**Dick’s Sporting Goods Raises Q2 Sales, but Inventory Shrinkage Dampens Profits**
* Revenue climbed 11.8% to $3.1 billion, surpassing analyst expectations.
* Comparable store sales grew 11.4%, driven by strength in categories like golf, hunting, and fishing.
* Gross margin declined slightly due to higher inventory costs and markdowns.
* Net income fell 36.5% to $130.2 million, impacted by inventory shrinkage and supply chain disruptions.
Dick’s Sporting Goods reported a solid second quarter, with sales exceeding expectations despite ongoing challenges related to inventory shortages and rising costs. The company’s focus on outdoor and sporting categories proved successful, driving comparable store sales higher.
Total revenue for the quarter ended July 30, 2023, reached $3.1 billion, marking an increase of 11.8% compared to the same period last year. This performance surpassed analysts’ estimates of $3.03 billion.
Comparable store sales, a key indicator of retail health, grew by an impressive 11.4%. This growth was fueled by strong demand for outdoor activities such as golf, hunting, and fishing. The company also saw positive results in its footwear and apparel categories.
However, the company faced margin pressures due to higher inventory costs and the need for markdowns to clear excess inventory. As a result, gross margin declined slightly to 29.1% from 29.6% in the previous year’s quarter.
The impact of inventory shrinkage and supply chain disruptions further weighed on Dick’s Sporting Goods’ profitability. Net income for the quarter plunged by 36.5% to $130.2 million, or $1.30 per diluted share, compared to $206.2 million, or $2.05 per diluted share, in the prior-year period. This decline fell short of analysts’ expectations of $1.39 per share.
CEO Lauren Hobart acknowledged the challenges but expressed confidence in the company’s long-term prospects: .
