DICK’S Sporting Goods (NYSE: DKS) reported first-quarter 2026 results with strong revenue growth and higher comparable sales guidance, but the stock came under pressure after adjusted earnings slightly missed estimates and margins declined.
Key numbers:
* Non-GAAP EPS: $2.90 vs. $2.91 expected
* Revenue: $5.16 billion vs. $5.04 billion expected
* Revenue growth: 62.7% year over year
* GAAP EPS: $3.54 vs. $3.24 last year
* Non-GAAP EPS: $2.90 vs. $3.37 last year
* GAAP operating margin: 8.7% vs. 11.5% last year
* Non-GAAP operating margin: 7.3% vs. 11.4% last year
* Inventory: $5.42 billion, up 52% year over year
* Long-term debt and financing lease obligations: $1.91 billion, up 28%
The headline revenue growth looks huge, but most of the jump came from the inclusion of Foot Locker after the acquisition. That makes the quarter harder to read because DICK’S is now a much larger business, but not yet a more profitable one.
Sales were strong:
* Consolidated net sales rose 62.7% to $5.17 billion
* Revenue beat estimates by about $120 million
* Core DICK’S continued growing
* Foot Locker added significant scale to the consolidated results
The problem was earnings quality.
GAAP EPS rose year over year, but non-GAAP EPS fell from $3.37 to $2.90. The company said current-year results included dilution from 9.6 million shares issued in connection with the Foot Locker acquisition.
That matters because the market is not just looking at whether DICK’S can get bigger. It is looking at whether Foot Locker can become accretive after integration costs, added share count, higher inventory, and lower margins.
Margins were the weak spot:
* GAAP operating margin fell to 8.7% from 11.5%
* Non-GAAP operating margin fell to 7.3% from 11.4%
* Operating leverage did not show up despite the much larger revenue base
That is likely why the stock reaction was negative. Revenue beat, but profitability moved in the wrong direction.
Foot Locker integration remains the main story. DICK’S expanded Foot Locker’s Fast Break initiative to about 100 stores globally during the quarter and said it remains on track to reach roughly 250 stores by back-to-school season.
Management also raised the low end of its full-year comparable sales outlook:
* DICK’S comparable sales: now expected to grow 2.5% to 4.0%, up from 2.0% to 4.0%
* Foot Locker comparable sales: now expected to grow 1.5% to 3.0%, up from 1.0% to 3.0%
Full-year adjusted EPS guidance was held at $13.50 to $14.50. GAAP EPS guidance was updated to $13.27 to $14.27, down from the prior range of $13.70 to $14.70.
Capital returns continued:
* $141 million of stock repurchased during the quarter
* $114 million paid in dividends
* Dividends were up 14% from the prior-year quarter
The read-through: DICK’S is showing sales momentum, but investors are focused on whether the Foot Locker deal improves earnings power or just adds scale with lower margins.