How Dick’s Sporting Goods’ Controversial Move to Ban Guns Proved Positive for Business

On Dec. 3, Dick’s Sporting Goods will be honored as the Retailer of the Year at the FN Achievement Awards. Below is an article from the magazine’s Dec. 2 print issue about how the retailer’s controversial move to pull guns from its shelves took a positive turn for business.

When Dick’s Sporting Goods initially made the controversial decision last year to pivot away from the firearms market, there were concerns — including from the company itself — that its top line would shoulder some of the backlash.

“When we were thinking this through, it was with the understanding that hunting had been a mainstay of Dick’s business since the company’s earliest days, and we stood to lose a lot of customers who would be upset with us over our decision,” CEO Edward Stack told FN in late November.

But today, roughly 21 months since the deadly shooting at Marjorie Stoneman Douglas High School in Parkland, Fla., that spurred Dick’s gun policy change, the Pittsburgh-based retailer has only strengthened its stance and is reaping the rewards of taking a firm stand.

In its third-quarter financial report posted Nov. 26, the company logged better-than-expected earnings per share of 52 cents, while revenues grew 5.6% to $1.96 billion. Same-store sales also increased 6% — its strongest quarterly comps gain since 2013. The positive numbers led Dick’s to further lift its full-year outlook.

What’s more, in 10 stores where the hunting category had underperformed, the athletic and outdoor chain replaced those items with “more compelling” assortments, including licensed gear and sports products, which it said has led to positive comps and strong margins.

But it hasn’t all been smooth sailing: For decades, Dick’s was one of the largest U.S. firearms retailers, and its new stance on guns undeniably angered some customers who are hunters or collectors.

“Any company that makes a decision like this is going to hit a reputation road bump,” said reputation management expert Andy Beal. “They’re going to get a lot of media attention, critics and people supporting them — but that’s all temporary.”

Roughly 135 Dick’s stores have dropped all hunting-related gear, including assault-style rifles, handguns and ammunition. The firm has also sold to Sportsman’s Warehouse Holdings eight of its Field & Stream stores, which will no longer carry modern sporting rifles.

“As a public company, we had to do our due diligence, so we got our finance group working on it and ultimately concluded that we could survive the blow,” Stack explained. “We’d have to work hard at it, but we thought we could offset the loss by boosting sales in other categories, and we feel optimistic that we’ve been able to do that.”

According to foot traffic analytics firm Placer.ai, Dick’s has seen a 4.5% increase in store visits across the U.S. in the first 10 months of 2019 over the same period in 2018, and an 11.1% spike over the 2017 period. “This shows the strength of the brand to overcome a decision that was initially viewed as a significant risk,” said Ethan Chernofsky, VP of marketing at Placer.ai. “Dick’s is clearly so far ahead of the curve and setting the pace for retail. This is exactly the type of company that deserves some recognition.”

Dick’s is now realigning its focus on other merchandise and departments, including its athletic footwear business. According to Stack, the company has not only made changes to its shoe presentation and content in stores, but it has also put more stock in the running category.

Further, the retailer hosted its debut fashion show in New York less than two months ago. Models, including U.S. soccer star Carli Lloyd and retired baseball great Alex Rodriguez, strutted down the Dick’s runway in athletic footwear brands, such as Vans, Nike, New Balance, Adidas, Reebok and Under Armour, and were clad in popular outdoor silhouettes from Sorel, Timberland, Columbia and The North Face.

“The relationship with the brands is as strong as it’s ever been, and we’re working very well together to provide products that differentiate us in the marketplace,” Stack said. “All in all, our footwear business is working very well, and we’re very enthusiastic about that business going forward.”

The 33rd annual FNAA ceremony will be held at the IAC Building in New York. Sponsors for the event include Klarna, Geox, The Style Room Powered by Zappos, FDRA, Micam Milano and Buchanan’s Scotch Whisky.

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