Dick’s Sporting Goods to remove guns from 125 stores
Retailer says will replace firearms with other sporting gear as it combats sales slump
Dick’s Sporting Goods Inc. said Tuesday it will stop selling firearms at 125 of its stores, further pulling back from the business after the retailer decided last year to tighten its policies around gun sales.
Dick’s has struggled with declining sales since its CEO Ed Stack made a public decision to stop selling guns to buyers under 21 and take assault-style weapons out of all stores after a fatal school shooting in Parkland, Fla. Dick’s is also working to stem sluggish sales as more shoppers buy sporting goods online.
This year Dick’s will remove guns and some hunting gear from 125 locations, after testing the concept in 10 stores last year, Mr. Stack said on a conference call Tuesday. Dick’s had 729 of its namesake locations as of Feb. 2.
The space will be used to sell higher-margin, faster-selling categories such as licensed sports gear and outdoor recreation equipment, Mr. Stack said.
Mr. Stack said Dick’s will remove firearms in markets where the hunting category underperforms. In the 10 gun-free test stores, he said, comparable sales rose in the most recent quarter.
Overall, the company reported a 2.2% drop in quarterly same-store sales.
Since then sales at Dick’s have declined, despite a strong U.S. economy and consumer spend- ing, Mr. Stack has blamed much of the decline on its stance on guns, saying some gun enthusiasts have stopped shopping at the chain.
For the fiscal year ended Feb. 2, same-store sales fell 3.1%. The company said it expects comparable sales to be flat to up to 2% this fiscal year. Dick’s predicted same-store sales will return to growth in the second quarter, but also set annual earnings targets that were below Wall Street’s forecasts.
Dick’s stock fell 9% to $35.24 in morning trading as the broader market was slightly higher. The stock had rallied about 25% since the start of the year.
“The outlook for 2019 seems reasonable,” said Neil Saunders, managing director at GlobalData Retail, but sales weakness “underlines that there is a lot more work to do if Dick’s is to thrive.”
For the fourth quarter, the company posted a profit of $102.6 million on revenue of $2.49 billion. Full-year sales were $8.44 billion, down from $8.59 billion the prior fiscal year, which included an extra week.