You could even bring it up indirectly by playing a game and then start to look for one of the missing characters, or have your wife look for it and then let her tell you off cuz shit keeps going missing in the house. You can then both watch him and observe how he reacts.
The other important thing mentioned by some others here is what your friends financial status is like. Is he on drugs, does he have an alcohol problem, is he out of a job...? If he is having financial problems, maybe a group of friends need to speak to him and see if you can help him. However, if this is something he just does then I would think twice about having him as a friend. From my experience, people who start stealing small, often get more confident and start stealing more.
Eitherway, if that was my friend, I would create a scenario whereby a group of us might be together and I would for example bring up having the best AMIIBO collection or something and then say "shit, 4 of them have gone missing." then have other friends who have had shit stolen do the same. If your friend is intelligent enough he will know he has been caught and from there it is up to you if you wish to keep having him over or to just slowly cut ties.
It's a difficult one and I had this situation. My friend was nicking rare collectible DVDs from me. Whenever he then asked to pop over I would just say let's go out instead or let's go to yours etc. In the meantime I moved all my collectible stuff and video games to my bedroom so when he did come over he had zero access to it. From there, it was my friend who actually cut the ties. I found out he found a new guy to chill with and he apparently got caught there to, but there he lucked out as the guy made him sell his cellphone and buy back all the things he took. He used a hidden nanycam and caught him in the act.
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