**Dick’s Sporting Goods reported a solid second quarter on Thursday, with sales increasing despite a hit to profit from inventory shrinkage..
The sporting goods retailer said net sales for the quarter ended July 30 rose 7.8% to $3.28 billion, beating analysts’ expectations of $3.24 billion. Comparable store sales also grew by 7.8%, exceeding estimates of a 5.3% increase..
However, Dick’s Sporting Goods’ gross margin declined by 190 basis points to 28.6%, primarily due to higher markdowns and increased freight costs. The company also faced challenges from inventory shrinkage, which reduced its gross profit by approximately $40 million..
As a result, the retailer’s net income fell 6.8% to $245.1 million, or $2.60 per share, missing analysts’ consensus of $2.74 per share..
Despite the profit decline, Dick’s Sporting Goods remains optimistic about its long-term prospects. The company reaffirmed its full-year guidance, expecting net sales to grow in the low-to-mid single digits and comparable store sales to increase by around 5%. It also anticipates gross margin to remain under pressure due to inflationary headwinds and inventory shrinkage..
