by Emily Zanotti, Daily Wire:
Dick’s Sporting Goods is warning investors that its decision to remove certain “assault-style” weapons from its Field & Stream stores cost it dearly and may limit its future gains.
The sporting goods retailer was forced to confront angry shareholders late last week after its stocks tanked more than 4.5% and financial conglomerate J.P. Morgan Chase downgraded Dick’s shares, saying the company was “overweight.”
“Gross margin-driven upside appears less probable given 3Q’s performance, changing comparisons, and rising inventory levels,” an analyst for J.P. Morgan told CNBC. The same analyst noted that same-store sales for Dick’s outlets are expected to grow less than 1% even as the company’s inventory rises.
“The analyst pointed out that Dick’s same-store sales growth for 2019 is expected to be less than 1 percent after averaging 2.1 percent between 2011 and 2015. He also noted that while the company’s 25 percent Black Friday store discount will help boost sales, it will not boost margins,” the analyst continued. “Inventory levels, meanwhile, rose 1 percent in the third quarter after falling 5 percent in the first half of 2018 with inventory days estimated to return back to 2015-2017 levels.”
Dick’s says it can trace the downturn not just to an overall retail downturn, but also directly to its decision to take action on “gun control,” banning the sales of “assault-style” rifles at its Field & Stream affiliated retailer and discontinuing any gun sales to people under the age of 21.
Speaking to USA Today, Lee Bolitsky, Dick’s chief financial officer, called out the company’s gun sales plan directly, but also pointed out that gun sales are down across the board — not just at Field & Stream (largely the result of the Trump administration, which is not the kind of pointed threat to gun rights its predecessor was).
“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 national background check data,” Bolitsky told investors. “We believe this also contributed to the decline.”
But while Bolitsky didn’t come out and say it directly, it seems that Dick’s’ decision to cut down on its gun sales had an impact in other areas of its business. Gun owners and pro-gun consumers may not be ale to buy their guns from Dick’s any longer, but they also seem to have made the conscious decision not to trust Dick’s as an outfitter for any of their other needs — particularly their hunting needs.
Dick’s has seen a decline in sales of its hunting gear overall — such a decline that they’re considering removing hunting and outdoors equipment from all of their stores in order to boost their bottom line and cull some of their excess inventory.
“Months after Dick’s Sporting Goods made the move to stop selling assault-style rifles, the company is now considering removing all hunting gear,” a Texas ABC affiliate reported on Friday. “Dick’s CEO Edward Stack revealed during a conference call that they removed all hunting gear from 10 stores as a test run.”