DICK'S Sporting Goods, Inc. (DKS): what the price assumes

In the published model solve dated 2026-Q2, anchored at $139.16, DICK'S Sporting Goods, Inc. (DKS) is priced for -3.5% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/DKS

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7.1% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is supported by asset-based and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.3%); the inversion above states its own rate.

Per-Model Detail (n=14)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Buying Foot Locker in September 2025 made footwear 40.0% of revenue and split the company in two, with the legacy DICK'S business turning an 11.12% segment margin in fiscal 2025 while the acquired one posted a 52.2 million dollar segment loss in its stub period.
• A single supplier sits behind roughly a third of what both banners put on the shelf: the annual report describes Nike as the largest vendor, "representing approximately 31% of our consolidated merchandise purchases", with no other vendor above 10%.
• Management has guided the acquired segment to 100 to 150 million dollars of profit this fiscal year against pro forma comparable sales growth of 1% to 3%, and the second-quarter report on August 27, 2026 is the first checkpoint on it.

Bull Case

The families of valuation method do not agree about this stock, and the disagreement is where the argument starts. Peer multiples land almost exactly on today's price. The earnings-power methods, which capitalize what the company earns right now and credit no growth at all, sit far enough under that the price is about 87% above them, and the asset-value methods about 72% above. Only the forward-growth methods reach past the price. Which of those readings is right turns almost entirely on a business DICK'S did not own two years ago.

On September 8, 2025 the company closed its purchase of Foot Locker, and the fiscal 2025 accounts show what that did to scale. Net sales rose 28.1%, a figure that "Includes $3.1 billion of net sales for the Foot Locker Business since the acquisition date". The 10-K describes what was bought as "a portfolio of specialty athletic footwear and apparel banners". Footwear is now 40.0% of revenue, ahead of hardlines at 29.0% and apparel at 28.0%. A general sporting goods retailer that sold shoes as one category inside the box now runs a dedicated footwear chain next to it.

The original business did not slow down to make room. Comparable sales for the DICK'S segment rose 4.5% in fiscal 2025, and the composition is the interesting part: 4.2 points came from sales per transaction and 0.3 from transaction count, which is baskets getting bigger rather than doorways getting busier. That segment produced 1.568 billion dollars of profit, 11.12% of its own net sales, up 4.7% on the year and steady to within two basis points of the year before. The first quarter of fiscal 2026 then accelerated, with comparable sales up 6.0%, or 185.7 million dollars, on a 5.5% rise in sales per transaction and a 0.5% rise in transactions.

Behind those comps is a real-estate program most retailers cannot run. Sixteen House of Sport locations opened during 2025, taking the count to 35 at year end, with roughly 14 more planned for 2026 and construction starting on about 18 for 2027. Field House closed the year at 42 locations with about 22 more coming, and Golf Galaxy Performance Centers stood at 33 with about 15 more planned. These are not refreshes of existing boxes. They are larger formats with more revenue per site, and they are how a mature retailer keeps producing square-footage growth without needing a new customer to walk in.

For the acquired half, management is running a tested playbook rather than making a promise. An eleven-store pilot called Fast Break tried a tighter assortment and better in-store presentation, and the stated plan is to "expand the Fast Break store initiative in 2026, with the goal to have approximately 250 locations ahead of the back-to-school season". The inventory was written down and liquidated at the outset rather than merchandised through slowly, which is the expensive version of that fix and the one that clears the deck fastest. The guidance record gives the plan some standing: since 2006 management has raised guidance on 35 separate occasions and cut on 2.

Cash return continued through all of it. The share count has fallen about 4.5% a year over the four years to May 2, 2026, so each remaining holder's claim on those segment profits grew even while the company was absorbing something large. Against the closest listed comparison, ASO earns an 8.4% operating margin on 6.14 billion dollars of revenue growing 3.8%, and GOLF earns 11.7% on 2.61 billion dollars growing 6.3%. The legacy DICK'S segment sits at the upper end of that range on a far bigger base, which is worth something in a category where one vendor supplies about a third of the merchandise and allocates it to whoever sells it best.

Bear Case

DICK'S buys from roughly 1,500 vendors, and one of them matters more than the rest combined. The annual report names Nike as the largest, "representing approximately 31% of our consolidated merchandise purchases", and says no other vendor reached 10% of fiscal 2025 purchases. That was a manageable dependency when footwear was one aisle in a general sporting goods store. It is a structural exposure now that footwear is 40.0% of revenue and the company owns a chain whose proposition is largely selling that one brand. Allocation decisions, the wholesale-versus-direct balance and price architecture all sit on the other side of that table.

Against that dependency, the price asks for compounding. At $206.12 the market is paying about 19 times company-wide operating income, and that multiple requires operating profit to grow roughly 6.6% a year for five years. The legacy segment grew its profit 4.7% last year, and what it kept from each dollar of its own sales did not widen at all. So the required growth has to come mostly from the acquired half, and the acquired half lost 52.2 million dollars between the September closing and the fiscal year end, on 3.1 billion dollars of sales. Management's own plan for it this year is that "we expect pro forma comparable sales growth to be in the range of 1% to 3% and segment profit to be in the range of $100 to $150 million". Hit the top of that and the acquired business still earns a low-single-digit margin. Miss it, and the multiple drifts back toward what the earnings-power methods already say, which is a long way below the price.

Some of the damage is already in the reported numbers. Consolidated gross profit came in at 32.92% of net sales in fiscal 2025 against 35.90% the year before, and the 10-K attributes the drop to "a 127 basis point decrease, or $217.9 million, to write-down and liquidate Foot Locker inventory as part of our Foot Locker acquisition-related charges" plus further mix effects. Write-downs stop. The mix does not: a footwear chain built around mall and off-mall specialty stores carries different economics, and blending it in permanently lowers the consolidated margin against which the market has been setting the multiple.

The demand side offers no obvious cushion. The 10-K flags "off-mall retail nodes where many of our stores are located" and warns that "Declines in traffic or conversion rates may require us to increase markdowns, promotions, or marketing spend, which could adversely impact our financial results". Sporting goods has been running on a healthy consumer and a strong sneaker cycle. The first quarter's 6.0% comparable sales gain came almost entirely from bigger baskets, with transactions up only 0.5%, which is what ticket size and mix look like when foot traffic is flat. In a promotional turn, the basket goes first.

The funded balance sheet is not where the fragility lives. Interest cover is wide, and the borrowings are long-dated and cheap, listed in the filing as "4.00% senior notes due 2029 (the 2029 Notes), 3.15% senior notes due 2032 (the 2032 Notes) and 4.10% senior notes due 2052". Rent is the obligation that scales with the store estate. Counting the leases, total net obligations run near 6.8 billion dollars, against something under a billion on the funded-borrowings basis alone. Leases do not renegotiate downward in a soft quarter. A company that has just absorbed an entire second store fleet has made its cost base less flexible at exactly the moment its newest segment needs room to move.

Valuation

At $206.12 the market is paying about 19 times company-wide operating income. Read backwards, that is a requirement rather than an opinion: operating profit compounding around 6.6% a year for five years, on roughly the economics the company has actually shown. The pace itself is unremarkable and inside what DICK'S has recently delivered. The duration is the demanding part. Keep the figures approximate; the calculation rests on an 8.1% cost of capital and 4% terminal growth, and a single point of cost of capital moves the required growth by about seven points.

Where that growth would come from is visible in the segment disclosure. The DICK'S segment earned 11.12% on its own net sales in fiscal 2025, a level it has now held for two years running. Consolidated, the trailing operating margin is about 8.4%. The gap is the acquired business. Guidance for the legacy segment this year is "comparable sales growth for the year to be in the range of 2% to 4%" with segment profit of 1.58 to 1.66 billion dollars, which is a good business held roughly flat. The improvement the price needs is therefore loaded onto the other segment, and the other segment is guided to a low-single-digit margin.

The methods split along that same line. Peer multiples put the price essentially at their central estimate, because on revenue and earnings multiples the enlarged company screens like its cohort. The earnings-power methods, which capitalize normalized operating profit with nothing credited for growth, leave the price about 87% above them, and the asset-value methods, working from book value and the return earned on that book, about 72% above. The forward-growth methods are the only ones that reach past the price, and the one that gets closest does so only by holding the enterprise multiple flat all the way to its terminal year, which is an assumption that the market never re-rates a retailer downward. The pattern is neither a cheap stock nor a bubble. It is a stock priced as though the integration works.

The cohort reads the same way from a different angle. ASO earns an 8.4% operating margin on 6.14 billion dollars of revenue growing 3.8%, while GOLF earns 11.7% on 2.61 billion dollars growing 6.3%. The consolidated DICK'S margin currently sits at the bottom of that band and its legacy segment near the top, and closing that internal spread is precisely what the market is paying for.

None of this is constrained by the balance sheet. Operating profit covers the interest bill about 21.2 times over, the business is not consuming cash, and the share count has come down roughly 4.5% a year over the four years to May 2, 2026. On the funded-borrowings basis net debt sits under a billion dollars; count the store leases and the figure is nearer 6.8 billion, which is the cost of owning a large physical estate rather than a solvency question. Management has raised guidance on 35 separate occasions since 2006 and cut on 2, a record built entirely on running one banner. This year's guidance is the first it has set across two.

Catalysts

The next scheduled information event is the second-quarter report on August 27, 2026. By management's own framing it should be the weaker half of the year: the 10-K tells investors to expect segment profit as a percentage of net sales to decline in the first half of 2026 and expand in the second. What matters in that print is less the headline than whether the acquired segment's comparable sales have turned positive ahead of the back-to-school season, when the bulk of footwear volume lands.

Two commercial moves arrived in the run-up. On July 1, 2026 the company announced ScoreCard+, a paid tier of its loyalty program priced at 99 dollars a year. Paid loyalty is a different economic object from a free points scheme, because it collects money up front and makes the member's next purchase decision less sensitive to price. Two weeks earlier, on June 15, 2026, the company said it would expand Lids shop-in-shops to 100 of its stores, which places licensed headwear, a high-turn impulse category, inside an existing footprint at low incremental cost.

The rest of the year is largely scheduled. The 10-K says management expects "slightly higher comparable sales in the first half of 2026, primarily due to the FIFA World Cup", and the company launched its tournament campaign on June 9, 2026, so the shape of first-half demand is known and only the size is open. The Fast Break conversion across the acquired banners is targeted at roughly 250 locations ahead of back-to-school, which puts the first real evidence on that program in the third-quarter print rather than this one.

Peer Cohorts (Per Segment, With Filing Citations)

DICK'S Sporting Goods (consolidated) (reported)

• ASO (Academy Sports and Outdoors, Inc.)
• FY2025 10-K: …to deposit with CBP duties relating to these products (the "AD/CVD deposits"), which are included in prepaid expenses and other current assets on the Company's Consolidated Balance Sheets. In January 2024, we requested a changed circumstances review of CBP's determination by the U.S. Department of Commerce (the…
• FY2025 10-K: . See Note 1 to the consolidated financial statements for information related to the products and services offered as well as business operations. The accounting policies of the Company's single reportable segment are the same as those described in the summary of significant accounting policies in Note 2 to the…
• YETI (YETI Holdings, Inc.)
• FY2025 10-K: …the United States, Canada, Australia, New Zealand, the United Kingdom, Europe, and Japan, among others. We carefully evaluate and select retail partners that have an image and approach that are consistent with our premium brand and pricing. Our national and regional specialty retailers in the United States include…
• FY2025 10-K: …product receipt, warehousing, certain limited product inspection activities, and coordinating outbound shipping. We manage our inventory levels by analyzing product sell-through, forecasting demand, and placing orders with our manufacturers before we receive firm orders from customers to ensure sufficient…
• GOLF (Acushnet Holdings Corp.)
• FY2025 10-K: …increase and concentrate our credit risk, put pressure on our margins and impair our ability to sell products. The sporting goods and off‑course golf equipment retail markets in some countries, including the United States, are dominated by a few large retailers. Certain of these retailers have in the past increased…
• FY2025 10-K: 15PlanMember us-gaap:CommonStockMember 2025-01-01 2025-12-31 0001672013 us-gaap:RestrictedStockUnitsRSUMember golf:OmnibusIncentive2015PlanMember us-gaap:CommonStockMember 2025-01-01 2025-12-31 0001672013 us-gaap:PerformanceSharesMember golf:OmnibusIncentive2015PlanMember us-gaap:CommonStockMember 2025-01-01…
• CALY (Callaway Golf Company)
• FY2025 10-K: …sales in 2025, 2024 and 2023, respectively. Consolidation of retailers or concentration of retail market share among a few retailers may increase and concentrate our credit risk, putting pressure on our margins and our ability to sell products relating to our golf equipment and apparel, gear and other business…
• FY2025 10-K: …and accessories business, the Callaway soft goods business and the OGIO business, which consists of golf apparel and accessories (including golf bags), and storage gear for sport and personal use. This segment also includes royalties from licensing of our trademarks and service marks for various soft goods products.…
• PTON (Peloton Interactive, Inc.)
• FY2025 10-K: …as we have concluded that it is more likely than not that the deferred assets will not be utilized. 46 Results of Operations The following tables set forth our consolidated results of operations in dollars and as a percentage of total revenue for the periods presented. The period-to-period comparisons of our…
• FY2025 10-K: …on the Company's Consolidated Balance Sheets and depreciates over the equipment's useful life. Depreciation expense associated with the underlying equipment is reflected in Connected Fitness Products Cost of revenue in the Company's Consolidated Statements of Operations and Comprehensive Loss. Non-lease components…
• ONON (On Holding AG)
• FY2025 20-F: - Information on the Company - Business Overview"). By executing successfully against these pillars, On delivered strong results in 2025. Net sales increased by 30.0% to CHF 3,014.0 million compared to 2024. This momentum was driven by organic growth, fueled by strong consumer demand for our brand across sales…
• FY2025 20-F: …consumer experience. Direct-to-Consumer ("DTC") When people step into our DTC channels, they get to experience On in its fullest expression. Our owned retail stores and our global e-commerce platform offer premium access to our products and stories that helps us build deeper relationships with our fans. Launched in…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.