Dick's Sporting Goods (DKS) Q2 results and lower 2026 guidance point to challenging conditions in the athletic footwear and apparel market, UBS said in a note emailed Wednesday.
The brokerage said the company's core business continued to gain market share, but both the segments had to sacrifice some margin to drive the business. Core Dick's business posted a 4.9% comparable sales gain, while Foot Locker's comparable sales fell 3.6%.
The company lowered its non-GAAP EPS guidance to $11 to $12, from $13.50 to $14.50 previously.
UBS said the key question is about the impact on the combined business' earnings power, if weakness in athletic footwear and apparel persists. It also expects to assess whether recent Foot Locker performance prompts changes to the segment's strategy.
UBS maintained a buy rating on the stock with $275 price target.
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