Dick’s Sporting Goods Inc. expects to see a negative impact on sales following its decision two weeks ago to ban assault-style rifles in stores, according to CEO and chairman Edward Stack.
The outdoor and athletic retailer was one of the first major national chains to make adjustments to its gun policy, limiting sales to customers 21 and up as well as pulling assault-style rifles from stores. The move was prompted by the Feb. 14 massacre at Marjory Stoneman Douglas High School in Parkland, Fla., where 17 students and teachers lost their lives to alleged gunman Nikolas Cruz, who was 19 years old.
In a conference call addressing the company’s latest earnings report, Stack reiterated that the firearms policy change was not insignificant.
“Although [the response] has been overwhelmingly positive, there has been some negative pushback on this,” he said. “Some of those customers that buy firearms [from Dick’s] buy other things also. We’ve had some pushback, and we knew that was going to happen … There’s going to be people who just don’t shop us anymore for anything.”
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The company also provided analysts and investors a look at its fourth-quarter and full-year reports. Although holiday earnings slightly topped analysts’ expectations, Dick’s noted a drop of 2 percent in same-store sales. Revenue came in at $2.66 billion, which fell short of analyst expectations.
Dick’s announced net income at $116 million, or $1.11 per share, for the quarter ended Feb. 3. The figure compares with last year’s $90.2 million, or 81 cents per share. Excluding one-time items, earnings were $1.22 a share.
Despite the deeper-than-expected decline, Stack explained in a statement that the company’s move toward innovation will boost profitability this year.
“During 2017, we made significant progress on key priorities as we grew both our online and private brand businesses to over 1 billion dollars in sales,” he said. “In 2018, we expect stronger product innovation from select key partners and the continued expansion of our private brands to result in less margin pressure than previously expected.”
In its release, the company added that it will no longer provide a quarterly outlook “to more closely align with industry practices.” Dick’s also made public its intention to open about 19 stores this year, with eight scheduled for the first quarter.
Dick’s shares were down slightly at 1:45 p.m. EST, declining 1.6 percent to $32.05.
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