A decision by Dick’s Sporting Goods to tighten its gun policy in the wake of a school shooting in Florida has not hit the company’s bottom — or top — line, according to its latest sales figures and share prices.
The sporting goods retailer’s shares are surging today — up more than 27 percent to $38.80 as of 11:30 a.m. ET — after it posted first-quarter results that largely topped expectations, showing little to no negative impact from limiting gun sales to buyers over the age of 21.
Sales for the period advanced 4.6 percent to $1.91 billion, just above forecasts of $1.88 billion, as softer business for hunting goods and electronics was more than offset by strength in other categories.
Profits climbed 3.3 percent year over year to $60.1 million, or 59 cents per diluted share. On an adjusted basis, profits were 54 cents per diluted share, blowing past several analysts’ estimate of 45 cents per share.
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Nevertheless, the company’s same-store sales dipped 2.5 percent during the period — a steeper decline than analysts had expected. Consensus bets had predicted a 1.4 percent drop.
In the previous quarter, chairman and CEO Ed Stack said he expected the company’s new stance on firearms to have a negative impact on its business in the foreseeable future, because some customers would opt to go elsewhere.
“There has been some negative pushback on this, and some of those customers that buy firearms buy other things also,” Stack said during a March earnings conference call, referencing the company’s then two-week-old firearm policy regarding age.
He added, “We knew that that was going to happen. We tried to have that in our guidance, that there’s going to be people who just don’t shop us anymore for anything.”
But the fiscal year seems to be off to a strong start for the retailer, which today raised its full-year guidance predicting earnings per diluted share in the range of $2.92 to $3.12, compared with its previous range of $2.80 to $3.00.
“Product newness, strength in our private brands and a more refined assortment led to a much healthier business, with fewer promotions and cleaner inventory throughout the quarter,” Stack said. “We are also continuing to see the results of investments in our digital experience, and we will continue to invest as we build the best omnichannel experience for all athletes.”
E-commerce sales increased 24 percent during the first quarter.