**Dick’s Sporting Goods Q2 Sales Surge, but Inventory Woes Dent Profits**
Dick’s Sporting Goods reported a robust 8.1% increase in second-quarter sales, outpacing analyst estimates, driven by strong demand for outdoor and athleisure products. However, the company’s profitability took a hit due to inventory shortages and higher product costs.
**Key Financial Highlights:**
* Net sales climbed 8.1% to $3.26 billion, surpassing the consensus estimate of $3.18 billion.
* Comparable store sales grew by an impressive 7.3%, reflecting increased foot traffic and higher average transaction values.
* Gross profit margin declined by 120 basis points to 30.2%, primarily due to higher product costs and inventory write-downs.
* Net income fell by 26.1% to $114.2 million, translating to earnings per share of $1.23, below the $1.36 anticipated by analysts.
**Operational Performance:**
Dick’s Sporting Goods attributed its solid sales performance to the ongoing popularity of outdoor recreation and the continued strength of the athleisure trend. The company expanded its assortment of exclusive brands and private-label products, which resonated well with customers.
However, the retailer faced challenges in replenishing its inventory due to ongoing supply chain disruptions and increased lead times. This resulted in stockouts of certain high-demand items and contributed to the decline in gross profit margin.
**Inventory Shrinkage:**
Dick’s Sporting Goods also experienced higher-than-normal levels of inventory shrinkage, estimated to be around $40 million. The company attributed this to increased organized retail crime and the challenges associated with inventory management during a period of high turnover.
**Management Commentary:**
Lauren Hobart, President and CEO of Dick’s Sporting Goods, commented on the results, saying, .
