Dick’s Sporting Goods blamed organized retail crime as the reason for the company’s profits sinking nearly 25 percent last quarter. The sports retailer is the latest of many corporations facing a concerning number of thefts across the country.
According to the New York Post, the retail chain reported a 23 percent drop in profits in the second quarter of 2023, across more than 700 stores nationwide. Sales, however, have risen 3.6 percent.
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The company blamed their poor earnings on “shrink” –an industry term that refers to merchandise that goes missing due to theft, fraud, damage, accounting errors or other reasons. Although other national retailers have been warning investors about growing theft, Dick’s is the first company to primarily blame theft for its profit drop.
Dicks Sporting Goods plummet.
Shoplifting up. Margins down.
Consumer tapping out. pic.twitter.com/6blHUX3rp3— adl0107 🇺🇸 (@adl0107) August 22, 2023
“Our [second quarter] profitability was short of our expectations due in large part to the impact of elevated inventory shrink, an increasingly serious issue impacting many retailers,” CEO Lauren Hobart said in a statement.
The retailer announced it expects its earnings-per-share for the year to come to 12 percent below its initial forecast. There is no word yet as to whether the crime will slow down but industry watchers state that “the health of the economy, plus persistent inflation and rising borrowing costs have become more prevalent.”
Rising theft from organized crime is also weighing on Macy’s. The retail giant reported declining sales in June and warned that more shoppers are late on their credit-card payments.
“We expect the pressures consumers are under to continue through the balance of the year,” said Macy’s Chief Executive Jeff Gennette. “Consumers still have good savings, but they are being more judicious in how they spend – more of their money is going to services and experiences.”
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