Dick’s Sporting Goods on Tuesday blamed “organized retail crime” for a nearly 25% drop in its quarterly earnings as the company revised downwards its full-year earnings outlook.
The popular retail chain reported a 23% fall in profits at its more than 700 stores nationwide in the second quarter — even as sales rose 3.6%.
Dick’s attributed the losses to “organized retail crime and our ability to manage out-of-stocks,” an industry term used to describe stolen or lost goods.
“Our second-quarter profitability fell short of our expectations, due in large part to the impact of increased inventory shrinkage, an increasingly serious issue affecting many retailers,” said Lauren Hobart, Dick President and CEO.
Dick’s stock price plummeted more than 20% after Tuesday’s opening bell.
Dick’s representatives did not immediately respond to the Post’s request for comment.
The Pennsylvania-based chain became the latest major retailer to denounce brazen robberies as damaging to its bottom line. Last week, Target CEO Brian Cornell said shoplifting involving “threats of violence” increased 120% in the first five months of the year.
“Our team continues to face an unacceptable level of retail theft and organized retail crime,” Cornell said as Target reported its first quarterly sales decline in six years.
The National Retail Federation, the country’s largest retail group, said in its latest safety survey of about 60 retailers that shrinkage averaged 1.4% last year, equivalent to a loss of $94.5 billion.
Dick’s lowered its guidance for the year to $11.33-$12.13 per share — down from a previously issued guidance of $12.90-$13.80.
The company reported Net income for the second quarter was $244 million, or $2.82 per share, down from $319 million, or $3.25 per share, in the same period last year.
Inventory decreased approximately 5% in the quarter compared to the second quarter of 2022.
Dick’s has been a frequent target for shoplifters in recent months.
Just weeks ago, three women stole $200 worth of goods from a Dick’s outpost in Brookfield, Wisconsin, before fleeing Texas in a license-plate Toyota, sources say fox 6
In May, Barry Bree, the former Deputy Public Safety Commissioner for Oyster Bay, NY, was arrested and charged with stealing over $1,100 worth of golf clubs from a Dick’s in Melville, NY. News 12 New Jersey reported.
In the same month a Reddit user also used the platform to share an eyewitness account of a robbery at the sporting goods store location in Montgomery County, Maryland.
“The store alarm rang for a long time and some of the customers around me told me that a guy and a girl loaded some carts full of gear and clothes and then just ran away,” the user wrote.
The thieves “shoved her [the carts] I went out the back door, dumped everything into a waiting getaway car, and drove away.”
And back in March, eight shoplifters occurred at Dick’s in Pleasant Hill, California in just seven days, according to local news outlets tone cord.
The thefts began on March 2 when a man stole five pairs of shoes worth $740 from the store.
Three days later, another man stole a $1,400 electric mountain bike and fled the scene in the stolen vehicle in the afternoon. Later that evening a group of men and women collected some jackets.
The next day, a woman walked out with a shopping cart full of items she hadn’t paid for by early afternoon, and two men stole items and returned them for money late afternoon, Claycord said.
Three more shoplifting incidents occurred on March 7 and 8; and on March 9, a woman snapped up Nike clothes.
Of the eight shoplifters, only one was arrested, the news site reported.
Although Dick’s attributed some of its losses to organized crime, the company did not disclose how much of the inventory reduction was directly attributable to theft.
analysts at CNBC have said that retail crime is a metric that is difficult to measure accurately. Retailers are also not required to disclose data related to shoplifting.
The earnings report comes just days after Dick’s laid off about 250 employees from the company’s workforce, a person familiar with the matter said Bloomberg.
The unnamed source said the cuts were mostly at the sporting goods store’s customer service outlets, the outlet reported.
Dick’s reportedly plans to use the freed-up resources to hire more workers in other areas.
However, it wasn’t all bad news for Dick’s in the second quarter: the sporting goods chain reported that same-store sales rose 1.8% — a significant improvement from the 5.1% decline in the year-ago period — thanks to sales growth of 2 ,8th %. increase in transactions.
And while profits fell short of expectations, the retailer’s sales were still higher compared to 2019.
The Pennsylvania-based chain also opened seven new House of Sports locations during the quarter.
The stores, covering up to 100,000 square meters, combine retail with activities such as climbing walls and driving range simulators.