DICK'S Sporting Goods (DKS) Q2 2026 Earnings Call: Q&A Summary

Q: Simeon Gutman from Morgan Stanley asked what has changed in the last 90 days to cause the revision in guidance.

A: Ed Stack stated that the DICK'S business remains strong with 4.9% comps, but the market has become much more promotional in athletic footwear. He noted that Foot Locker is more impacted by legacy silhouettes and challenges in EMEA.

Q: Simeon Gutman asked if the current footwear and apparel challenges are due to consumer fatigue or supplier inventory clearing.

A: Ed Stack explained that this is a temporary inventory clearing issue rather than a demand problem, noting that new innovation is performing well.

Q: Christopher Horvers from JPMorgan asked if there is a hangover in the footwear cycle due to a lack of newness.

A: Ed Stack replied that the industry is experiencing a hangover now, but new styles are emerging and casual brands like UGG and Birkenstock are performing strongly.

Q: Christopher Horvers asked about the cadence of Foot Locker's top line and margins for the back half of the year.

A: Ed Stack noted that Q3 will be more difficult than Q4. Lauren Hobart added that DICK'S will be more aggressive with margin and SG&A investments in Q3.

Q: Adrienne Yih from Barclays asked if the company can participate in non-athletic trends like UGG and Birkenstock while waiting for the athletic market to recover.

A: Ed Stack confirmed that those businesses are performing very well and help offset the transition in the athletic business.

Q: Adrienne Yih asked if the company is canceling orders for spring buys.

A: Ed Stack stated that the company is not doing anything out of the ordinary regarding order adjustments.

Q: Katharine McShane from Goldman Sachs asked about the performance difference between Fast Break stores and legacy Foot Locker stores.

A: Ed Stack said that Fast Break stores are outperforming and the company expects to have 300 to 350 of these stores by the end of the year.

Q: Katharine McShane asked to quantify the margin impact of EMEA versus the U.S.

A: Ed Stack noted that EMEA is more impactful and promotional than the U.S. market.

Q: Lorraine Maikis from Bank of America asked if there is any self-help to stabilize Foot Locker margins.

A: Ed Stack said the company is participating in price competition rather than leading it. Lauren Hobart added that adding apparel to stores helps, and Nate Gilch noted that brands are providing higher heat product.

Q: Ike Boruchow from Wells Fargo asked for clarity on the Foot Locker profit cut.

A: Ed Stack explained that the profit reduction is driven by marketing investments, such as the COLORS campaign, and increased payroll for store employees.

Q: Michael Lasser from UBS asked if there is an opportunity to rightsizing the Foot Locker organization.

A: Ed Stack confirmed there is an opportunity, and Navdeep Gupta reiterated confidence in achieving $100 million to $125 million in cost synergies.

Q: Ike Boruchow asked for early signals on back-to-school performance.

A: Ed Stack stated that the company does not provide inter-quarter guidance.

Q: Michael Lasser asked about the economics of the business heading into 2027.

A: Lauren Hobart stated there is no 2027 guidance, while Navdeep Gupta noted that the DICK'S Media Network and GameChanger are becoming larger drivers of margin expansion.

Q: Paul Lejuez from Citibank asked how the company will manage SG&A during a challenging market.

A: Ed Stack said it is a good time to invest in marketing while others scale back. Lauren Hobart added that the company is taking a long-term view.

Q: Paul Lejuez asked for the expected SG&A growth for the second half of the year.

A: Navdeep Gupta stated that DICK'S SG&A will deleverage in Q3 and then leverage in Q4.

Q: Robert Drbul from BTIG asked about the performance of the trading card business.

A: Ed Stack described it as a great growth opportunity and noted the company is building Collectors Clubhouse locations.