Dick's Sporting Goods cut its full-year sales and profit outlook and warned of a growing inventory backlog, as consumers struggling with affordability cut back spending on pricey footwear. Shares fell as much as 27 per cent in morning trading and are down more than 40 per cent from a recent peak in June.

Executive chair Ed Stack told analysts that the "industry is carrying too much inventory" while consumers have been "even more cautious than expected due to the geopolitical environment." Recent retail sales and consumer sentiment data have underlined the affordability crunch many Americans face amid Donald Trump's tariffs and war in Iran.

July retail sales fell 0.6 per cent month-over-month, the biggest drop in more than a year. Last week, Walmart shares suffered their worst session since 2022 after reporting its weakest US sales growth in more than six years.

Dick's lowered its full-year net sales projection from $22.1bn-$22.4bn to $21.9bn-$22.2bn. Its operating income estimate was reduced from $1.69bn-$1.81bn to $1.45bn-$1.55bn. Stack said the inventory build-up was because certain legacy footwear and apparel franchises are "simply not resonating the way they once did."