Dick’s Just Beat Expectations — So Why Did the Stock Crash 9%?

Dick’s Sporting Goods just delivered the kind of quarter most retailers would happily frame on the wall – and the stock promptly fell through the 200-day moving average. It was a classic “good news, complicated story” setup: earnings and sales beat expectations, guidance was raised, comps were strong, and management painted a confident picture of the core business. Yet shares slid about 9%, breaking below the 200-day near 207 as investors focused less on the quarter and more on the bill coming due for the Foot Locker acquisition and restructuring.

On the headline numbers , the DICK’S Business did what it needed to do and then some. Companywide Q3 sales came in at $4.17 billion, ahead of expectations around $3.18–3.19 billion, with net income of $75 million and EPS of $0.86. On a non-GAAP basis, earnings per diluted share for the DICK’S Business were $2.78, slightly above last year’s $2.75, despite a shakier macro environment. Comparable sales for the DICK’S Business rose 5.7%, handily beating the 3.6% growth analysts were modeling, driven by increases in both average ticket and transactions – a healthy mix that suggests the consumer isn’t just cherry-picking doorbusters.

Under the hood, the DICK’S banner itself continues to execute. The comp growth reflects ongoing strength across key performance categories and the benefit of the company’s format expansion, including 13 new House of Sport locations and six new DICK’S Field House stores in the quarter. Management also highlighted gross margin expansion in the DICK’S Business – a sign that promotions are disciplined and inventory is in good shape. This is not a “sales up, margin down” story; it’s a retailer expanding its footprint and protecting profitability, even as it absorbs the noise from a major acquisition.

The real wrinkle is that major acquisition. This was the first quarter since DICK’S closed its Foot Locker deal, transforming itself into what it calls a global platform at the intersection of sport and culture. That sounds great on a slide, but in practice it starts with some fairly unglamorous work. Management made it clear they are “cleaning out the garage” at Foot Locker – optimizing inventory, closing underperforming stores, and taking a hard look at unproductive assets. That process will come with $500 million to $750 million in future pre-tax charges and a sharply weaker near-term P&L for the Foot Locker Business. For Q4 2025, they expect Foot Locker gross margin to be down 1,000 to 1,500 basis points versus last year, with pro-forma comp sales down mid- to high-single digits and operating profit only “slightly negative” excluding one-time costs.

On the outlook, however, DICK’S wasn’t shy about raising the bar. For the DICK’S Business, full-year 2025 comparable sales guidance was raised to 3.5%–4.0% from 2.0%–3.5%, and EPS guidance nudged up to $14.25–$14.55 from $13.90–$14.50. Net sales are now expected in the $13.95–$14.0 billion range. Importantly, that EPS outlook explicitly includes the expected impact of tariffs currently in effect, suggesting management is not assuming any near-term relief on the trade front and still feels confident enough to guide higher. Capital expenditures are pegged at about $1.2 billion gross and $1.0 billion net, underscoring ongoing investment in stores, experiences, and the broader platform.

Management’s commentary on the consumer was notably constructive, especially considering the macro anxiety hanging over discretionary categories. Lauren Hobart, the CEO, emphasized that long-term strategies and “best-in-class execution” are driving strong results, with comps up on both traffic and ticket. That combination suggests the core sporting goods consumer is still spending, not just trading down or waiting for clearance events. Ed Stack, the executive chairman, leaned into the narrative that DICK’S is “operating from a position of strength” and that the heavy lifting at Foot Locker is about setting the stage for profitable growth starting in 2026, rather than plugging holes in a sinking ship.

So why did the stock trade like the quarter was a disaster rather than a beat-and-raise? The market appears to be repricing execution risk and near-term earnings drag from the Foot Locker integration. Those $500–$750 million in charges, the deliberate inventory clean-up, and margin pressure at Foot Locker all weigh on the consolidated story, even if the DICK’S Business is holding up nicely. Investors are also still digesting the strategic logic of buying a struggling sneaker chain at a time when the core business is already mid-turnaround – skepticism that won’t vanish on one decent print.

Technically, the reaction matters almost as much as the fundamentals. With shares breaking below the 200-day moving average around 207 on heavy selling, the stock is signaling that the Street wants more proof that the combined DICK’S–Foot Locker platform can deliver the promised synergies and return Foot Locker to “its rightful place” in the industry by 2026. Until investors see evidence that the garage is not just being cleaned but reorganized into something structurally more profitable, good quarters like this may keep getting sold. For now, DICK’S Business looks solid; it’s the newly acquired second act that has the market nervous.