How Would You Fix Dick's Sporting Goods? Trefis Team Wed, November 11, 2026 at 11:48 AM EST 4 min read DKS -0.90% ^GSPC +1.42% SPGI 0.00% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
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If you own Dick's Sporting Goods (DKS), the company's trouble is how much profit it keeps from each sale, not how much it sells. Sales rose 53.5% over the twelve months to August 1, 2026, with Foot Locker now part of the company. Most of that rise came from adding Foot Locker. In the quarter that ended August 1, 2026, it brought in $1.74 billion of the $5.59 billion in sales.
Yet the stock lost 29.7% over the past year, while the S&P 500 returned 13.1%. Suppose you were handed the keys on Monday. How much would a better margin be worth?
Your First Fix Is Worth $1.54 Billion A Year
You would start with the operating margin. Dick's kept 7.1 cents of operating profit from every dollar of sales over the twelve months to August 1, 2026, against 14.4 cents five years earlier. That older figure is from before Dick's bought Foot Locker, so part of the gap reflects a different mix of businesses. At today's $21.1 billion of sales, that gap is worth about $1.54 billion of operating profit a year. In the year to August 2, 2025, still before Foot Locker, Dick's kept 11.3 cents of each sales dollar.
The latest quarter shows the same slide. On management's adjusted measure, Dick's operating margin was 8.1% in the three months to August 1, 2026, against 13.0% a year earlier, before Foot Locker joined. Your goal on Monday would therefore center on margins before more sales, working to get Dick's back toward what it earned five years ago.
Dick's Core Business Is Still Growing
The DICK'S business, which encompasses everything except Foot Locker, generated $14.1 billion in sales in the year to January 31, 2026, up 5.0% from the year before.
In the quarter that ended August 1, 2026, comparable sales for the segment rose 4.9%. Management said this growth outpaced the broader industry by nearly 200 basis points. The company plans about 14 House of Sport locations for the year, a format management said continues to perform extremely well. This is the part of Dick's that already works.
Management Now Expects Foot Locker To Lose Money
For fiscal 2026, management now expects an operating loss of $40 million to $80 million at Foot Locker, against its earlier forecast of a $110 million to $150 million profit. The split was already evident in the quarter that ended August 1, 2026: on management's adjusted measure, the DICK'S business generated $485.2 million of operating income while Foot Locker lost $31.9 million.
Management said Foot Locker carries greater exposure to older shoe styles that have slowed quickly, and relies more heavily on launch and retro product. The launches that did come out in the quarter performed below industry and internal expectations, management said. At the same time, management said none of this changes its confidence in the long-term opportunity at Foot Locker, noting that the Fast Break stores outperformed the older locations.
What To Keep, And A Hard Call On Cash
You would keep the DICK'S business as it is, along with its ScoreCard loyalty program, which management said connects the company with about 30 million active athletes. That leaves the margin work to Foot Locker, the part of the company that is losing money. Even so, management expects the DICK'S business itself to earn an operating margin of 10.6% to 10.9% for fiscal 2026, below the 14.4 cents of five years ago.
The hard call is cash. Dick's paid $443 million in dividends over the twelve months to August 1, 2026, against $239 million of free cash flow. The company also bought back $185 million of stock. Total debt reached $7.96 billion at the end of that period, against $3.08 billion five years earlier. Lease obligations made up $6.06 billion of the latest figure and $2.64 billion of the older one.
Management expects net capital spending of about $1.4 billion for fiscal 2026. With free cash flow running this thin, you would have to decide what comes first: the capital spending, the payouts or paying down debt.
The market prices Dick's at 15.9 times its earnings over the past twelve months, against 22.3 for the S&P 500. When Dick's next reports, expected in November 2026, Foot Locker's operating result is the number to watch.
Does This Mean You Should Act On DKS?
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