The financial numbers Dick’s Sporting Goods are looking really shakey, and according to the retail giant, you can blame slow sales and people going into the store using their five-finger discount.
Spotted on CNBC, Dick’s Sporting Goods’ current outlook isn’t looking too rosy. The company reported on Tuesday, August 22, a 23% drop in profits and will be slashing its earning guidance for the year. As far as the culprit for the chain’s financial woes, Dick’s blames it on lackluster sales and the uptick in retail theft.
For the first time in three years, Dick’s fell short of Wall Street’s estimates on the top and bottom lines. It also announced cuts to its global head count. The company’s shares opened about 24% lower.
- Earnings per share: $2.82 vs. $3.81 expected
- Revenue: $3.22 billion vs. $3.24 billion expected
The company’s reported net income for the three-month period that ended July 29 was $244 million, or $2.82 per share, compared with $318.5 million, or $3.25 per share, a year earlier.
Sales rose to $3.22 billion from $3.11 billion a year earlier.
Shrink Is Hurting Dick’s Sporting Goods
The website further reports that shrink (retail jargon for theft) is part of why the company decided to lower its profit forecast for the year, which it hasn’t done in 20 years.
In a news release, CEO Lauren Hobart said, “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. Despite moderating our 2023 EPS outlook, the enthusiasm we have for our business and the confidence we have in our long-term growth opportunities have never been stronger.”
The company also notes the slowdown in sales regarding its outdoor category, hinting at people not being in the mood to cop camping gear and other items to enjoy the great outdoors.
The next step after these moves are store closures. Will Dick’s suffer the same fare as Foot Locker, which is expected to close 400 locations by 2026?
We shall see.
Photo: Spencer Platt / Getty
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