Dick’s Sporting Goods seemed to think they finally had everything under control after their recent “assault weapons” announcements. After stopping sales of AR-15 style firearms they publicly announced their intention to destroy all of their remaining stock rather than selling it off to another vendor. They next doubled down by hiring a gun control lobbyist to work for them. Surely that would make all the hunters and sport shooting enthusiasts who frequent their stores happy, right? I mean, what could possibly go wrong?
They’ve found the answer to that question. This month they were forced to announce to their shareholders that gun sales had tanked and were not expected to recover any time soon… for some mysterious reason. (Business Insider)
Dick’s Sporting Goods decided to stop selling assault-style weapons after the tragic school shooting in Parkland, Florida. But cutting the product from its shelves has proven to be a drag on its business.
After the February shooting, Dick’s Chairman and CEO Edward Stack announced the company would stop selling assault-style rifles…
The sporting goods retailer showed a splendid first-quarter 2018 earnings report Wednesday, sending the stock up more than 20%, but gun sales weren’t a part of that success.
“Our firearms policy changes impacted our hunt business which saw an accelerated decline,” chief financial officer Lee Belitsky told analysts on the company’s conference call. “We expect these businesses to remain under significant pressure throughout the remainder of the year.”
Other aspects of their business are still doing well enough for overall profits to rise, but they’re just not moving anywhere near as many firearms (of any type) compared to previous quarters. Shareholders probably won’t be all that put off since a positive number is always better than a negative one. But Dick’s is still leaving money on the table here. How much better would their overall profit picture be if they’d stood their ground and continued selling the full range of guns rather than choosing to take a side in an ongoing political debate? (And it was clearly the wrong side for their target audience if you’ll pardon the phrase.)
If the store had decided to quietly discontinue carrying these weapons after the current stock sold out they might not have had this much of a problem. Yes, some people probably would have noticed and brought it up in the media, but it could have been framed as a business decision, with Dick’s saying that they felt the popularity of the product was dropping due to media pressure or something like that. Instead, they went in whole hog on the side of the gun control groups and launched a PR campaign to champion their position.
How did they not expect gun owners (and prospective buyers) to see that as a slap in the face? Sadly, Second Amendment rights have turned into a markedly divisive issue in national politics. Both sides are on edge and will likely be set off by any such slight. That’s a lesson that Dick’s is now learning the hard way. It may not put them out of business, but it’s going to be cutting into their bottom line for at least the foreseeable future.