Wells Fargo reduced its price target for Dick’s Sporting Goods to $185 from $240 while maintaining an Overweight rating, citing mounting pressure in the athletic footwear market.
The downgrade follows a sharp 35% weekly plunge in Dick’s stock to $124.31, nearing its 52-week low of $124 and well below its peak of $244.38. The company’s fiscal second-quarter 2026 adjusted earnings of $3.53 per share fell short of the $3.78 estimate, while revenue of $5.59 billion trailed the $5.65 billion forecast.
Dick’s also revised its fiscal 2026 earnings guidance to a range of $11.00 to $12.00 per share, a roughly 20% cut at the midpoint, and reduced its full-year margin outlook by about 50 basis points. Foot Locker, a key banner under Dick’s, saw its revenue and EBIT projections lowered by approximately $200 million each.
Comparable sales at Dick’s core banner rose 4.9%, meeting expectations, but Foot Locker’s same-store sales declined 3.6%, reflecting weaker performance in North America and persistent challenges in Europe, the Middle East, and Africa. Analyst Ike Boruchow of Wells Fargo described the athletic footwear backdrop as "deteriorating further," with the 2027 bull-case earnings scenario now falling below the pre-guidance bear case.
Margin pressure is intensifying due to aggressive promotions, particularly in the third quarter, as Dick’s seeks to capture market share in a competitive retail environment. The stock’s decline underscores broader concerns about discretionary spending and inventory normalization in the sector.
