Dick's Sporting Goods on Tuesday revised its 2026 outlook and warned that consumer demand for athletic apparel and footwear is weakening.

The sports apparel and footwear retailer's stock fell more than 29% during Tuesday's trading session, putting it on pace for a record one-day percentage drop if the losses hold. The decline came after the company missed second-quarter estimates and reversed expectations for annual comparable sales growth at Foot Locker, the chain it bought last year for $2.4 billion as part of a push to expand in sneakers and international markets.

The warning lands at a time when U.S. shoppers are becoming more selective about discretionary purchases as higher gas and food costs strain household budgets. For retailers tied to footwear launches and fashion-driven demand, that makes product timing and inventory management especially important, because weak sell-through can quickly lead to heavier discounting.

"Not only were there fewer launches in the second quarter, but those launches performed below both industry and our expectations," Executive Chairman Ed Stack said, signaling a more cautious view of the rest of the year. "As a result, we are taking a more cautious view of the balance of the year."

Dick's Sporting Goods CEO Lauren Hobart said the company is taking a more cautious outlook, but remains "highly confident in the strength of Dick's Business and our long-term opportunity at Foot Locker."

The comments came after the company raised its annual target in May and said it saw encouraging "proof points" for returning Foot Locker's comparable sales to growth.

On a post-earnings call Tuesday, executives said lifestyle and legacy silhouettes were "simply not resonating the way they once did," leading to inflated inventory and heavy discounting.

Foot Locker was hit hardest by that trend because of its exposure to legacy brands, as well as its presence in Europe and other international markets that have struggled amid geopolitical uncertainties. That exposure matters for Dick's because Foot Locker is still in the early stages of being folded into a broader retail strategy, making its sales mix and inventory trends a key read-through for how the acquisition is performing.

Neil Saunders, managing director at GlobalData, said the weakness "does not bode well for the major sneaker brands, although they may have been able to offset some of the weakness by leaning more into apparel, especially around the World Cup."

"Even so, it will set alarm bells ringing for investors," Saunders added.

Dick's now expects annual sales of $21.9 billion to $22.2 billion, down from its earlier forecast of $22.1 billion to $22.4 billion.

The company's quarterly profit of $3.53 per share missed estimates of $3.76. It reported $5.59 billion in net sales for the 13 weeks ending Aug. 1, which included the FIFA World Cup, missing estimates of $5.65 billion, according to data compiled by LSEG.

Dick's also now expects Foot Locker's annual comparable sales to be flat to down 2%, and said part of the $59 million in tariff refunds it received will be invested in promotions.

Reuters contributed to this report.