Dick’s Sporting Goods Layoffs Number Hundreds As Business Claims Theft Hampered Revenue

3 min readAug 23, 2023

Key takeaways

Dick’s has laid off 250 workers, primarily in its call center
The news came as part of the retailer’s earnings beat, which recorded a 23% drop in profits
Dick’s shares were down 21% on Tuesday

Popular retailer Dick’s Sporting Goods has had a bad week. As well as confirming it’s laid off hundreds of staff, the company’s meagre earnings beat resulted in the stock plunging. The business claims retail theft is on the rise, which other big names are reporting. Here’s the latest.

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What’s happened at Dick’s?

Bloomberg first reported that sports retail chain Dick’s Sporting Goods has laid off around 250 employees. The job cuts will be used to strengthen hiring in other parts of the business; retail positions apparently haven’t been affected. As of January, Dick’s employed nearly 53,000 full and part-time workers.

Dick’s confirmed the news as part of its earnings report, with the positions primarily affecting the company’s customer support center. As a result, Dick’s now expects to incur around $20 million in severance expenses in the third quarter, but that cost savings “are expected to be largely offset by strategic talent investments over the next twelve months”.

How was the company’s earnings beat?

Dick’s Sporting Goods reported adjusted earnings per share of $2.82 for the second quarter, well below analyst expectations of $3.81. While revenue was up 3.6% to $3.22 billion, the retailer has downgraded its full-year estimate to a profit of $11.40 to $12.30, disappointing investors.

Given the company has performed well in the last few quarters, the first miss was a blow to Wall Street. Shares in the company fell 21% in premarket trading on Tuesday.

The company blamed higher levels of retail theft, also known as “shrinkage” in the industry, as the reason for its reduced profits. It’s not the only retailer to have the issue: Target has previously warned retail theft could cost the business $500 million this year.

The bottom line

The double whammy of layoffs and a poor earnings beat with such a significant drop in profit has sparked concern among investors and put Dick’s in the firing line. While the company blamed shrinkage, investors will watch closely to see if the next quarter holds similar results.

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