Dick’s Sporting Goods on Tuesday blamed “organized retail crime” for sinking its quarterly profits by nearly 25% — the latest retailer to reel from the growing “epidemic” of thefts around the country.
The popular retail chain reported a 23% drop in profits in the second quarter across its more than 700 stores nationwide — despite sales rising 3.6%.
Dick’s attributed the losses to “organized retail crime and our ability to effectively manage inventory shrink,” an industry term used to describe stolen or lost merchandise.
“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 president and CEO Lauren Hobart said.
Dick’s share price plunged more than 20% after Tuesday’s opening bell.
Hobart referenced organized crime and retail theft in the company’s earnings call with investors on Tuesday, calling it “an increasingly serious issue impacting many retailers.”
She continued: “Based on the results from our most recent physical inventory cycle, the impact of theft on our shrink was meaningful to both our second-quarter results and our go-forward expectations for the balance of the year. We are doing everything we can to address the problem and keep our stores, our teammates and athletes safe.”
Representatives for Dick’s did not immediately respond to The Post’s request for comment.
The Pennsylvania-based chain became the latest major retailer to pin the scourge of brazen robberies for impacting its bottom line. Last week, Target CEO Brian Cornell said shoplifting that included “threats of violence” surged 120% during the first five months of the year.
“Our team continues to face an unacceptable amount of retail theft and organized retail crime,” Cornell said as Target reported its first quarterly sales drop in six years.
The National Retail Federation, the nation’s largest retail trade group, said its latest security survey of roughly 60 retailers found shrink clocked in at an average rate of 1.4% last year, representing $94.5 billion in losses.
“I think retailers are facing a crime epidemic,” Anthony Roman, president of the risk management firm Roman & Associates, told The Post.
“There has been a change in many state laws that have loosened or restricted the prosecution of retail crime and when the criminal element sees that developing they become emboldened.”
The crime wave forced Dick’s to slash its expectations for the year to $11.33 to $12.13 per share — down from its previously-issued guidance of $12.90 to $13.80.
The company reported net income of $244 million, or $2.82 share, for the second quarter — down from the $319 million, or $3.25 a share posted during the same period last year.
Inventory was down about 5% in the quarter compared to the second quarter in 2022.
Dick’s has been a frequent target for shoplifters in recent months.
Just weeks ago, three women swiped $200 worth of merchandise from a Dick’s outpost in Brookfield, Wisc., before fleeing in a Toyota with a license plate out of Texas, according to Fox 6.
In May, Barry Bree, the former deputy commissioner of public safety in Oyster Bay, NY, was arrested and accused of stealing over $1,100 worth of golf clubs from a Dick’s in nearby Melville, News 12 New Jersey reported.
The same month, a Reddit user also took to the platform to share an eyewitness account of a robbery at the sporting goods store’s location in Montgomery County, Md.
“The store alarm went off for a long time and some of the customers around me told me that a guy and a girl had loaded a few carts full of equipment and clothes and then just made a run for it,” the user wrote.
The thieves “pushed them [the carts] out the back door and dumped everything in a waiting getaway car and drove away.”
And back in March, eight shoplifting incidents took place at Dick’s in Pleasant Hill, Calif., over the course of just seven days, according to local news outlet Claycord.
The thefts began on March 2, when a man nabbed five pairs of shoes valued at $740 from the store.
Three days later, another man shoplifted a $1,400 electric mountain bike and fled the scene on the stolen vehicle in the afternoon. Later that evening, a group of men and women scooped up some jackets.
The following day, a woman walked out with a shopping cart full of items she didn’t pay for in the early afternoon, and two men stole items and then returned them for money by late afternoon, according to Claycord.
On March 7 and 8, there were three other instances of shoplifting; and on March 9, a woman snagged some Nike clothing.
Out of the eight shoplifting incidents, only one arrest was made, the news site reported.
Though Dick’s attributed part of its losses to organized crime, the company did not disclose how much of its inventory reduction was directly from theft.
Dick’s CFO Navdeep Gupta told investors that “the number of incidents and the organized retail crime impact came in significantly higher than we anticipated.”
Analysts at CNBC have said that retail crime is a metric that’s nearly impossible to accurately count. Retailers also aren’t required to disclose data related to shoplifting.
The earnings report comes just days after Dick’s laid off about 250 employees from its corporate workforce, a person familiar with the matter told Bloomberg.
The unnamed source said that the cuts took place mostly among the sporting goods store’s customer support jobs, the outlet reported.
Dick’s reportedly has plans to use its 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 were up 1.8% — a big improvement from the 5.1% dip in the year ago period — thanks to a 2.8% uptick in transactions.
And though profits missed ‘ expectations, the retailer’s sales were still up compared to 2019.
Dick’s also opened seven new House of Sports locations during the quarter.
The stores, which are up to 100,000 square feet, combine retail with activities such as climbing walls and driving range simulators.
This story originally appeared on NYPost
