DICK'S Sporting Goods (NYSE: DKS) is down about 25% to around $134 — its worst single-session percentage loss on record and a two-year low, as reported by Schaeffer's Research. The trigger was this morning's Q2 report. But the quarter isn't what did the damage.

Why it moved

The quarter was a small miss. Net sales came in at $5.587 billion, up 53.2% year-on-year, against roughly $5.65 billion expected. Adjusted EPS was $3.53 versus a $3.78 consensus. A 25-cent miss does not take a quarter off a company's market value.

The guidance did. DICK'S cut full-year adjusted EPS to $11.00–$12.00 from $13.50–$14.50. The street sat near $14.20. That's about 19% below where analysts were, at the midpoint.

And it comes down to one line in the segment outlook. The Foot Locker business was guided to $110–150 million of operating profit for this year. It is now guided to an operating loss of $40–80 million. That's roughly a $190 million swing in a single update. Q2 alone already carried a $31.9 million Foot Locker segment operating loss.

Here's the tell: full-year sales guidance was left unchanged at $21.9–22.2 billion. Shoppers are still showing up. The money is leaking on the way to the bottom line — non-GAAP gross margin fell about 300 basis points to 34.06%, and operating margin dropped to 7.9% from 12.4% a year ago.

The mechanism most headlines skip

Executive Chairman Ed Stack named it on the call: "What changed is a number of brands got very promotional on their sites, and those promotions spilled into the broader marketplace." He added that they expect it "to, unfortunately, continue through the balance of the year."

Unpack that. Foot Locker is a multi-brand store — it sells other people's sneakers. When Nike or another brand runs a sale on its own website, Foot Locker has to match that price or watch the customer buy direct. It doesn't control the price of the thing it sells. Its own stores can be full and it still bleeds margin. Stack was blunt about the inventory behind it too: on older sneaker models, "we have the hangover right now."

The business

Two reporting segments, and they are not having the same year:

• DICK'S Business — 892 stores (DICK'S, House of Sport, Field House, Golf Galaxy, Public Lands, Going Going Gone!). Comparable sales +4.9%. Segment profit guidance of $1.54–1.60 billion was maintained.
• Foot Locker Business — 2,478 stores (Foot Locker, Kids Foot Locker, Champs Sports, WSS, atmos), bought for $2.4 billion and closed 8 September 2025, with 9.6 million new shares issued. Pro-forma comps −3.6%.

So the core chain is growing and profitable. The deal is what broke. That distinction is the whole story, and it's why this is an acquisition problem, not a consumer-spending problem.

Is it expensive?

Market cap is now roughly $11.7 billion. On trailing EPS of $9.35 (StockAnalysis), the stock is around 14x trailing earnings at $134 — and about 11–12x the new $11–$12 guide. The $5.00 annual dividend works out near a 3.7% yield here.

In absolute terms that is not a rich multiple. The catch is that cheap-against-a-number only helps if the number holds, and this one just fell 19% in a morning. For context, Academy Sports (ASO) — a $2.8 billion sporting-goods retailer with no integration to fix — trades near 7.9x trailing and 6.8x forward, cheaper than DKS even after today. Nike (NKE), at $58.6 billion, sits at about 19.4x. DKS is priced between a wounded brand and a cheaper pure-play retailer, which is roughly where a retailer carrying a loss-making acquisition belongs.

Who it touches

• The brands sold through this channel: Nike −3.1%, Lululemon −4.2%, Deckers −3.8%. Stack's promotional warning is a read on their pricing power, not just his margins.
• Rival retailers: Academy Sports −3.3%, Target −3.8% — same discounting weather, different roofs.
• Analysts: JPMorgan cut its price target from $270 to $245, citing steeper-than-expected near-term earnings pressure.
• Short sellers: 7.48 million shares were short going in — 11.88% of float, roughly six days of average volume.
• India read-through: no Indian stock moved on this. But the squeeze — a brand discounting direct and thinning the multi-brand store that carries it — is the same tension building behind the DTC push at Bata India, Metro Brands and Relaxo. The question to carry over is simple: who owns the price?

What to watch

Two things decide whether this was an overreaction. First, Q3 Foot Locker comps: the segment is guided to −2.0% to 0.0% for the year against −3.6% pro-forma in Q2, so the company is assuming it gets less bad from here. Second, whether brand-site discounting actually eases — Stack said it won't before year-end, and he's the one who has to sell into it.

The risk that flips this the other way is the mirror image: if the promotional wave breaks earlier than management assumed, a $1.5 billion-plus profit engine at the DICK'S banner is still intact underneath, and the Foot Locker loss is a guide, not a result. Today's RSI of 19 says positioning is already stretched one way.

As of 11:35 am ET, 25 Aug 2026. Sources: [DICK'S Q2 press release](https://www.prnewswire.com/news-releases/dicks-sporting-goods-inc-reports-second-quarter-results-302859323.html), [Schaeffer's Research](https://www.schaeffersresearch.com/content/news/2026/08/25/dicks-sporting-goods-stock-on-track-for-worst-day-ever), [Investing.com](https://www.investing.com/news/stock-market-news/why-is-dicks-sporting-goods-stock-plunging-today-93CH-4875110), [StockAnalysis](https://stockanalysis.com/stocks/dks/). For discussion and education only — not investment advice. Verify before acting.