Losses Arising From Organized Crime Reach New High for Nordstrom and Dick’s Sporting Goods — Retail Bum

Nordstrom has become the latest retailer to call out the losses arising from theft at its physical stores, just days after Dick’s Sporting Goods lowered its profit guidance in light of the problem.

The rise in shrink, which retailers refer to as losses arising from shoplifting, employee theft, and damaged goods, has become a big enough problem that retailers are starting to lose millions of dollars in stolen merchandise, which is then illegally resold by bad actors.

While Nordstrom noted that the losses are within its annual forecast, other players such as Dick’s Sporting Goods and Ulta Beauty are observing a bigger hit to their business.

“Our [second-quarter] profitability was short of our expectations due in large part to the impact of elevated inventory shrink, an increasingly serious issue impacting many retailers,” Dick’s Sporting Goods CEO Lauren Hobart said.

The Pittsburg-based company now expects its earnings per share for the fiscal year to be 12% below its previous estimates. Meanwhile, beauty retailer Ulta Beauty noted that the rise in shrink was a prime reason why its gross margins were down in the most recent quarter compared to the same period a year ago.