Dick’s Sporting Goods reported a 23% drop in profits and slashed its earnings guidance for the year after it saw an uptick in retail theft and slow sales in its outdoor category, the company announced on Tuesday.
In a rare miss for the athletic apparel retailer, Dick’s fell short of Wall Street’s estimates on the top and bottom lines and announced cuts to its global headcount. Shares fell about 20% in premarket trading.
Here’s how the company did in its second fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
- 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.
The company lowered its profit forecast for the year in part because it expects shrink, a retail industry term that refers to inventory lost by theft or internal issues, to get worse before it gets better.
“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,” CEO Lauren Hobart said in a news release. “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.”
Dick’s now expects earnings of $11.33 to $12.13 per share for the year, compared to a previously issued guidance of $12.90 to $13.80. It reaffirmed its comparable store sales forecast of flat to up 2% and isn’t cutting its planned capital expenditures. Despite the profit loss during the quarter, the retailer still expects gross margins to increase for the full year compared to 2022.
The reference to shrink is the first that Dick’s has made in an earnings call or press release in…
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