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DICK'S SPORTING GOODS, INC. (DKS)·Q2 2026 Earnings Summary

Executive Summary

  • Strong Q2: Net sales rose 5.0% to $3.65B with comparable sales +5.0% (average ticket +4.1%, transactions +0.9%), gross margin expanded 33 bps to 37.06%, and non-GAAP EPS was $4.38; GAAP EPS was $4.71 due to non-operating Foot Locker investment gains and acquisition costs .
  • Modest beats vs S&P Global consensus: Revenue $3.65B vs $3.61B* and non-GAAP EPS $4.38 vs $4.30*; both ahead of Street amid broad-based category strength and disciplined promotions .
  • Guidance raised: FY2025 comp sales to 2.0%–3.5% (from 1.0%–3.0%), EPS to $13.90–$14.50 (from $13.80–$14.40), net sales to $13.75–$13.95B; effective tax rate now ~25% (from ~24%) .
  • Catalysts: Anticipated Foot Locker close on Sept 8 with $100–$125M synergy target, accelerated House of Sport/Field House openings in Q3, and scaling GameChanger/retail media network to drive mix and margin .

Values marked with * are from S&P Global consensus via GetEstimates.

What Went Well and What Went Wrong

  • What Went Well

    • Gross margin expansion: +33 bps YoY to 37.06% on higher merchandise margin (+18 bps) and occupancy leverage; non-GAAP EPS edged up to $4.38 despite heightened SG&A investment .
    • Broad-based growth and share gains: Comps +5.0% on both ticket and transactions, with strength across footwear, apparel, team sports, and golf; management highlighted ongoing market share gains vs online-only and omnichannel peers .
    • Strategic pillars executing: Real estate repositioning (House of Sport, Field House), differentiated product access/vertical brands, and a multibillion-dollar e-commerce/app driving outperformance; DMN and GameChanger underpin personalization and monetization .

  • What Went Wrong

    • SG&A deleverage: Non-GAAP SG&A rose 9.9% and deleveraged ~105 bps YoY given elevated investments in digital, stores, and marketing; non-GAAP operating margin contracted YoY to 13.02% .
    • Guidance language on gross margin less explicit: Management now guides to full-year gross margin “up” (prior tone implied ~+75 bps), reflecting balancing tariffs, inventory freshness, and dynamic promo landscape; operating margin still expected ~11.1% at midpoint .
    • Inventory up 7.1% YoY to support growth and launches; while described as “well positioned,” it adds execution risk into back half .

Financial Results

MetricQ2 2025 (Aug 3, 2024)Q1 2026 (May 3, 2025)Q2 2026 (Aug 2, 2025)Q2 2026 Consensus*
Net Sales ($B)$3.47 $3.17 $3.65 $3.61*
Diluted EPS - GAAP ($)$4.37 $3.24 $4.71 —
Diluted EPS - non-GAAP ($)$4.37 $3.37 $4.38 $4.30*
Gross Margin (%)36.73% 36.70% 37.06% —
EBT Margin (%)13.89% 10.95% 13.98% —
EBT Margin - non-GAAP (%)13.89% 11.39% 12.96% —
Comparable Sales (%)4.5% 4.5% 5.0% —

Notes: GAAP to non-GAAP primarily adjusts for Foot Locker investment gains and acquisition-related costs and deferred compensation fair value changes . Values marked with * are from S&P Global consensus via GetEstimates.

KPIs and operating metrics

KPIQ2 2026Prior/Context
Average Ticket (% YoY)+4.1% —
Transactions (% YoY)+0.9% —
Merchandise Margin (bps YoY)+18 bps —
Inventory YoY+7.1% —
Cash & Equivalents$1.231B $1.692B YoY
Total Debt$1.485B —
Share Repurchases (YTD)$299M $164M YoY
Dividend per share (declared)$1.2125 $1.10 prior year
Store Openings (Q2)+1 House of Sport; +4 Field House YTD: +3 HoS; +8 Field House
GameChanger users7.4M unique active users; 5.5M avg MAUs; MAUs +16% YoY; on track for ~50% revenue growth —

Segment breakdown: Not disclosed in the release/8-K.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EPS (non-GAAP)FY2025$13.80–$14.40 $13.90–$14.50 Raised
Comparable SalesFY2025+1.0% to +3.0% +2.0% to +3.5% Raised
Net SalesFY2025$13.6–$13.9B $13.75–$13.95B Raised
Effective Tax RateFY2025~24% ~25% Raised
Operating MarginFY2025~11.1% (reiterated) ~11.1% (midpoint); +10 bps at high end Maintained
Pre-opening ExpensesFY2025$65–$75M (reiterated) $65–$75M Maintained
Net CapexFY2025~$1.0B ~$1.0B Maintained
Gross CapexFY2025~$1.2B ~$1.2B Maintained
DividendNext payment—$1.2125 declared for Sept 26, 2025 —

Earnings Call Themes & Trends

TopicQ3 2025 (Q-2)Q1 2026 (Q-1)Q2 2026 (Current)Trend
Foot Locker transactionNot discussed in Q3’25 8-K Announced plan to acquire Foot Locker; financing approach outlined All approvals received; close expected Sept 8; synergies $100–$125M reiterated; accretion contingent on consideration mix Building to close
Gross margin outlookExpansion YoY; healthy merchandise margin Gross margin expanded; reaffirmed FY outlook Full-year GM “up”; less explicit vs prior, citing tariffs/inventory/promo balance Cautious tone on specificity
Tariffs/macroListed among risks FY outlook includes tariffs Minimal Q2 impact; small H2 impact embedded in guidance Managed
Real estate strategyRepositioning highlighted Opened 2 HoS and 4 Field House in Q1 Opened 1 HoS/4 Field House; plan 13 HoS/6 Field House openings in Q3 Accelerating
Digital/AI/DMNGameChanger growth noted —Scaling DMN; AI in search, scheduling, RFID; personalization initiatives Increasing
Category performance——Strength across footwear, apparel, team sports, golf; innovation/newness driving demand Broad-based strength

Management Commentary

  • “With Q2 comps at 5%, our momentum continues to build… We remain very enthusiastic about the strategic benefits from the Foot Locker acquisition… anticipate that the deal will close on September 8.” — Ed Stack, Executive Chairman .
  • “Our Q2 comps increased 5.0%, with growth in average ticket and transactions, and we drove second quarter gross margin expansion… We are raising our full year 2025 outlook.” — Lauren Hobart, President & CEO .
  • “Merch margin expanded by 18 bps… drivers include assortment quality, favorable mix, and early benefits from GameChanger and DICK’S Media Network.” — Navdeep Gupta, CFO .
  • “We are not seeing any signs of slowdown with the consumer… growth across footwear, apparel, team sports, and golf.” — Lauren Hobart .
  • “Minimal impact from tariffs in Q2; small impact in the second half contemplated in our outlook.” — Navdeep Gupta .

Q&A Highlights

  • Foot Locker accretion and synergies: Management reiterated $100–$125M synergies and expects accretion depending on stock/cash mix; more details post-close on Sept 8 .
  • Gross margin language: Analysts noted shift from explicit +75 bps to “up”; management emphasized ongoing expansion but balancing tariffs, inventory freshness, and promo dynamics; operating margin still ~11.1% at midpoint .
  • Consumer and promotions: No evidence of consumer slowdown; promotional activity “surgical” with innovation/newness supporting demand; e-commerce grew faster than total company .
  • Category/vertical brands: Strong footwear and apparel, team sports, golf; vertical brands (DSG, CALIA, VRST) performing well with 700–900 bps higher margins than national brands .
  • GameChanger/DMN: 7.4M unique active users; MAUs +16% YoY; on track for ~50% revenue growth; DMN and live youth sports create unique monetization and brand activation opportunities .

Estimates Context

  • Q2 vs consensus: Revenue $3.65B vs $3.61B*; non-GAAP EPS $4.38 vs $4.30*; beats driven by higher merchandise margin, favorable mix, and disciplined pricing offsetting SG&A investments .
  • Guidance raise: FY EPS and comp sales raised; Street likely to lift FY EPS/comp estimates, though higher tax rate (~25% vs ~24% prior) partially offsets; operating margin framework maintained .
  • Back-half cadence: Management expects EPS down YoY in Q3 and up in Q4 as pre-opening costs largely concentrate in Q3 and holiday compares normalize .

Values marked with * are from S&P Global consensus via GetEstimates.

Key Takeaways for Investors

  • Quality beat and raise: Modest top/bottom-line beats with comps breadth and GM expansion underpinning a guidance raise; supports positive estimate revisions despite higher tax rate .
  • Mix and margin engines: Assortment-led merch margin, DMN monetization, and GameChanger scale provide multi-year margin tailwinds, partially offsetting planned SG&A investments .
  • Real estate as growth lever: Accelerated House of Sport/Field House rollout into Q3 should drive traffic, basket, and partner activation benefits near term .
  • Foot Locker catalyst: Deal closing (target Sept 8) is a major narrative pivot; integration and synergy capture will be critical to near-term multiple and FY26 earnings power .
  • Inventory and tariffs manageable: Inventory up 7.1% is purposeful to fuel growth; tariff impact minimal in Q2 and modest in H2 embedded in guidance .
  • Trading lens: Ahead of the FL close and heavy Q3 pre-opening expense load, expect near-term volatility; setup improves into Q4 with planned YoY EPS growth and holiday execution .
  • Medium-term thesis: Category leadership, vertical brands, differentiated omnichannel, and data/AI-driven personalization position DKS to compound comps and sustain double-digit operating margins .

Values marked with * are from S&P Global consensus via GetEstimates.