Dick’s Sporting Goods to stop selling guns in 125 stores
Dick’s Sporting Goods said Tuesday that it’s removing guns from 125 of its stores, further cutting back from the category after the Parkland, Florida, school shooting led to policy changes at the company.
The sporting goods retailer stopped selling guns in 10 stores last year to test how they perform. Now, the store has decided to remove firearms from 125 additional stores after seeing positive sales. Dick’s has over 700 stores in the U.S.
The retailer is planning to regionalize its store strategy by replacing hunting goods where they underperform with better-selling merchandise, like apparel, athletic footwear or outdoor equipment. Dick’s CEO Ed Stack said in Tuesday’s earnings call with analysts that he’s looking into categories that are “based on the needs of that particular market.”
Stack said the changes will be completed late this year and that the company is considering a multiyear initiative depending on how the stores perform.
“If it goes as well as expected, we would probably take another batch of stores next year,” Stack said in Tuesday’s earnings call.
A lackluster earnings report
The announcement came after a dip in fourth-quarter sales and a soft profit forecast Tuesday morning sent Dick’s stock tumbling. Shares in the sporting goods store fell 11.2 percent in Tuesday trading to close at $34.61.
Dick’s reported net income of nearly $103 million, down from $116 million the year before. The report met Wall Street expectations of $1.07 earnings per share, according to analysts surveyed by Zacks Investment Research.
The Coraopolis, Pennsylvania-based company also posted revenue of $2.49 billion in the period, exceeding Street forecasts. Seven analysts surveyed by Zacks expected $2.48 billion. But that was down from $2.66 billion a year earlier.
Regardless, sales at stores opened at least a year, a key measure for retailers, fell just over 2 percent.
Drag from firearms business
Stack made a public decision to stop selling guns to customers under 21 and to stop selling assault-style weapons after the Parkland high school shooting last February. The store had legally sold a shotgun to Parkland school shooter Nikolas Cruz in 2017, although the particular gun wasn’t used in the shooting.
The new company policy sparked a backlash from gun advocates among its consumers, making the already flagging sector a drag on the retailer. In its annual earnings report, the company noted that its hunting and electronics categories together led the drop in same-store sales.
“If they were to remove the hunting category, they would not lose as much as they would gain in other categories,” said Joseph Feldman, senior managing director at Telsey Advisory Group.
Dick’s also said it’s planning to enhance store experiences and focus on online sales.