**Dick’s Sporting Goods reported a rise in its second-quarter sales, driven by comparable-store growth. However, its profits were affected by inventory shrinkage.**
**Key Highlights:**
* Comparable-store sales jumped by 10.6% year-over-year.
* Total sales climbed by 8.7% to $3.4 billion.
* Net income decreased by 11.6% to $344.3 million.
* Earnings per share fell by 12.5% to $1.86.
**Analysis:**
Dick’s Sporting Goods attributed its sales increase to strong demand for sporting goods and activewear. The company experienced growth across all of its major categories, including apparel, footwear, and equipment. However, this growth was offset by a rise in inventory shrinkage, which refers to the loss of inventory due to theft, damage, or administrative errors.
The company reported $344.3 million in inventory shrinkage for the quarter, compared to $235.4 million in the same period last year. This increase was driven by both internal and external factors, such as increased organized retail crime and supply chain disruptions.
Dick’s Sporting Goods has taken steps to address the issue of inventory shrinkage, including implementing new security measures and improving its inventory management processes. The company expects the inventory shrinkage rate to improve in the second half of the year.
**Outlook:**
Dick’s Sporting Goods maintained its full-year guidance, despite the impact of inventory shrinkage on its profits. The company expects comparable-store sales to rise by 6% to 8% and total sales to increase by 7% to 9%. The company also anticipates that its gross margin will improve in the second half of the year as the inventory shrinkage rate declines.
**Conclusion:**
Dick’s Sporting Goods delivered strong sales growth in the second quarter, driven by consumer demand for sporting goods. However, the company’s profits were impacted by inventory shrinkage. The company has taken steps to address this issue and expects the inventory shrinkage rate to improve in the second half of the year..
