The key challenges facing the athletic footwear sector that’s impacting some U.S. outdoor sports retailers are expected to persist throughout the rest of 2026.
Those challenges run the gamut from softness in end-of-cycle-shoe product lines to too many promotions. Then there’s the problem of limited inventory for the new shoe styles that resonate with consumers, the ones that stymie retailers because they can’t get enough of those shoes in stock to sell. Of course, performance-based running shoes continue to see upward momentum, but that’s not enough for retailers to base the bulk of their entire business model on if they’re looking at long-term survival.
JD Sports, Dick’s Sporting Goods and the growing Academy Sports + Outdoors are the big box outdoor specialists in the U.S. market. Below is a look at each retailer’s operations.
JD Sports
For JD Sports, the U.S. market was impacted by a “weaker core consumer sentiment” and deferred July back-to-school demand that moved into the first half of August, coupled with a slowdown of sales of high-heat footwear and ongoing softness in end-of-cycle shoe product lines. The retailer did see some offsets from continued momentum in the performance-based running category and new footwear styles.
JD Sports chief executive officer Régis Schultz said in a company conference call on first half results that running now has two subcategories, retro running and new running with On, Hoka, Salomon and Vomero Plus growing very fast. He also noted that running clubs and gyms are “becoming the new nightclubs” as health, fitness and well-being are becoming an increasing priority for JD’s core customer. The growth within running — and related sneaker purchases — has helped to offset declines in the retro basketball and retro football categories.
JD’s business skews toward footwear, with a heavy concentration in lifestyle. According to Telsey Advisory Group (TAG) analyst Cristina Fernández, Nike is the No. 1 brand at JD sports and is expected to remain the leader as it has a strong position with the male consumer and kids.
As for JD’s other banners, Finish Line serves women through shop-in-shops at Macy’s, and Shoe Palace targets a large Hispanic audience.
DTLR, which in fiscal year 2026 posted $875 million in sales and has footwear tallying up 70 percent of sales, largely serves the African American male consumer. Hibbett, which in 2025 retailer posted $1.4 billion in sales and counts footwear representing 70 precent of sales to drive overall revenue, brings lifestyle fashion to underserved secondary and tertiary markets. Of all the banners, JD Sports is the most premium, with stores located in key cities and A-malls. JD’s main consumer is the young male between ages 18 to 24. “While this consumer prioritizes fashion and sneakers, it is under pressure given rising costs,” Fernández concluded.
Fernández noted that JD Sports is New Balance’s biggest wholesale partner globally, adding that the brand posted $9.2 billion in sales in 2025 from $3.3 billion in 2020. The brand today has a large lifestyle business that represents 35 percent of sales, the TAG analyst said. In performance, running is the brand’s biggest category.
Dick’s Sporting Goods
At Dick’s Sporting Goods, investors weren’t happy with its second quarter earnings report at the end of August when the outdoor retailer said net income fell to $315 million, or $3.50 a diluted share, from $381 million, or $4.71 a share, in the same-year ago quarter. And while net sales rose 53.4 percent to $5.59 billion from $3.65 billion, that fell short of Wall Street’s expectations of $5.64 billion. The company also lowered its yearly guidance for Foot Locker. Executive chairman Ed Stack noted that conditions across portions of the athletic footwear and apparel marketplace became increasingly promotional as the quarter progressed.
Those promotions aren’t expected to go away anytime soon, Stack told attendees at a Goldman Sachs’ Global Consumer and Retail Conference last month. He said that the promotions will continue through the balance of 2026. The good news is that the executive chairman doesn’t think the athletic cycle is over, adding that the footwear business at Dick’s is “really very good.” Stack specified that it’s the specialty channel, such as at Foot Locker, where the challenge exists.
The Dick’s executive chairman explained that the specialty channel represents the mall business, which is more dependent on launches of retro shoes than at big boxes such as Dick’s. He said the issues are mostly with legacy silhouettes at some of the brands, adding that when there’s new product, such as Nike’s Mind sensory shoe, the response from consumers “has been terrific.”
More specifically, Stack said the industry has too much capacity in some legacy product, and not enough capacity in some of the new shoes. He calls that “an imbalance [that’s] going on right now,” meaning that the problem for retailers such as Dick’s is that it can’t get enough of the new shoes that are resonating with consumers.
Academy Sports + Outdoors
One notable growing sports retailer is Academy Sports + Outdoors, where outdoor remains the retailer’s largest category at 30 percent of sales.
She described the store’s localization efforts, shop-in-shops, and assortment mix as standouts that help differentiate Academy stores from its competitors. The shop-in-shops include Nike, Jordan Brand and Ariat, among others. Fernández added that “Ariat has become more popular as workwear has turned into lifestyle wear.” She also noted a “strong performance running mix, with shoes from Adidas, Nike, Brooks and more, including price points over $200.”
Academy is also eyeing the fitness world, expanding its assortment mix to include Hyrox-branded goods. On Wednesday, the outdoor retailer revealed it would become the official Hyrox partner in North America. Academy will activate in five select race citiesm, including Tampa, Dallas, Nashville, Atlanta and Houston, culminating in its title sponsorship of Hyrox Houston in 2027.
The outdoor retailer last month posted a second quarter earnings report that reflected gains in both profits and sales. The current store network totals 327 locations, with 11 more to open in the third quarter of fiscal 2026. The retailer met Wall Street’s expectations that it would do better than its outdoor counterparts, such as Dick’s Sporting Goods and JD Sports. That’s primarily because it has less exposure to footwear than its sports retailer peers. And what Academy does sell in its footwear line is skewed toward performance, such as running and cleats.