DICK’S Sporting Goods CEO Edward Stack made a blunt admission in a Q4 earnings call after the retailer saw a deeper-than-expected sales decline. In the wake of the decision to pull assault-style rifles at all 35 Field & Stream stores, Stack said “the announcement we made two weeks ago regarding our firearms policy is not going to be positive from a traffic standpoint and a sales standpoint.”
The retailer stopped sales of the assault-style rifles after the Feb. 14 Parkland, Fla. high school shooting in which 17 people were killed.
Stack indicated that it’s “too early to tell” exactly how the ban will impact the business in the long haul, and that more will be known after Q1 2018. The retailer actually saw a 3.7% increase in foot traffic nationally the weekend after announcing its decision compared to the weekend before, according to data from Reveal Mobile, which tracks location data on mobile devices.
But in the call, Stack revealed “some of those customers that buy firearms buy other things also. And we’ve had some pushback and we knew that that was going to happen, and we try to have that in our guidance.” Stack noted that some people upset with the decision simply won’t shop at DICK’S altogether.
Stack anticipates 2018 same-store sales will be flat to down a low-single digit percentage, which would be worse than the 0.3% decline the retailer experienced in 2017.
DICK’S was one of the first major retailers to take a firm stance on gun sale age restrictions, raising the minimum age for purchase to 21. Walmart, Kroger and other retailers such as REI, Mountain Equipment Co-Op and L.L.Bean followed shortly thereafter with similar decisions.
Despite being the clear national sporting goods leader following Sports Authority’s demise, DICK’S has been unable to capitalize on its pole position. The retailer has struggled with many of the same issues department stores have, particularly when it comes to redundant product offerings, excess inventory and deep markdowns. On top of that, the retailer competes with the major brands it sells, with Nike, Under Armour and Adidas all selling through direct-to-consumer channels.
Q4 revenues of $2.66 billion fell short of projections for $2.74 billion, while same-store sales fell 2%. Analysts had estimated a drop of 1.2%, according to Consensus Metrix. E-Commerce sales rose 9% in Q4.