Dick’s Sporting Goods’ bleak earnings report and record selloff on Tuesday made a few things clear: Older sneakers and even some newer ones are in trouble, and it’s become the entire footwear industry’s problem.
During the athletic-gear chain’s earnings call on Tuesday, Executive Chairman Ed Stack said that “legacy” sneakers were sitting on shelves longer at its stores. The trend, he said, had occurred across the footwear-retail landscape, leading Dick’s and its rivals to run more aggressive discounts.
“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,” he said.
When an analyst asked whether the footwear industry was in a hangover, Stack said: “We have the hangover right now.”
Brands like Nike, On and Hoka were currently going through a reset, he said. Nike, in particular, has been trying to sell off a surplus of throwback sneakers, like Dunks and Air Force 1s, that have fallen out of style.
Sneaker chain Foot Locker, which Dick’s bought last year, was particularly vulnerable to those issues, Stack said.
“Foot Locker is more dependent on launch and retro product,” he said. “Not only were there fewer launches in the second quarter, but launches we did see performed below industry and our expectations.”
Investors, in turn, rushed toward the exits. Shares of Dick’s tumbled 30.7% on Tuesday. The drop was its biggest percentage decrease on record, based on data going back to Oct. 16, 2002. Shares also hit their lowest close since Nov. 30, 2023.
The selloff hurt shares of other athletic-gear sellers on Tuesday. Nike’s stock dropped 3.1% and Under Armour shares shed 4.7%. Shares of Adidas lost 1.5%, while those of running-shoe maker On Holding fell 2.3%. Deckers Outdoor, which makes Ugg boots and Hoka sneakers, saw its stock slide 3.6%. Footwear chain Genesco fell 4.2%.
More broadly, shares of retailers like Walmart, Target, Gap and Urban Outfitters were also down on Tuesday.
Stack said Dick’s delivered a “strong second quarter” in line with its expectations. But profit and sales both missed analyst expectations, and the company slashed its full-year earnings outlook.
For the full fiscal year, the company cut its guidance ranges for adjusted EPS to a range of $11 to $12 from a range of $13.50 to $14.50 and for net sales to a range of $21.9 billion to $22.2 billion from a range of $22.1 billion to $22.4 billion.
Dick’s results and forecast arrived as higher costs of living keep people from buying sneakers more frequently. Sneaker makers have tried to win them back with newer, more innovative offerings. But Nike this summer warned of a continued decline in sales, and investors questioned the state of its turnaround efforts.
During the call, Stack noted some positives. Newer products, particularly those geared toward athletes, were resonating with shoppers. He said that some Nike shoes, like its Mind sneaker line and its Vomero running shoes, had done well. He also expressed optimism about casual footwear from Birkenstock and Ugg.
Dick’s reported net income for the quarter to Aug. 1 that fell 17.3% from a year ago to $315.5 million. Excluding nonrecurring items, adjusted earnings per share dropped to $3.53 from $4.38 and missed the average analyst estimate compiled by FactSet of $3.76.
Sales rose 53.2% to $5.59 billion, boosted by the addition of Foot Locker sales, but missed the FactSet consensus of $5.64 billion.
At Dick’s stores, sales grew 5.6% to $3.85 billion, below expectations of $4.1 billion, while Foot Locker sales of $1.74 billion fell short of forecasts for $1.82 billion.
Dick’s stock has dropped 32.1% in 2026, while Nike shares have lost 37.7% and Under Armour’s stock has gained 4.8%. The S&P 500 index has advanced 12% this year.