Dick’s Sporting Goods' second-quarter profits fell 23% amid a rise in retail theft, the company announced on Tuesday.
"While we posted another double-digit EBT margin, 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 Sporting Goods CEO Lauren Hobart said in a statement.
Shares fell by double-digits intraday.
The big-box retailer posted net income of $244 million, or $2.82 a share for the quarter, compared with $318.5 million, or $3.25 per share, a year ago. Analysts expected earnings of $3.81 a share.
Dick's also cut its guidance and now expects to earn as much as $12.13 per share for the year, compared to the previous guidance of $13.80 per share.
President & CEO, Member of Board of Directors at DICK’s Sporting Goods, Lauren Hobart speaks onstage at the 35th Annual Footwear News Achievement Awards on November 30, 2021 in New York City. (Dimitrios Kambouris/Getty Images for Footwear News / Getty Images)
Dick’s forward-looking statements expressed uncertainty in the industry due to changes in macroeconomic conditions and other risk factors like organized retail crime and the store’s ability to effectively manage inventory shrink.
The company isn't the only retailer affected by theft; Kohl's, Foot Locker, Target and Walmart executives warned earlier this year of an increase in shrink and its effect on business.
Target CEO Brian Cornell said last week during an earnings call that "safety incidents" associated with shrink are "moving in the wrong direction."
"During the first five months of this year, our stores saw a 120% increase in theft incidents involving violence or threats of violence," Cornell said.
Dick's also announced that it cut an unspecified number of jobs at its customer support center on Monday. The company said it expects $20 million of severance expense in the third quarter.