Dick’s Sporting Goods has a new message about removing firearms from its stores: It’s good for business.
The company first made a splash when it announced it would no longer sell assault-style weapons and would sell only hunting guns—to consumers age 21 and older—in the wake of the school shooting in Parkland, Florida. Gun rights advocates criticized the chain, and many swore to buy their sports gear and apparel elsewhere.
Now Dick’s is expanding the removal of guns from stores with a new message for investors and other stakeholders: The goods that replace guns in stores are better for the bottom line.
Dick’s Sporting Goods announced Tuesday it will remove firearms from 125 of its stores, according to news reports. The move follows the company’s ban on assault-style weapons last year in the wake of the Parkland shooting.
CEO Ed Stack said Tuesday that Dick’s will pull hunting gear from 125 stores starting in around August in response to its slumping sales in those stores, Bloomberg reported, a move that may spread to more stores next year.
The chain’s vocal stand on the issue initially hurt revenue. As we previously reported on PR Daily:
Now Dick’s says its sales have suffered because of the decision.
The Pennsylvania-based retailer earlier reported a third-quarter net sales decline to $1.86 billion from $1.94 billion in the year-earlier period, with adjusted same-store sales down 3.9 percent.
“Sales continue to be negatively impacted by double-digit declines in hunt and electronics,” CFO Lee Belitsky said. “Specific to hunt, in addition to the strategic decisions we made regarding firearms earlier this year, the broader industry has decelerated and remains weak, as evidenced by most recent background-check data” for firearms purchases.
However, CEO Ed Stack says a trial run at 10 stores shows customers are ready to buy items other than firearms.
The change, which affects about 17 percent of the Dick’s chain, follows a trial run last year when Dick’s removed hunting products from 10 of its stores. …
Stack said fourth-quarter sales rose at the 10 stores that pulled hunting, and the locations delivered better margins and foot traffic than when they had guns. For the 125 additional stores, hunting floor space “will be replaced by merchandise categories that can drive growth, each based on the needs of that particular market,” Stack said on the company’s earnings call.
However, shareholders remain unconvinced.
The announcement, coupled with continuing declines in same-store sales, jarred investors. Dick’s shares fell as much as 11 percent, the most since August 2017, to $34.45 in New York trading. The stock was up 25 percent this year through Monday.
The skepticism is in part because of a shaky 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 news received both cheers and jeers online:
“The CEO signed a letter last month backing a federal bill extending background checks, the network noted, and recently joined the Everytown Business Council for gun safety.” This @MomsDemand volunteer Thanks @Dicks 👏 https://t.co/bpR3xq3fCs
— Heather Fx Calls BS (@winterpersists) March 13, 2019
Some great news:
Dick's Sporting Goods will no longer be selling guns at its 125 locations.
— Ricky Davila (@TheRickyDavila) March 13, 2019
— mikehanback (@mikehanback) March 13, 2019
Thank you @DICKS for being an ally in the effort to reduce gun violence.
You responded to tragedy with action & carried out your word.
May other businesses soon follow the path you’ve forged towards compassionate capitalism.https://t.co/rr3uWItNd5
— Ryan Deitsch (@Ryan_Deitsch) March 13, 2019
What do you think of Dick’s new messaging, PR Daily readers?