Dick's Sporting Goods stock tanks as retail thieves snatch profits

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Dick's Sporting Goods stock tanks as retail thieves snatch profits

Josh Schafer · Reporter
Tue, August 22, 2023 at 9:35 AM EDT · 2 min read

Dicks's Sporting Goods (DKS) stock tumbled more than 20% Tuesday morning after the sporting goods retailer said organized retail crime has cut into its profits.

"Our Q2 profitability was short of our expectations due in large part to the impact of elevated inventory shrink, an increasingly serious issue impacting many retailers," Dick's CEO Lauren Hobart said in the company's second quarter earnings release before the bell on Tuesday.

The company's adjusted earnings per share of $2.80 in the second quarter came in about a dollar short of analysts expectations for $3.81. ... Dick's also cut it's full-year profit outlook due to the rise in retail crime. Dick's now sees full-year adjusted earnings per share in a range of $11.50-$12.30, down from a range of $12.90-$13.80. ... The company's earnings conference call is slated to begin at 10:00 a.m. ET.

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Organized retail crime has been a drag across the sector for more than year. ... Target (TGT), Best Buy (BBY), Rite Aid (RAD), and Dollar Tree (DLTR) have all highlighted "shrinkage," which includes theft, as a factor weighing on profits. ... In 2022, Target said it lost $400 million in profits due to inventory shrinkage. Last week, Target, Home Depot (HD), and Walmart (WMT) all called out shrink on their earnings calls.

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