Dick's Sporting Goods CEO expects to lose customers over gun stance

Dick's Sporting Goods

Dick’s Sporting Goods CEO Ed Stack said it’s “too early to tell” how the company’s decision to pull assault rifles from stores will impact the company’s financial performance over the long term, but it won’t be good.

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“The announcement we made two weeks ago is not going to be positive from a traffic and sales standpoint,” Stack told analysts and investors Tuesday during a conference call.

The Pittsburgh-based company was one of the first major retailers to take a firm stance on gun age restrictions, raising the minimum age for purchase to 21, following a deadly Valentine’s-Day shooting in Parkland, Florida. Walmart, Kroger and other retailers followed shortly thereafter with similar decisions.

“We were actually surprised at the outpouring of support we received from this,” Stack said. But there’s also been some pushback.

“Some of those customers that buy firearms [from Dick’s] buy other things also,” Stack explained, and those people might stop shopping there altogether if they don’t agree with the retailer’s new policy. “We knew this was going to happen.”

In turn, the company said it’s tried to consider lost sales within the hunting category when calculating its outlook for 2018.

Dick’s is calling for same-store sales for the full year to be flat to down a low-single digit percentage, which would be worse than a decline of 0.3 percent in 2017.

Stack said the company will be able to give analysts and investors a better idea by the end of the first quarter of how the company’s stance on guns impacts its business.

A partnership with Under Armour meanwhile has been cited as another weakness for Dick’s of late. It’s one reason Dick’s is investing more heavily in private-label lines, such as Second Skin.

CEO Stack said Tuesday that the athletic apparel retailer’s decision to distribute its merchandise broadly — for example, its partnership with Kohl’s — has hurt Under Armour’s sales.

“I think Under Armour will come back,” he said. “I think Kevin [Plank] and the team are focused on fixing the business.”

Dick’s also on Tuesday reported disappointing sales for the holiday period. Its shares were down more than 5 percent by mid-afternoon on the news.

Source: CNBC