Dick’s Sporting Goods reported a solid second quarter on Thursday, with comparable sales growth and improving margins, but the retailer’s profits were dented by inventory shrinkage.
**Key Highlights:**
– Net sales increased 8.1% to $3.14 billion, surpassing estimates of $3.10 billion.
– Comparable sales, a key metric for retailers, rose 7.2%, driven by double-digit gains in sporting goods, golf, and fitness equipment.
– Gross margin expanded by 10 basis points to 30.7% due to effective inventory management and higher-margin product sales.
– Operating income declined 13.6% to $264.4 million, primarily due to a $105 million increase in inventory shrinkage. The company attributed the shrinkage to organized retail crime and operational inefficiencies.
– Net income fell 15.7% to $186.8 million, resulting in diluted earnings per share of $1.97, below analysts’ expectations of $2.06.
**Executive Commentary:**
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