Dick's Sporting Goods CEO expects to lose customers over gun stance
- Dick's Sporting Goods says it's "too early to tell" how the company's decision to pull assault rifles from stores will impact sales.
- Already, though, CEO Ed Stack says it won't be positive.
- The company is calling for same-store sales to decline as much as a low-single digit percentage in 2018.
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 affect the company's financial performance over the long term, but it won't be good.
"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 said, and those people might stop shopping at Dick's 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 has 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 affected its business.
A partnership with Under Armour has been cited as another weakness for Dick's because the apparel maker is expanding its connections with other retailers, including at lower-price Kohl's. It's one reason Dick's is investing more heavily in private-label lines, such as Second Skin.
Stack said Under Armour's moves have hurt its sales.
"I think Under Armour will come back," he said. Referring to UA CEO Kevin Plank, Stack added, "I think Kevin 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 3 percent by afternoon trading.