DICK’S SPORTING GOODS’ RETAIL SHRINK: PROFIT OR A PLOY?

Dick’s Sporting Goods (DSG) had performed well below midyear 2023 expectations. CEO Lauren Hobart publicly stated that the below par performance was due to excessive retail shrink. And yet, while other retailers, like Target and Walgreens, had also issued warnings about the impact of retail shrink on their businesses, DSG was the first to formally declare that this activity had a significant impact on company profitability. Some analysts called the CEO’s statements blaming poor performance on retail shrink into question. The issue was whether DSG had been honest about the impact of retail shrink or had the company attempted to conceal other worrisome business issues from the public eye.