Dick's Sporting Goods Stock: Jim Cramer's Take After Historic Drop

Jim Cramer, the host of "Mad Money," suggested that Dick's Sporting Goods' record-breaking 30% stock drop could present a chance for investors prepared to overlook the company's immediate difficulties.

"If you don't own Dick's, you dodged a bullet today, but based on the last time the stock fell apart, you might want to be a buyer over the next couple of months, because this company has a history of coming back from the dead," Cramer stated. He referenced the company's August 2023 earnings report, which caused a 24% stock plunge. The stock eventually hit a low in late October before experiencing a substantial rally over the subsequent 15 months.

Before the recent 30% fall, Dick's had experienced its worst single-day stock performance three years prior. This latest downturn followed a second-quarter earnings and revenue report that fell short of expectations, leading to a significant reduction in the company's full-year profit forecast. Cramer identified the recently acquired Foot Locker as the primary source of these issues, while the core Dick's business demonstrated relative resilience.

Comparable sales for Dick's increased by 4.9%, meeting projections. In contrast, Foot Locker's comparable sales declined by 3.6%, contrary to Wall Street's expectations of a slight rise. Consequently, the company revised its full-year sales outlook downward for Foot Locker but kept its comparable-sales forecast for Dick's unchanged.

Cramer attributed Foot Locker's underperformance to a broader slowdown in the athletic footwear and apparel markets. He noted that shifting consumer preferences have led to an accumulation of inventory for certain classic sneaker styles and apparel brands, driving increased industry-wide discounting.

He conceded that the acquisition of Foot Locker, finalized in September 2025, is increasingly appearing to be a strategic misstep. "Clearly, they're having trouble turning this business around," Cramer remarked. "That shouldn't come as a surprise to anyone who watched the performance of Foot Locker's stock before the takeover bid."

Cramer cautioned that the upcoming quarters could remain challenging as retailers work through excess inventory. However, he pointed out that the recent sell-off has recalibrated expectations and made the stock more attractive, now trading at approximately nine times its projected 2027 earnings.

Looking ahead, Cramer remains optimistic about Dick's position as one of the few major sporting goods retailers remaining in the market. "I don't want to give up on Dick's down here," Cramer concluded. "In the long-run, I'm a believer, because this is the only remaining sporting goods retailer with genuine scale, even if it's also joined at the hip with the struggling Foot Locker."