Back in February, Dick’s Sporting Goods announced a new gun sale policy. The store would no longer sell guns to anyone under 21 and would also cease sales of AR-15s at their Field & Stream stores. Dick’s then went a step farther in April when it announced it was destroying all existing stock of semi-automatic rifles and selling the remains for scrap. Not surprisingly after these decisions, gun sales dropped at the company’s stores. Wednesday, the Wall Street Journal reported that Dick’s cited the declining sales as one factor dragging their quarterly results down:
Dick’s Sporting Goods Inc. said weaker sales of Under Armour Inc. apparel and a decision to pull back from the hunting business dragged on the retailer’s latest quarterly results.
Comparable-store sales fell 4%, Dick’s said. Not adjusting for the 53rd week last year, the company’s same-store sales declined 1.9%…
Dick’s said part of the company’s sales problems were a result of Under Armour’s decision to sell in more stores including Kohl’s…
Also hurting sales was Dick’s decision to tighten its policy on gun sales after 17 people were killed in a February shooting at a Parkland, Fla., high school. The retailer halted sales of any firearms to people under age 21 at all of its 845 Dick’s and Field & Stream stores and stopped selling assault-style weapons at Field & Stream.
While it would be nice if Dick’s could blame this on a broader pattern of decline in the retail sector, this actually comes at a time when consumer confidence is at a record high and sales at competing chains are up:
The weaker-than-expected results bucked a trend in the retail sector, which largely has benefited from a surge in consumer spending fueled by a booming economy.
Consumer confidence for August, measured by the Conference Board’s consumer-confidence index, was the highest it has been in about 18 years.
That sentiment, along with other factors, has powered companies such as Walmart Inc. and Target Corp. to their best quarterly results in more than a decade.
The company says the Under Armor sales was a larger factor than the gun sales. It also adds that gun sales were a low-margin business which it expects to make up for as that space in its stores is re-allocated to more profitable items.
That remains to be seen. For now, what we can say is that the decision to limit gun sales in response to the Parkland shooting is hurting business at a time when other retailers are doing extremely well. I also wonder to what extent the company’s decision to step into the culture wars has hurt business overall. If a national chain decides to make political statements it’s free to do so, but there are plenty of other places to buy this merchandise.