My daughter is 16 and got caught shoplifting, how should we handle this? 

Not to worry.  First offenders are usually in the best position to resolve their cases favorably as up till now in their life, they have obeyed the law.  In most states there are first time offender programs that permit first time offenders to do diversion classes whereby the charges against them will be dismissed upon successful completion of the classes.  Assuming the amount of the items were less than $1000 the court should permit her to do some type of classes or community services to not have this go on her record.  I suggest that you hire a lawyer if you can afford one.  I also suggest that your daughter return the items from the store or pay the amount of the items taken.  This way you can show that the store has been made whole.  having a lawyer is a good investment as the lawyer can likely get your daughter a good disposition being that she is a student athlete and a good student.  Hiring a lawyer is a good investment here.  If you cannot afford one, go to court with your daughter and ask for a diversionary program and pay the store back.