Sporting goods retailer, Dick’s, announced weak results in the company’s second fiscal quarter, a decline in sales of 4 percent compared to the same period a year ago – and their gun policy is partly to blame.
Over the course of the entire year, the chain expects a drop in sales of between 3 and 4 percent, compared to just a 0.3 percent drop the previous year.
So what is going wrong for Dick’s?
Two things were cited by CEO Edward Stack in a press release.
One, a lower demand for Under Armour products due to their availability at other mid-level department stores played a role as retailers experience lower prices through sales and the use of coupons.
But two, sales also dropped due to Dick’s recent change to its gun sales policy.
— Bloomberg (@business) August 30, 2018
Reuters reported that the company experienced “a bigger-than-expected drop in quarterly same-store sales on Wednesday and forecast further declines this year, hit by tighter gun controls and a drop in Under Armour sales.”
Dick’s went public in announcing that they’d stop selling “assault-style rifles” in their stores shortly after the Stoneman Douglas Valentine’s Day massacre – an unwise emotional reaction to a tragic event.
They also announced that they’d be raising the minimum age to purchase a firearm from one of their stores to 21, and would stop selling high capacity magazines.
It’s not working out so well.
Stack tried to phrase the sales dip as best he could without directly saying the company’s ban on so-called “assault rifles” hurt their bottom line.
“We delivered double digit growth in ecommerce, private brands, and athletic apparel excluding Under Armour,” the CEO stated.
“However, as expected, sales were impacted by the strategic decisions we made regarding the slow growth, low margin [hunting] and electronics businesses, which accounted for nearly half of our comp decline.”
‘Half of our comp decline.’
Seems pretty significant and perhaps not the best business move the company could have made.
“Shocker” -> Dick’s Sporting Goods goes to war with the Second Amendment and they subsequently see sales numbers slide. https://t.co/vFRr61oQP4
— Dan Bongino (@dbongino) August 29, 2018
Stack would doubled down on his company policy by writing an op-ed in the Washington Post in March that said the Second Amendment is not unlimited and America has a gun problem.
He cited an opinion written in the Heller case by the late Supreme Court Justice, Anthony Scalia, landmark decision which held that the Second Amendment protects an individual’s right to possess a firearm.
Scala clarified that, ‘Like most rights, the right secured by the Second Amendment is not unlimited.’
Stack added that it’s “clear we have a problem with the gun laws in this country.”
Stack’s move was widely panned as caving into the political pressure of the day, pandering to anti-gun nuts, and wholly disingenuous.
Now it can be panned as being a really bad business decision too.
Read more at the Political Insider