Dick’s Sporting Goods CEO Ed Stack said the company’s decision to pull assault rifles from stores will affect the company’s financial performance over the long term due to lower sales and store traffic.
Lauren Thomas of CNBC.com had the news:
“The announcement we made two weeks ago is not going to be positive from a traffic and sales standpoint,” Stack told analysts and investors Tuesday during a conference call.
The Pittsburgh-based company was one of the first major retailers to take a firm stance on gun age restrictions, raising the minimum age for purchase to 21, following a deadly Valentine’s-Day shooting in Parkland, Florida. Walmart, Kroger and other retailers followed shortly thereafter with similar decisions.
“We were actually surprised at the outpouring of support we received from this,” Stack said. But there’s also been some pushback.
“Some of those customers that buy firearms [from Dick’s] buy other things also,” Stack said, and those people might stop shopping at Dick’s altogether if they don’t agree with the retailer’s new policy. “We knew this was going to happen.”
Matt Townsend of Bloomberg News reported that the company’s stock fell as a result:
Only weeks after winning accolades from gun-control advocates for ending sales of assault rifles at its Field & Stream stores, Dick’s posted a deeper-than-expected sales decline. Its stock sank the most in seven months Tuesday in the wake of the quarterly report, which reflected struggles with excess inventory and deep discounting.
The future had appeared bright after Sports Authority collapsed in 2016, leaving Dick’s as the last national chain of its kind. But price cutting by competitors and tepid demand for items like basketball shoes have hammered the stock and put pressure on profit margins.
The company is also facing a threat from Nike, the largest sports brand in the world, which has been pushing more of its customers to its own stores and websites. And Amazon.com Inc. is promoting its own private-label athletic gear. The rapid growth of Fanatics Inc., which sells licensed sports team apparel, isn’t helping either.
Dick’s moved last month to change the gun policy at its three-dozen Field & Stream stores — extending a ban on assault-style rifles already in place at its namesake locations — following a fatal shooting spree at a Florida high school. The company also raised the age limit to 21 from 18 on the purchase of any firearm. But the effect on its business remains to be seen.
Rachel Siegel of The Washington Post reported that Dick’s is suffering more from competitors:
Shortly after Dick’s changed its sales policies, Walmart and Kroger followed suit with new guidelines for the sale of firearms. The retailers joined a cascade of other companies that cut ties with the gun industry or the National Rifle Association after the Parkland shooting.
Lawrence Ring, a professor at the Raymond A. Mason School of Business at the College of William & Mary, cautioned against overestimating the effects of Dick’s new firearms policies on retail sales. Ring, who served on the board of the sporting goods superstore Sportmart in the late 1990s, said Dick’s is more likely to suffer from competition with Walmart, Bass Pro Shops or Amazon.com than from the consequences of its firearm policy change. (Amazon founder Jeffrey P. Bezos owns The Washington Post.)
“It’s really hard to show that [people] buy guns and buy basketballs,” Ring said. “Generally when people come to buy guns, they buy guns and bullets.”
