Insiders are starting to buy this retail turnaround story, so I am too

Dick’s Sporting Goods shares are climbing back out of the summer low after the leading sports retailer lowered guidance. Now that corporate insiders are starting to buy in, the turnaround appears to have legs. Dick’s bucked the 2020 Covid hit on brick-and-mortar retailers and delivered strong shareholder returns in the following four years, with the stock doubling in 2021 alone. The momentum shifted with the troubled $2 billion Foot Locker acquisition in 2025. 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 due to the sales underperformance by Foot Locker stores and rising gasoline prices. The stock is recovering now, up nearly 25% from its low — and I believe the comeback can continue. Here’s why: 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: improving Dick’s is making progress with Foot Locker by clearing old inventory and launching new products. Competitor: On Holding AG recently reported meaningful gains in U.S. wholesale sales at an analyst day, which I believe bodes well for Foot Locker sales. Insider activity is robust; six insiders purchased Dick’s shares in the 30 days following the August drop, totaling $5.1 million at around $130 a share, according to Verity Research. The third quarter saw the largest insider buying activity in the stock in over a decade, per Verity. CFO Navdeep Gupta was a buyer after showing a consistent pattern of selling over the years, showing that insiders have confidence the stock is cheap and the turnaround is happening at Foot Locker. Core Dick’s is doing well, accounting for about 75% of total revenue, and it is performing well with quarterly comparable same-store sales of 4%-to-5%. They have gained market share in the last six years, rising from 7% to 9%. Dick’s is driving traffic to stores by making them destinations with batting cages, ice rinks, and climbing walls, and its loyalty program has led to 30 million members. Why now? 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, allowing you to generate income while the turnaround unfolds. Bottom line: The turnaround is underway at Dick’s and I think the valuation is very compelling — and seemingly 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.

Source link