A major sportswear retailer is reshaping its store footprint as it integrates a recently acquired business, and the results suggest the strategy is coming at a much higher price than the company and investors expected.
The retailer has been closing locations, reviewing underperforming assets, and taking hundreds of millions of dollars in related charges. Now, a sharp earnings miss and a lowered outlook have sent its stock tumbling in one of the most dramatic trading sessions in its history.
Founded in 1948, Dick’s Sporting Goods is one of the largest sports-goods retailers in the U.S., selling sports equipment, clothing, and footwear through a portfolio of brands and retail concepts.
The company operates under multiple banners, including Dick’s Sporting Goods, Golf Galaxy, Public Lands, Going Going Gone!, Dick’s House of Sport, Golf Galaxy Performance Center, Foot Locker, Kids Foot Locker, Champs Sports, WSS, and atmos. It also operates GameChanger, a sports technology platform.
Dick’s Sporting Goods closes 113 stores in 2026
Dick’s Sporting Goods (DKS) has closed 113 stores across its portfolio during fiscal 2026 through the second quarter, according to the company’s second-quarter earnings release.
The closures include three locations within the broader Dick’s business and 110 locations within the Foot Locker business.
The company also opened stores during the period. Within its Dick’s business, it opened four new locations, while the Foot Locker business opened 27 stores.
As of Aug. 1, 2026, Dick’s Sporting Goods operated 3,104 store locations across its Dick’s and Foot Locker businesses.
The store closures were concentrated heavily within the Foot Locker business, reflecting the company’s effort to reposition the portfolio following its acquisition of the footwear retailer.
Why Dick’s Sporting Goods is closing stores
Dick’s Sporting Goods acquired Foot Locker in September 2025 in a $2.5 billion transaction. The deal brought Foot Locker’s global footwear and apparel business into Dick’s Sporting Goods’ portfolio and expanded the company’s international retail presence.
Following the acquisition, Dick’s Sporting Goods began reviewing what it calls “unproductive assets.” The review includes optimizing inventory, closing underperforming stores, and right-sizing assets that do not fit the company’s long-term strategy for the Foot Locker business.
Of the Foot Locker business’s fiscal 2026 closures, 67 stores were identified as part of that review of unproductive assets. The company also relocated or remodeled 41 stores during the year as it works to reposition its store portfolio.
The restructuring has come with substantial costs.
Dick’s Sporting Goods incurred $125.8 million in pre-tax charges during the 26 weeks ended Aug. 1, 2026, bringing total charges related to the effort to $515.8 million to date. The company expects total pre-tax charges of up to $750 million, including approximately $200 million in fiscal 2026, with the remainder expected over the medium term.
Dick’s Sporting Goods reports weaker-than-expected results
The store changes come as the retailer confronts a more difficult environment for athletic footwear and apparel.
During the second quarter of fiscal 2026, Dick’s Sporting Goods reported:
- Net sales: Increased 53.2% year over year to $5.59 billion
- Net income: Declined 17.3%
- Dick’s comparable sales: Climbed 4.9%
- Foot Locker comparable sales: Fell 3.6%
- Earnings per diluted share: $3.53 adjusted, below the $3.76 expected
The sharp increase in consolidated sales was largely driven by the inclusion of Foot Locker following the acquisition. At the same time, the Foot Locker business continued to struggle, with comparable sales declining 3.6% during the quarter.
The weaker-than-expected performance prompted Dick’s Sporting Goods to lower its full-year outlook.
The company now expects adjusted diluted earnings per share of $10.94 to $11.94 for fiscal 2026, down from the previous forecast of $13.50 to $14.50. It also lowered its full-year net sales outlook to $21.9 billion to $22.2 billion, compared with its previous range of $22.1 billion to $22.4 billion.
Dick’s Sporting Goods stock suffers record decline
Investors responded sharply to the weaker results and reduced outlook.
Shares of Dick’s Sporting Goods fell more than 30% on Aug. 25, marking the company’s worst single-day stock decline on record, according to CNBC. The sell-off followed the earnings release and guidance reduction, rather than being directly attributed to the store closures alone.
The Foot Locker results also highlighted ongoing challenges in the recently acquired business, as Dick’s Sporting Goods said certain legacy footwear silhouettes and apparel franchises are no longer resonating with consumers like they once did.
The company also said that elevated inventory levels across the industry and the broader retail marketplace have contributed to a more promotional environment. Dick’s Sporting Goods said it believes maintaining competitive pricing is important to protect its market position.
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What this means for Dick’s Sporting Goods
Dick’s Sporting Goods said its core Dick’s business will continue focusing on store growth, relocations, improvements to its existing locations, technology, and supply-chain investments.
For the Foot Locker business, the company plans to continue investing in its store fleet through its Fast Break initiative while supporting the business’s long-term turnaround.
Here’s some of my previous coverage of store closures:
- Sportswear giant continues store closures nationwide
- Sportswear giant ends 10-year partnership amid store closures
- Global sportswear brand closing 15 stores, laying off workers
The company acknowledged that the retail environment remains challenging and expects a more promotional environment through the remainder of fiscal 2026.
“While those dynamics are creating near-term challenges, our confidence in the Dick’s business and the long-term opportunity at Foot Locker remains unchanged,” Dick’s Sporting Goods CFO Navdeep Gupta said during the company’s earnings call.
For now, the retailer is pursuing two very different strategies within its portfolio: continuing to expand and improve its core Dick’s business while closing, remodeling, and repositioning parts of the newly acquired Foot Locker business.
That strategy is designed to create a stronger store portfolio over time, but the latest earnings report shows investors are increasingly focused on how long that turnaround will take and how much it will cost along the way.
Related: Sportswear giant continues store closures nationwide