on the path to recovery.
Highlights of the quarter’s performance included same-store sales at the core Dick’s business climbing 6 percent, while the Foot Locker segment returned to profitability and posted its first positive comps in five quarters. Most encouraging was the 6.4 percent comp gain seen at the U.S. Foot Locker banner, boosted by a Fast Break refurbishment program that delivered “double-digit comps in Q1 and meaningful merchandise margin improvement” at retrofitted stores.
Earnings were in line or slightly ahead of analyst estimates. Dick’s management raised the low end of the FY26 comps outlook for Dick’s core business and Foot Locker by 50 basis points and similarly raised operating profit expectations for both businesses.
Nonetheless, shares of Dick’s on Wednesday slid $13.92, or 6 percent, to $219.2 million following the report’s initial earnings release.
Analysts believe some investors were expecting Dick’s earnings to come in stronger, given the 6 percent same-store sales gain in the Dick’s SG business. Dick’s SG business posted flat operating earnings in the quarter as costs related to higher fuel prices, the opening of its sixth distribution center, and a ramp-up in marketing spend ahead of the World Cup offset the margin benefits from the sales gain. Analysts expect Dick’s SG business to better leverage expenses in the second half.
Dick’s was also unable to raise its adjusted EPS guidance for the year due to a higher-than-anticipated tax rate tied to international stores acquired in the Foot Locker acquisition.
On Thursday, May 28, shares of Dick’s showed some recovery, rising $7.10, or 3.2 percent, to close at $226.81 on Thursday, May 28 following the release of favorable analyst notes.
J.P. Morgan upgraded Dick’s to “Overweight” from “Neutral” and hiked its price target to $270 from $240.
J.P. Morgan analyst Christopher Horvers believes that the tax impact on net earnings, disappointing margins at Dick’s, and signs that unfavorable weather in the Northeast is depressing golf rounds there, all combined to put pressure on Dick’s stock. However, he believes the arrival of warmer weather, the payback from the World Cup, and continued progress at Foot Locker will buy the stock.
He noted that Foot Locker’s return to positive comps and operating profit came despite Dick’s team not yet being able to significantly update assortments. Horvors stated, “Chairman Ed Stack’s merchandising touch (and his 50-year relationship with vendors) will start to be seen across FL stores for back-to-school (BTS), with the media brand relaunch alongside, and the ‘clean out the garage’ FL clearance lap in 4Q. We also point to an expected “change in trajectory” in the core DKS gross margin in 2Q as tariffed inventory has been largely sold through with better 2H sales leverage in the core as well (another sticking point in the long-term DKS story).”
Wells Fargo’s Ike Boruchow kept his “Equal Weight” rating on Dick’s while lifting his price target to $220 from $200. He wrote in a note, “We see more good than bad in the 1Q print: FL US is comping positive, the fast-break initiative is driving tangible results that give credibility to the BTS positive inflection, and margin pressure should alleviate at core DSG through the year.”
Regarding his “Equal Weight” rating, Boruchow wrote, “While core Dick’s Sporting Goods performance and positioning remain strong, we believe the near-term visibility remains opaque as the Foot Locker is integrated.”
At Barclays, Adrienne Yih kept her “Overweight” rating and lifted her price target to $280 from $264. The analyst wrote in a note, “We reiterate our Overweight rating on DKS and continue to have a positive view on the core DICK’S banner taking market share in the sporting goods sector. We are also more confident in the visibility into the Foot Locker turnaround and accretion in 2H26 based on the growing track record of the Fast Break initiative. We believe the combined DKS-FL entity will benefit from: 1) improved bargaining power with emerging and existing branded partners; 2) secular trends in health, wellness, and expanding athletics across all ages and demographics; and 3) new experiential formats, including House of Sport, Golf Galaxy and Fast Break, enabling DKS to own the sports category. We also expect Dick’s demand to remain robust with the strengthening of hot brands, including FP Movement and On Apparel expansion, and new brand introductions in select stores of Vuori, Gymshark, Helly Hansen, and Salomon.”
At Telsey Advisory Group, Cristina Fernández reiterated her “Outperform” rating at a $255 target. She wrote in a note, “All in, while the stock ended down 6 percent due to 1Q26 EPS coming in roughly in line despite the better sales, we view the pullback as a buying opportunity. The Dick’s business remains robust, driven by merchandising and new store formats, and the Foot Locker business is in the early stages of what we expect to be a multi-year transformation.”
Williams Trading’s Sam Poser raised his estimates and price target to $215 from $195 but retained his “Hold” rating on Dick’s stock. The analyst wrote, “The core Dick’s business remains strong and healthy, but it remains too early to tell if Foot Locker will work over the long term. We do anticipate that Foot Locker’s SSS [same-store sales] trends will improve beginning at back-to-school, but are unsure if such improvement will be sustainable, or just a bounce off the bottom.”
Morgan Stanley maintained its “Overweight” rating while lifting its price target from $250 to $270. Analyst Simeon Gutman wrote in a note, “While the Dick’s Business operating margin is pressured by World Cup marketing spend in 1H26e, topline momentum is reaccelerating, and 2H26e will bring operating leverage again. Foot Locker visibility improving, buoyed by early merchandise progress and ‘Fast Break’ conversions.”
At Citi Research, Paul Lejuez reiterated his “Buy” rating at a $280 price target. Lejuez wrote, “This is a category killer showing they can keep comp momentum going in the core biz (1Q26 +6 percent vs. 4Q25 +3 percent) while at the same time showing an inflection in the FL business (way ahead of schedule); an impressive first qtr. out of the gate. Dick’s is driving customer acquisition and higher baskets (both on AURs [average unit retails] and UPTs [units per transaction]). FL Fast Break initiatives seem to be working (though in the early innings), and mgmt. is seeing improved partnerships with brands result in better product. Though margins are pressured in 1H26 by investments, they come from a position of strength, and we expect op margin leverage in the 2H.”
Raymond James’ Bobby Griffin reiterated his “Hold” rating. Griffin wrote in a note, “Overall, our thesis remains unchanged. We continue to believe the key investor debates will be centered around Foot Locker’s turnaround, the durability of Dick’s core margin expansion on tougher comparable sales comparisons (SG&A investments continue; DKS banner EBIT was relatively flat on a 6 percent comp), and visibility on consolidated EPS amid the transition year for Footlocker. Taking that into consideration and Dick Sporting Goods’ valuation versus its historical range (~15x NTM EPS vs. 3-year median of ~14x), we remain on the sidelines as we believe the risk/reward is fairly balanced.”
Baird Equity Research reiterated its “Outperform” rating and lifted its target to $264 from $253. Analyst Jonathan Komp also raised his estimates for this year and next on Dick’s “given the core DICK’s momentum combined with faster improvement for Foot Locker.” Komp expects margins for both the core Dick’s and Foot Locker businesses to inflect positively in the second half. He wrote, “ We believe sustainable benefits from strong execution, improved merchandising (and strengthened brand support), and category tailwinds are contributing.”
Image courtesy Dick’s Sporting Goods
