While some retailers are ailing from lower revenue, Dick's Sporting Goods has been growing on that front in recent years. Even so, President and CEO Lauren Hobart pointed out a downside, explaining that both the chain and the industry are struggling with the "increasingly serious issue" of retail crime.
For the first time in about two decades, Dick's management — now led by Hobart — cited so-called "shrink," or retail theft and loss, as a factor in its financial results. Her declaration was soon followed by others in the sector, who echoed their concern.
For shining a spotlight on how retail crime is affecting the profits of users of retail properties, Hobart is the Person of the week.
WHO: Lauren Hobart, president and CEO, Dick's Sporting Goods.
STREET CRED: Neil Saunders, managing director of GlobalData, doesn't mince words when he critiques a company, but he's been steadfast in his admiration for Hobart and Dick's, particularly regarding the second quarter. "These are solid numbers that make Dick’s one of the continued winners in retail," Saunders wrote in a note last week. "This is especially so since second quarter sales are up by an impressive 42.7% since pre-pandemic 2019. Over this time, Dick’s has increased its share of spending and customers across almost all the sporting categories it operates in."
That said, the slight slowdown in Dick's growth is a barometer — "another piece of evidence," as Saunders described it — that suggests consumer spending is under pressure, even for the best retailers.
WHAT HAPPENED? Dick's said retail theft contributed to a roughly 23% drop in profits.
Hobart said theft had a meaningful effect not only on Dick's second-quarter results but on its earnings expectations for the rest of the year. Illustrating the extent of the issue, a New York Post story on Dick's earnings included a photo of a former local official in Oyster Bay, New York, walking out of one of the chain's stores with golf clubs that he was later charged with stealing.
WHY IT MATTERS: Retail theft has been a growing concern for chains such as Walmart and Target for quite some time, and they've been vocal about the problem. The National Retail Federation, or NRF, an industry trade association, has been fervently lobbying to get federal legislation passed to try to curtail organized retail crime. The topic came up on the recent earnings calls of both giant discounters Walmart and Target. But Hobart made national headlines when she called theft out as a factor that was materially hurting Dick's bottom line. The news highlighted the growing prevalence of retail theft and its effect on the industry. NRF estimated that when taken as a percentage of total retail sales in 2021, retail theft accounted for $94.5 billion in losses.
Editor's Note: CoStar News has launched a feature called Person of the Week, highlighting someone whose actions, statements or issues affected the commercial real estate industry. If you'd like to nominate someone for consideration, please email news@costar.com.