Why Dicks Sporting Goods Stock Crashed Today
Key Points
Dick's Sporting Goods missed on earnings Tuesday morning.
Management followed up the miss by warning profits and sales will fall short all year long.
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Dick's Sporting Goods (NYSE: DKS) stock crashed 23% in the first 15 minutes of trading Tuesday after reporting an earnings miss this morning.
Analysts expected Dick's to earn $3.78 per share on $5.65 billion in sales for Q2 2026, but the sports equipment retailer reported a profit of only $3.53 per share, and sales came in just under $5.6 billion.
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Dick's Q2 earnings
And that was the good news. The bad news is that "$3.53" per share was only Dick's non-GAAP earnings number; actual earnings calculated under generally accepted accounting principles (GAAP) were a bit worse at $3.50 per share -- down 26% from one year ago.
Dick's did note that its earnings were affected by the issuance of 9.6 million shares in connection with its acquisition of Foot Locker, which grew the share count to 90.1 million, diluting earnings among more shares outstanding. Still, dilution accounted for only about 11% of the earnings decline.
The rest is on Dick's.
What's next for Dick's stock?
Not all Dick's news was bad. Same-store sales grew a respectable 4.9%, and the addition of Foot Locker's revenue stream helped to grow the company's total sales by 53%. Still, 53% sales growth translating into a 26% decline in profits is a bad look for Dick's.
Turning to guidance, we find a second reason for investors to be upset with the retailer today. Wall Street expected Dick's to earn $14.20 per share this year on sales of $22.4 billion, but the most management promised in its guidance today was $11 to $12 per share in profit -- and no more than $22.2 billion in sales (and potentially even less).
Between the earnings miss and the weak guidance, it's no wonder investors are upset with Dick's stock today.
Should you buy stock in Dick's Sporting Goods right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
