Wolfe Research downgraded Dicks Sporting Goods Inc  (DKS) - Get Report to "peer perform" on concerns the retailer will face accelerating margin pressure as consumers continue to migrate to online shopping.

Analysts Adrienne Yih and Doug Drummond wrote that negative mall traffic paired with a "persistent, challenging environment" has weighed on Dicks performance and margins. The sporting goods retail sector has performed worse than the industry overall, yet Dicks has not been able to carve out market share from peers who have exited.

Brick-and-mortar deleverage will likely worsen as sales move online and from a high fixed-cost channel to a high variable-cost channel. Yih and Drummond said they're skeptical of any further store openings beyond what's already planned.

Wolfe said Dicks faces increasing competition from Amazon.com (AMZN) - Get Report , Hibbett Sports (HIBB) - Get Report and Gander Mountain, given its recent "lifeline" from Camping World Holdings (CWH) - Get Report .

Dicks stock traded up over 1.5% late-afternoon.

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