Aug 25, 2026 earnings call — Foot Locker turnaround and updated 2026 outlook
Company cut consolidated full-year non-GAAP EPS guidance to $11 to $12.
Revenue $5.6B (est $5.6B) · EPS $3.53 (est $3.74)
Key quotes
"In addition, the Foot Locker business in EMEA has been more challenging than expected."
"As demand continued to shift during the quarter, inventory built up in parts of the industry, particularly within certain legacy footwear silhouettes and apparel franchises that simply aren't resonating the way they once did."
"We are also making deliberate investments in price to protect and grow our leadership position."
Analyst Q&A 9
why guidance changed and footwear/apparel issues
Q (Simeon Gutman · Morgan Stanley): He asked what changed since 90 days ago when they raised guidance and why the business now looks worse. He also asked whether the footwear and apparel weakness is demand fatigue or brands clearing old inventory.
A: DICK'S comps were 4.9% and they did not cut DICK'S sales expectations, but they expect margin pressure because many brands became promotional and promotions spilled into the broader market. Foot Locker is more exposed because it relies heavily on footwear and some launch product disappointed, and EMEA is worse than the U.S. because it is more promotional and competitive.
"But on the DICK'S side, we've got a very broad category portfolio, and DICK'S is not nearly as reliant on the footwear business as Foot Locker is." — Edward Stack (CHAIR)
footwear cycle and Q3 vs Q4 pressure
Q (Christopher Horvers · JPMorgan): He asked whether the footwear slowdown is a hangover from big trends or a short-term supplier clearing, and whether that reduces traffic to DICK'S. He also asked how deep Q3 margin pressure will be versus Q4 for Foot Locker and the top-line cadence.
A: They said the hangover is happening now as legacy silhouettes slowed, but new styles across brands are coming and some categories are doing well. They expect Q3 to be more difficult than Q4 but would not give Q4 guidance, and they said DICK'S will invest more in Q3 than Q4 on margin and SG&A.
"I do think, as Ed said, that is not the issue because the running category in itself and all performance is doing really well." — Lauren Hobart (CEO)
Fast Break stores vs legacy stores; store count
Q (Katharine McShane · Goldman Sachs): She asked how Fast Break stores performed versus legacy Foot Locker stores and how the new assortments that started in August were received. She also asked for the final number of Fast Break stores by year-end and how much EMEA is driving margin pain.
A: They said Fast Break stores have outperformed legacy stores but still include some legacy silhouettes and need more new assortment. They will keep investing in Fast Break and expect the number to be north of 300, 350 stores globally by year-end. They would not give a specific split, but said EMEA is much more impactful and promotional than the U.S.
"So the Fast Break stores have definitely outperformed the traditional legacy stores." — Edward Stack (CHAIR)
shift to nonathletic trends and order actions
Q (Adrienne Yih-Tennant · Barclays): She asked if consumers are shifting to nonathletic shoes like UGG and Birkenstock and how DICK'S can participate more. She also asked if they are canceling or changing spring orders given brand comments about next-year newness.
A: They said athletic performance remains healthy while lifestyle shoes are more pressured, and brands are bringing more lifestyle and modified legacy shoes that should help. They are participating strongly in UGG and Birkenstock, expect DICK'S footwear to comp positively in the back half though with margin pressure, and they are only modifying some orders in the normal course.
"So especially on the DICK'S side, we think the footwear business is going to really -- is going to comp positively in the back half of the year on the DICK'S side, although there will be some margin pressure." — Edward Stack (CHAIR)
can Foot Locker stabilize margins now?
Q (Lorraine Maikis · BofA): She asked whether Foot Locker can take self-help actions to stabilize margins while comps are weak. She wanted to know what they can do internally.
A: They said there is limited self-help because they must follow market prices and will be competitively priced where needed, but they are not leading the price erosion. They also said bringing apparel into Foot Locker and getting higher-heat product allocations will help offset some margin pressure.
"But in the marketplace, if a shoe is at a certain price in the marketplace, then we feel we need to be competitively priced." — Edward Stack (CHAIR)
back-to-school and profit cut drivers
Q (Irwin Boruchow · Wells Fargo): He asked for early signals on back-to-school at Foot Locker and DICK'S. He also asked why a $200 million revenue cut translated into a $200 million profit cut and for clarity on gross margin expectations.
A: They said the profitability cut comes from lower sales, margin changes and intentional marketing investments to rebuild Foot Locker's brand. They are spending on a new out-of-home campaign called Colors and increasing Stripers payroll as long-term investments, and they will not give intra-quarter back-to-school commentary because it is embedded in full-year guidance.
"The new marketing campaign that we put out recently called Colors, which kind of takes a journey of sneaker culture from the beginning to where it is today, has gotten great response." — Edward Stack (CHAIR)
2027 outlook and Foot Locker options
Q (Michael Lasser · UBS): He asked how the company's economics look into 2027 given lapping events and what conditions would prompt monetizing or rightsizing Foot Locker.
A: They would not give 2027 guidance, but said Q2 DICK'S comp of 4.9% included the World Cup and they still saw portfolio growth. They said new capabilities like DICK'S Media Network and GameChanger helped merch margin (about 150 basis points in Q2), and when asked about Foot Locker options they said yes to exploring actions while reiterating confidence in synergies of $100 million to $125 million.
"Michael, I'll build on what Ed said, that we reiterated our confidence in terms of the synergies of $100 million to $125 million, and that's the bigger part of the rubric as well that we all feel confident about." — Navdeep Gupta (CFO)
SG&A plans and Foot Locker investments
Q (Paul Lejuez · Citibank): He asked how they will manage SG&A in a tougher athletic market and what SG&A growth to expect in H2 and into next year. He also asked about the timing of Foot Locker marketing investments.
A: They said now is the right time to invest in Foot Locker marketing to gain market share while others pull back, and they will continue long-term SG&A investments in tech, GameChanger and the DICK'S Media Network. They expect DICK'S SG&A to deleverage for the full year with the highest pressure in Q3, and they called out about 50 basis points of pressure in the second half before SG&A starts to leverage after lapping investments.
"So on our DICK'S side, we expect the SG&A to deleverage for the full year with the highest pressure in the third quarter, and I called it out in my prepared comments that the pressure in the second half will be to the tune of about 50 basis points." — Navdeep Gupta (CFO)
trading card and collectibles business
Q (Robert Drbul · BTIG): He asked how the trading card and collectibles business is performing within core DICK'S and its trend.
A: They said the trading card and collectible business is performing very well and is a big growth opportunity. They plan to build Collectors Clubhouse spaces in House of Sport stores and some Field House locations, are partnering with Michael Rubin and Fanatics, and will market the business more aggressively.
"The trading card business and the collectible business has been great." — Edward Stack (CHAIR)