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DICK'S SPORTING GOODS, INC. (DKS)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 2026 delivered record first-quarter sales with net sales of $3.17B (+5.2% YoY), comps +4.5% (5th straight quarter ≥4%), non-GAAP EPS of $3.37 (vs $3.30 LY), and non-GAAP EBT margin of 11.4% (+5 bps YoY). Gross margin expanded ~41 bps on higher merchandise margins .
  • Results beat S&P Global consensus on EPS ($3.37 vs $3.21*) and revenue ($3.17B vs $3.12B*), driven by higher ticket (+3.7%) and transactions (+0.8%), broad-based category growth, and strong vertical brand mix; tax-rate normalization to ~24% muted GAAP EPS growth YoY (S&P Global).
  • Guidance reaffirmed: FY2025 EPS $13.80–$14.40, comps +1% to +3%, net sales $13.6–$13.9B; management expects ~75 bps gross margin expansion at the midpoint, operating margin ~11.1%, pre-opening $65–$75M, and ~81M diluted shares .
  • Strategic catalyst: announced plan to acquire Foot Locker; expected to close H2’25, with first full-year EPS accretion and $100–$125M medium-term cost synergies; financing via cash and debt as needed; approvals progressed subsequently (post-Q1) .

What Went Well and What Went Wrong

  • What Went Well

    • Broad-based top-line strength: comps +4.5% on higher ticket (+3.7%) and transactions (+0.8%); fifth straight quarter with ≥4% comps .
    • Margin execution: gross margin +41 bps YoY on higher merchandise margins; vertical brands (DSG, Kaliya, Verse) outperformed and carry 700–900 bps higher margins .
    • Strategic growth engines: e-commerce growth outpaced total company; GameChanger scaled to 6.5M unique active users and ~2.2M daily active users (+~28% YoY), supporting DICK’S Media Network monetization .

  • What Went Wrong

    • GAAP EPS optics: higher effective tax rate (24% vs 19.6% LY) reduced GAAP EPS growth despite operational improvement; 2024 benefited from equity award tax effects ($0.19) .
    • SG&A deleverage: non-GAAP SG&A increased 7% and deleveraged ~42 bps as planned investments in digital, stores, and marketing ramped, offset only partially by lower incentive comp .
    • Inventory elevated: inventories +12% YoY (deliberate to drive differentiation and spring sell-through) and will moderate later in the year; no tariff cost impact in Q1, timing risks remain for later quarters .

Financial Results

MetricQ3 2025Q4 2025Q1 2026
Net Sales ($USD Millions)$3,057.2 $3,893.6 $3,174.7
Comparable Sales (%)+4.2% +6.4% (13-wk) +4.5%
Gross Margin (%)35.77% 34.96% 36.70%
EBT Margin (%)9.72% 10.20% 10.95%
Non-GAAP EBT Margin (%)9.72% 10.20% 11.39%
Net Income ($USD Millions)$227.8 $300.0 $264.3
Diluted EPS (GAAP) ($)$2.75 $3.62 $3.24
Non-GAAP Diluted EPS ($)$2.75 $3.62 $3.37

Q1 2026 vs Estimates (S&P Global):

MetricConsensusActualSurprise
Revenue ($USD Millions)$3,120.0*$3,174.7 +$54.7 (+1.8%)*
Primary EPS ($)$3.21*$3.37 +$0.16 (+5.0%)*
EBITDA ($USD Millions)$442.8*$464.0 +$21.2 (+4.8%)*

Values with asterisks (*) retrieved from S&P Global.

KPIs and Other Metrics:

KPIQ1 2026Prior Year / Notes
Avg Ticket Growth (%)+3.7% –
Transactions Growth (%)+0.8% –
E-commerceOutpaced total company growth –
GameChanger Users6.5M unique; ~2.2M daily active (+~28% YoY) –
Inventory ($B)$3.57 (+12% YoY) $3.20 LY
Cash & Equivalents ($B)$1.04 $1.65 LY
Total Debt ($B)$1.48 $1.48 LY
Share Repurchases$299M; 1.4M shrs @ $218.65 $114M LY
Dividend$1.2125/qtr declared (paid 6/27/25) $1.10/qtr LY
Gross Capex / Net Capex$265M / $242M $158M / $126M LY

Guidance Changes

MetricPeriodPrevious Guidance (Q4 2025)Current Guidance (Q1 2026)Change
EPS (Diluted)FY2025$13.80–$14.40 $13.80–$14.40 Maintained
Net Sales ($B)FY2025$13.6–$13.9 $13.6–$13.9 Maintained
Comparable Sales (%)FY2025+1.0% to +3.0% +1.0% to +3.0% Maintained
Gross MarginFY2025“Improved” (qualitative) ~+75 bps at midpoint Clarified ↑
Operating MarginFY2025—~11.1% midpoint; potential +10 bps at high end New detail
Pre-opening Expenses ($M)FY2025—$65–$75; ~1/3 in 1H New detail
Effective Tax RateFY2025~24% ~24% Maintained
Diluted Shares (Avg)FY2025~82M ~81M Lower
Capex ($B)FY2025~$1.2 gross / ~$1.0 net ~$1.2 gross / ~$1.0 net Maintained
DividendOngoing$1.2125 qtr declared 3/10/25 $1.2125 qtr declared 5/27/25 Maintained

Note: Outlook excludes acquisition-related items and results from the planned Foot Locker acquisition .

Earnings Call Themes & Trends

TopicQ-2 (Q3 2025)Q-1 (Q4 2025)Q1 2026 (Current)Trend
Foot Locker acquisition——Plan announced; accretive in first full year; $100–$125M cost synergies; close H2’25 pending approvals New; integration focus ahead
Tariffs / MacroRisk disclosures ongoing 2025 outlook acknowledged dynamic macro Guidance includes all current tariffs; no Q1 tariff impact; mitigation with partners More explicit; monitored
Real estate formatsStore growth / sq. ft. details Aggressive HOS/Field House plans for 2025 Opened 2 HOS & 4 Field House in Q1; ~16 each planned in 2025 Accelerating
Digital & Media—Investing to accelerate e-commerce E-comm outpaced total; GameChanger +28% DAUs; Media Network scaling Scaling
Category / productStrong back-to-school; share gains Footwear focus in 2025 Strength in footwear, apparel, team sports; strong launches; Nike segmentation Broad-based
InventoryInventories +13% YoY Inventories +18% YoY Inventories +12% YoY; deliberate; moderating later Elevated but disciplined

Management Commentary

  • “By bringing our two great brands together, we see the opportunity to create a global leader in the sports retail industry… serving a broader set of athletes.” — Ed Stack, Executive Chairman .
  • “Our Q1 comps increased 4.5%… fifth straight quarter with comps over 4.0%. Our first quarter gross margin expanded and we delivered non-GAAP EPS ahead of the prior year. We are reaffirming our 2025 outlook…” — Lauren Hobart, CEO .
  • “These strong comps were driven by a 3.7% increase in average tickets and a 0.8% increase in transactions… Gross profit… increased 41 basis points from last year. This increase was driven by higher merchandise margins.” — Navdeep Gupta, CFO .
  • “We continue to expect gross margins to improve by approximately 75 basis points at the midpoint… Operating margin ~11.1% at the midpoint.” — CFO .

Q&A Highlights

  • Foot Locker rationale and synergy: management emphasized global reach, strengthening brand relationships, operational efficiencies, and $100–$125M medium-term cost synergies; targeted to be EPS accretive in the first full fiscal year post-close .
  • Regulatory cadence / divestiture threshold: FTC/regulatory approvals expected H2’25; merger docs include ~$100M divestiture threshold to preserve strategy focus .
  • Tariff strategy: no Q1 impact; guidance incorporates known tariffs; dynamic SKU-level pricing capability and partner collaboration to mitigate .
  • Nike partnership: continued strong strategic relationship, market segmentation to limit overlap, product innovation across running, lifestyle, and women’s basketball .
  • Margin drivers: higher merchandise margin, pricing/promo optimization, vertical brands’ 700–900 bps margin premium; GameChanger and Media Network add incremental mix benefit over time .
  • Capital returns: $298.7M buybacks in Q1; future buybacks to be “nimble” given S-4/transaction constraints .

Estimates Context

  • Q1 2026 beats: EPS $3.37 vs $3.21*; revenue $3.17B vs $3.12B*; EBITDA $464.0M vs $442.8M* (S&P Global). Non-GAAP operational beat reflects merchandise margin improvement and mix benefits; GAAP EPS optics impacted by tax-rate normalization .
  • Forward setup: Management expects comps closer to the high end through Q3 and ~75 bps GM expansion at the midpoint, but SG&A deleverage heavier in 1H moderates in 2H; FY EPS $13.80–$14.40 maintained . This suggests near-term estimate bias modestly upward on sales/margin trajectory with full-year EPS range intact.

Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Durable top-line with quality: five straight quarters ≥4% comps, with growth from both ticket and traffic, and broad category strength (footwear, apparel, team sports) .
  • Margin mix lever: merchandise margin expansion, vertical brands’ higher margin contribution, plus scaling digital media/youth-sports ecosystems underpin gross margin resiliency despite macro/tariff noise .
  • Investment year optics: intentional SG&A investments will deleverage 1H but moderate in 2H; FY operating margin ~11.1% midpoint maintained .
  • Capital returns and balance sheet: robust buybacks ($299M), dividend maintained, ~$1.0B net capex focused on high-ROI formats (House of Sport, Field House) .
  • Foot Locker deal is the narrative swing factor: expected EPS accretion in first full year, medium-term cost synergies, and global reach expansion; integration and execution to drive re-rating potential .
  • Near-term trading: positive reaction drivers include beat vs consensus, reaffirmed outlook, and category momentum; watch for tariff flow-through timing and SG&A pacing updates next quarter .
  • Medium-term thesis: structural advantages in assortment/access, experiential formats, and data/media monetization (GameChanger/DMN) support sustained share gains and margin durability .