Shares of sports equipment retailer Dick's Sporting Goods (DKS) -) got a nice bump Tuesday after the company raised its holiday quarter expectations.
The company's stock faced an uphill climb following its previous earnings call after Dick's cut its full year outlook due to growing concerns about the effect organized retail theft was having on its bottom line.
Related: Home Depot jumped down retail theft rabbit hole and found a surprising perpetrator
Dick's wasn't the only one, as big name retailers like Target (TGT) -) and Walmart (WMT) -) also used their earnings calls to express concern about the effect these brazen, store-hour robberies were having on the safety of their employees and shoppers as well as the bottom-lines of their businesses.
"While we posted another double-digit [earnings before taxes] margin, our Q2 profitability was short of our expectations due in large part to the impact of elevated inventory shrink (industry term for theft)," CEO Lauren Hobart said in August.
The company said at the time that "organized retail crime and theft in general" was responsible for a 23% drop in profits, leading Dick's to slash its full year outlook.
Dick's retail theft problem
But three months later, the company has changed its tune after topping Wall Street earnings and revenue estimates, raising full-year profit expectations. But retail theft remains a concern as "organized retail crime and our ability to effectively manage inventory shrink" remain an issue for the company.
That risk factor was made more clear in the latest video showing just how brazen and comfortable thieves have become stealing large amounts of goods from the retailer.
Police in San Jose, Calif. are looking for as many as 13 suspects who were filmed ransacking a large Dick's in the area. The thieves can be seen grabbing everything they could their hands on in the store, even making contact with a store employee who stands by helplessly as they make their escape.
San Jose police are searching for as many as 13 suspects tied to a Sunday night robbery at the Dick's Sporting Goods store on Blossom Hill Road. https://t.co/qv3w1GHPHp pic.twitter.com/Fxd9YtbsnC
— NBC Bay Area (@nbcbayarea) November 21, 2023
Retailers fight back
Earlier this month, Target CEO Brian Cornell said his company's antitheft measures — like placing its most-vulnerable items behind security glass — has helped it curb the problem, which has seemed intractable until now.
More than just being the result of individuals looking for an easy score, organized retail theft has become big business, with the retail industry suffering losses of $112.1 billion in 2022, according to the National Retail Federation.
Earlier this year, an investigation in Florida nabbed Robert Dell, a pastor who ran a drug recovery program in Tampa, Fla. A seven-month investigation showed that he was allegedly behind an organized retail-crime ring that sold $3 million worth of merchandise through an eBay account since 2016, according to the Wall Street Journal.
The 57-year-old Dell has pleaded not guilty to the charges, but law enforcement officials say that he has been working as a fence, or middleman, who buys stolen goods and resells them for a profit. The Journal reported that Dell told the vulnerable people in his recovery program to steal tools like drills and pin nailers from Home Depots all over Florida so he could resell them online.
Dell reportedly paid the thieves between $5,000 and $10,000 a day.
Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
