Dick's Sporting Goods FY2026 Q2 Earnings: The First Full Foot Locker Quarter After a $2.5B Deal

On August 1, 2026, DICK'S Sporting Goods closed the books on fiscal 2026's second quarter — the first full quarter that consolidates Foot Locker after the $2.5 billion acquisition closed on September 8, 2025. Consolidated net sales printed $5,587 million, up 53% from the prior-year quarter's Dick's-standalone $3,647 million. Net income fell to $315 million from $381 million (−17%), and diluted EPS compressed to $3.50 from $4.71 (−26%) on deal dilution of roughly 9.6 million shares. Under the hood, the DICK'S Business delivered +4.9% comps with World Cup lift while Foot Locker's pro forma comps ran −3.6%. The ledger's goodwill and intangibles — $837M and $763M at quarter-end — are the balance-sheet fingerprint of that perimeter change.

The Headline Numbers​

DICK'S fiscal year ends on the Saturday closest to January 31. Q2 FY2026 covers May 3 through August 1, 2026. Prior-year sales in the table are Dick's standalone; the +53% sales print is mostly acquisition perimeter, not organic growth. Every dollar below matches the income-statement fence and the 8-K / 10-Q package.

Combined gross margin for the quarter is $1,943M / $5,587M ≈ 34.8%. Operating margin sits near 7.9% ($441M / $5,587M); net margin near 5.6% ($315M / $5,587M). The income statement is larger and messier than a year ago: sales jumped by more than half while earnings and EPS moved the other way. That is the classic post-deal print — perimeter expansion first, earnings dilution second — and it is exactly what the share count and the goodwill pad were built to show.

Read the YoY sales column with discipline. Comparing $5.6B of combined sales to $3.6B of Dick's-only sales does not measure same-store demand. The organic signal lives in the two comps lines: DICK'S Business +4.9%, Foot Locker pro forma −3.6%. One franchise is taking share in a World Cup year; the other is fighting a promotional athletic-footwear market. Consolidated EPS is the weighted average of those two stories plus roughly 9.6 million dilutive shares from the deal.

Revenue Deep Dive: Two Businesses, One Perimeter​

Management reports the combined company with a clear split between the DICK'S Business and the Foot Locker Business. That split is the thesis: can a specialty sporting-goods operator with strong category breadth absorb a global athletic specialty retailer whose comps are underwater in the current footwear cycle?

DICK'S Business. The release is explicit about what drove the core: "DICK’S Business delivered 4.9% comp sales growth, driven by broad-based growth across categories, including strong results from the 2026 FIFA World Cup, and growth in average ticket and transactions." That is volume and ticket together — not a one-category spike dressed up as momentum. Management framed the same print as share gains under pressure: "We're proud of our second quarter performance in the DICK'S Business, where we delivered comp sales growth of 4.9% and gained market share despite growing pressure across portions of the athletic footwear and apparel marketplace." The ledger's Income:Revenue line (−5,587 MUSD) is the consolidated top line; the +4.9% comps line is the part of that top line that is not Foot Locker perimeter.

Foot Locker Business. The other half of the story is less kind: "Proforma comps for the Foot Locker Business declined 3.6%, impacted by challenging conditions in the athletic footwear marketplace." Management went further on promotions as the quarter progressed: "As the quarter progressed, conditions across portions of the athletic footwear and apparel marketplace became increasingly promotional… This environment had a more significant impact on the Foot Locker Business given its greater exposure to legacy footwear silhouettes." That sentence is load-bearing. It says the promotional intensity is industry-wide, but the mix exposure is Foot Locker's — legacy silhouettes, not the broader sporting-goods assortment that carried DICK'S comps.

Management signal scan. Classic seven-theme "demand exceeds supply" language is not present in the release. There is no claim that demand outpaces supply, that the industry is in a multiyear upcycle, that new markets are ahead of plan, that product ramps beat forecast, that ASPs are rising sustainably, that supply is tight, or that demand is "robust" in the boilerplate sense. The closest demand language is the World Cup callout inside the DICK'S Business comps explanation — event-driven category strength, not a supply-constrained franchise. Absence is a finding: this is a share-and-mix story under promotional pressure, not a sold-out cycle narrative.

IEEPA tariff refunds appear in corporate/other gross profit per the release. Mention them as a corporate noise line, not the core plot. The plot is acquisition perimeter plus a split athletic-footwear market.

The Margin Story​

The quarter's combined gross profit of $1,943M on $5,587M sales implies roughly 34.8% gross margin. That is a blended retail margin for a company that now carries Foot Locker's footwear-heavy mix alongside DICK'S broader sporting-goods assortment. Cost of revenue in the fence is 3,644 MUSD; SG&A is 1,447 MUSD; other net 58 MUSD; tax 123 MUSD. Operating income of $441M leaves room for the deal's amortization, integration costs, and the promotional intensity management described on the Foot Locker side.

Pricing language in the release is promotional, not aspirational. Management does not claim sustained ASP increases or pricing momentum. The opposite: athletic footwear and apparel became "increasingly promotional" as the quarter progressed, with Foot Locker hit harder because of legacy silhouette exposure. That ties directly to margin quality — promotions bleed through cost of goods and markdowns long before they show up as a clean "price vs. volume" split in the fence. Tariff refunds in corporate/other gross profit can lift a blended print without proving pricing power in either operating business.

Net income down 17% while sales are up 53% is the mechanical consequence of (1) consolidating a business whose comps are negative, (2) deal-related amortization and charges, and (3) a larger share count. Diluted EPS at $3.50 versus $4.71 (−26%) embeds the ~9.6 million dilutive shares from the Foot Locker transaction. EPS is the cleanest way to see that the market is being asked to underwrite a larger, more complex retailer before the earnings power of the combined entity has caught up to the sales power.

The $2.5 Billion Question: Can DICK'S Fix Foot Locker Before Dilution Compounds?​

The defining issue of the quarter is not whether the DICK'S Business can grow. It already did — +4.9% comps with World Cup lift and stated share gains. The question is whether the Foot Locker perimeter can be stabilized and then improved before promotional footwear, integration cost, and share dilution permanently reprice the equity story.

Pre-deal goodwill sat near $246M. At FY2025 year-end (January 31, 2026) — the first year-end after closing — goodwill was $864M and intangibles $769M. By August 1, 2026 those balances assert to $837M and $763M. The step-up from ~$246M to the post-deal hundreds of millions is the purchase-price allocation in one line. The modest decline from YE to Q2 is amortization and purchase-accounting true-ups, not a thesis change — but it is the number investors should watch if unproductive-asset charges accelerate.

Management has flagged up to $750 million of unproductive-asset charges related to the combination, with $125.8 million already taken year-to-date on a pre-tax basis. That is the bear case written into the P&L: cleaning Foot Locker's store base and inventory will cost real dollars before the comps line can turn. The bull case is the mirror image — DICK'S proved in Q2 that its own assortment and event calendar can take share even when portions of athletic footwear are promotional; if that operating system transfers, Foot Locker's −3.6% is a temporary mix problem, not a permanent impairment of the $800M+ goodwill pad.

Tracking a $5.6B Quarter in Plain Text​

Modeling a multi-banner retailer in Beancount clarifies what a press-release table often obscures: every dollar of sales, cost, tax, and net income must reconcile, and the balance-sheet pads that carry goodwill and inventory cannot drift from the 10-Q. This is how we model every company in the Open Ledger corpus — double-entry forces the acquisition story to stay honest.

Income accounts are credits (negative); expense accounts are debits (positive). The Q2 income statement from the ledger sums to zero:

; Check: −5587 + 3644 + 0 + 1447 + 58 + 123 + 315 = 0 ✓
 
2026-08-01 * "DICK'S Sporting Goods, Inc." "FY2026Q2 Income Statement"
  Income:Revenue                         -5587 MUSD
  Expenses:CostOfRevenue                   3644 MUSD
  Expenses:ResearchAndDevelopment          0 MUSD  ; not separately reported
  Expenses:SellingGeneralAdministrative    1447 MUSD
  Expenses:OtherNet                      58 MUSD
  Expenses:IncomeTax                       123 MUSD
  Equity:Adjustments                      315 MUSD  ; net income offset (RE set by balance assertion)

The balance-sheet number that tells the narrative is goodwill — and the intangibles pad beside it. Pre-deal goodwill was roughly $246M. FY2025 year-end (first post-deal year-end) and Q2 FY2026 assert as follows:

; FY2025 year-end — first balance sheet after Foot Locker close (2026-01-31)
2026-01-30 pad Assets:NonCurrent:Goodwill                       Equity:Adjustments
2026-01-31 balance Assets:NonCurrent:Goodwill                         864 MUSD  ; Goodwill 864
 
2026-01-30 pad Assets:NonCurrent:IntangibleAssets               Equity:Adjustments
2026-01-31 balance Assets:NonCurrent:IntangibleAssets                 769 MUSD  ; Intangibles 769
 
; Q2 FY2026 — first full Foot Locker quarter (2026-08-01)
2026-07-31 pad Assets:NonCurrent:Goodwill                       Equity:Adjustments
2026-08-01 balance Assets:NonCurrent:Goodwill                         837 MUSD  ; Goodwill 837
 
2026-07-31 pad Assets:NonCurrent:IntangibleAssets               Equity:Adjustments
2026-08-01 balance Assets:NonCurrent:IntangibleAssets                 763 MUSD  ; Intangibles 763

That is the acquisition in four lines: goodwill stepped from ~$246M to $864M at the first post-deal year-end, then to $837M at the first full combined quarter; intangibles moved from $769M to $763M over the same window. Inventories at $5,565M on August 1 are the working-capital footprint of a retailer that now stocks both banners. Five-plus years of Dick's financial history — through the first post-deal annual and this Q2 — sit in the open ledger below.

The Multi-Year Arc: From Standalone Specialty to Combined Athletic Retailer​

Annual revenue and net income from the ledger (amounts in millions of USD). FY2021–FY2024 are Dick's standalone; FY2025 is the first year-end after the Foot Locker close.

The compounding story is discontinuous by design. Through FY2024, Dick's was a mid-teens-billion specialty retailer earning roughly $1.0–1.5B of annual net income. FY2025 breaks the series: sales jump to $17.2B as Foot Locker enters the perimeter, while net income falls to $849M — deal costs, amortization, and a tougher athletic-footwear backdrop showing up before synergies. Q2 FY2026 continues that pattern at quarterly scale: $5.6B of sales, $315M of net income, and EPS still below the prior-year Dick's-only print.

Goodwill is the multi-year balance-sheet twin of that sales step-up. A company that carried ~$246M of goodwill pre-deal now carries $837M at the first full combined quarter — with up to $750M of unproductive-asset charges still contemplated against the integration. The multi-year arc is therefore not a smooth EPS compounder; it is a capital-allocation experiment whose scoreboard is Foot Locker comps, charge cadence, and whether DICK'S +4.9% operating DNA transfers.

The Verdict: Bull vs. Bear​

Bull Case:

• DICK'S Business comps +4.9% with broad-based category growth, average ticket and transactions both up — organic strength, not just perimeter math
• Explicit World Cup contribution and management's claim of market share gains despite promotional pressure in athletic footwear and apparel
• Long-term opportunity to apply DICK'S assortment, private brand, and omnichannel playbook to Foot Locker's global athletic specialty footprint
• Combined sales scale ($5.6B in a single quarter; $17.2B in FY2025) creates buying power and sponsor relevance that neither banner had alone
• Gross profit of $1,943M (~34.8% combined) leaves a workable retail margin base if promotional intensity eases and unproductive inventory is cleared

Bear Case:

• Foot Locker pro forma comps −3.6% with management citing greater exposure to legacy footwear silhouettes in an increasingly promotional market — the acquired banner is still shrinking
• Diluted EPS $3.50 vs $4.71 (−26%) on ~9.6M deal shares — shareholders are paying for scale before earnings catch up
• Promotional athletic footwear/apparel conditions intensified as the quarter progressed; the release does not support a "demand exceeds supply" or pricing-power narrative
• Up to $750M of unproductive-asset charges contemplated, with $125.8M already taken YTD pre-tax — integration cash and P&L drag are not theoretical
• Goodwill/intangibles at $837M / $763M remain large relative to pre-deal goodwill (~$246M); further charges or soft Foot Locker comps would pressure that pad

Our Take: Q2 FY2026 is the cleanest view yet of the combined company, and it splits neatly. The DICK'S Business is doing what a good specialty operator should do in a World Cup year: grow comps, grow ticket, take share. Foot Locker is doing what a footwear specialty chain does when legacy silhouettes go promotional: negative pro forma comps and a heavier need for clearance and store rationalization. The +53% sales headline is mostly the $2.5B perimeter; the −26% EPS headline is the bill for that perimeter. Until Foot Locker's comps stabilize and the unproductive-asset charge program stops expanding, this remains an execution story measured in goodwill, inventories, and two comps lines — not a blended growth stock. The Open Ledger above is the scoreboard: when Foot Locker's contribution stops diluting the fence's net-income offset, the thesis will show up in plain text.