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Dick’s Sporting Goods to remove even more guns from shelves

UPDATED: Tue., March 12, 2019

In this March 1, 2018 photo, a sign for Dick’s Sporting Goods at the store in Madison, Miss. (Rogelio V. Solis / Associated Press)
In this March 1, 2018 photo, a sign for Dick’s Sporting Goods at the store in Madison, Miss. (Rogelio V. Solis / Associated Press)
By Eben Novy-Williams Bloomberg

Dick’s Sporting Goods Inc., which began scaling back gun sales in the wake of last year’s school shooting in Parkland, Florida, is removing even more weapons from its shelves.

The retailer will drop hunting gear starting around August from about 125 stores where it is underperforming, Dick’s Chief Executive Officer Ed Stack announced Tuesday. The change, which affects about 17 percent of the Dick’s chain, follows a trial run last year when Dick’s removed hunting products from 10 of its stores.

The announcement, coupled with continuing declines in same-store sales, jarred investors. Dick’s shares fell as much as 11 percent, the most since August 2017, to $34.45 in New York trading. The stock was up 25 percent this year through Monday.

Stack said fourth-quarter sales rose at the 10 stores that pulled hunting, and the locations delivered better margins and foot traffic than when they had guns. For the 125 additional stores, hunting floor space “will be replaced by merchandise categories that can drive growth, each based on the needs of that particular market,” Stack said on the company’s earnings call.

The new approach follows a tightening of gun policies that Stack self-imposed in February 2018. After the deadly shooting in Parkland, Stack said that he’d stop selling assault-style rifles and high-capacity magazines. He also raised the minimum age for purchasing a gun to 21.

The decision drew anger from many who felt the it contradicted the Second Amendment. The National Rifle Association criticized Stack’s “strange business model,” and the National Shooting Sports Foundation expelled Dick’s from its membership. Dick’s was once a major vendor of firearms in the U.S., and though the industry was struggling before the decision, Stack has made it clear that the blowback hurt sales.

Still, Stack said, if this 125-store move goes well, the company could decide to remove hunting gear from more stores next year.

The company’s 2018 revenue was down almost 2 percent to $8.4 billion, a dip that Stack has attributed to slower firearm sales, a change in Under Armour’s distribution strategy and a weak performance in electronics sales. Stack has expressed optimism about Under Armour going forward, and Dick’s has now fully exited the electronics business.

Last month, Stack was one of four CEOs to sign a letter supporting a universal gun control bill that recently passed in the U.S. House of Representatives, and he recently joined the business council of Everytown, a nonprofit that advocates for gun control. (Everytown was founded by Michael Bloomberg, owner of Bloomberg News’ parent company.)

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