Insiders are starting to buy this retail turnaround story, so I am too
Dick’s Sporting Goods shares are starting to climb back out of the abyss they fell into over the summer after the leading sports retailer lowered guidance. Now that corporate insiders are starting to buy in, I believe the turnaround has some legs. Dick’s bucked the 2020 Covid hit on brick-and-mortar retailers and delivered amazing shareholder returns the subsequent next four years, with the stock even doubling in 2021 alone. Things started to go wrong when it purchased troubled Foot Locker for more than $2 billion in 2025. The shares dropped 13% in 2025. This year the struggles continued, including a 30% tumble in a single day this August after Dick’s cut its EPS forecast for the year because of the sales underperformance by Foot Locker stores. Higher gasoline prices haven’t helped either. The stock is recovering now, with the shares up nearly 25% from their low — and I believe the comeback can continue. Here’s why: Key points The company is making progress on turning around Foot Locker. Corporate insiders are buying shares in large amounts with some board directors making their first purchases in years. The core Dick’s stores are working, taking market share and introducing new concepts. Why I’m buying Foot Locker unit is improving Dick’s is making progress with Foot Locker by clearing old inventory and launching new products. Competitor On Holding AG had a recent analyst day where the shoe seller said it saw a meaningful pick-up in U.S. wholesale sales, which I believe bodes well for Foot Locker sales. Insiders are buying Six insiders purchased Dick’s shares in the 30 days following the August drop in the stock, totaling $5.1 million at around $130 a share, according to Verity Research. The third quarter saw the largest insider buying activity seen in the stock in more than a decade, per Verity. CFO Navdeep Gupta was a buyer after showing a consistent pattern of selling over the years. This shows me that the insiders have confidence that the stock is cheap and that the turnaround is happening at Foot Locker. Core Dick’s is doing well Core Dick’s is about 75% of total revenue, and it’s actually doing pretty well with quarterly comparable same-store sales running at 4%-to-5%. They’ve actually gained market share in the last six years to 9% from 7% overall. Dick’s is driving traffic to stores by making them destinations with batting cages, ice rinks and climbing walls. Its loyalty program has led to 30 million members. Why now? DKS YTD mountain Dick’s, YTD The stock trades at less than 12 times forward earnings, below its 10-year average of 14. Shares also sport a 3.3% dividend yield, a hefty payout compared to other retailers which allows you to generate some income while the turnaround unfolds. Bottom line The turnaround is underway at Dick’s and I think the valuation is very compelling — and apparently so do executives. Stephanie Link is the Chief Investment Strategist at Hightower Advisors, where her division manages $8.5 billion in assets (as of June 4, 2026). She has 35 years of experience managing money and serves on KKR’s investment council. She earned a B.S. in finance from Boston College. Disclosures: Link owns in Hightower Advisors. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. This content is provided as part of our editorial output for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to buy any security or other financial asset. The content is general in nature and does not reflect any individual’s unique personal circumstances. The above content might not be suitable for your particular circumstances. Before making any financial decisions, you should strongly consider seeking advice from your own financial or investment advisor. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
