DKS Stock Forecast & Price Target

Dick's Sporting Goods reported a significant increase in consolidated sales, rising 36.3% year-over-year to $4.168 billion, supported by an upward adjustment in sales growth guidance to between $13.95 billion and $14.00 billion. The company's merchandise mix is also strengthening, highlighted by an estimated 80% growth in its Nike business since 2019, alongside notable increases in footwear, apparel, and hardlines. Additionally, Dick's has implemented meaningful structural improvements since 2019, enhancing its inventory differentiation and omnichannel offerings, positioning the company favorably for continued long-term growth.

Dick's Sporting Goods faces significant challenges following its acquisition of Foot Locker, as evidenced by a 4.7% comp decline for Foot Locker on a pro forma basis, attributed to weaker demand for its product assortment. Additionally, the company is projected to experience a "slightly negative" operating income and anticipates weak performance for 4Q25, with an expected comparable store sales decline of mid-single digits to high-single digits as it implements inventory reduction strategies. Furthermore, Foot Locker’s gross margin is forecasted to decline by 1,000-1,500 basis points, along with an estimated 17% decline in Nike business revenue from 2019 to 2024, contributing to a grim outlook for the company's profitability and operating margin, which is expected to contract to 9.1%.