DICK’S Sporting Goods is doubling down on its decision to tighten gun sales policies. The retailer will no longer sell firearms and select hunting gear at 125 of its 720+ namesake stores after testing the concept in 10 locations last year.
Nearly one year ago, DICK’S CEO Edward Stack admitted that the retailer’s assault rifle ban was “not going to be positive from a traffic standpoint and a sales standpoint.” The retailer stopped sales of the assault-style rifles at all 35 Field & Stream stores and ceased selling guns and ammunition of any kind to buyers under 21 after the Feb. 14, 2018 Parkland, Fla. high school shooting in which 17 people were killed.
DICK’S reported that Q4 same-store sales fell 2.2%, but annual same-store sales were even worse at 3.1%, driven down by weakness in the company’s hunting and electronics departments. In total, the company has seen sales decline for six straight quarters. But Stack noted in the Q4 earnings call that comparable sales, margins and foot traffic rose in the 10 gun-free test stores, convincing the company to remove firearms in markets where the hunting category is already underperforming.
The spaces formerly occupied by guns and hunting gear will be used to sell higher-margin, faster-selling categories such as licensed sports gear and outdoor recreation equipment, Stack said in an earnings call. DICK’S will even use the space to test experiential concepts such as in-store batting cages.
Firearms Sales Slump Across The Board
The decision to clamp down on guns may have driven some consumers away from DICK’S, but gun sales in general appear to be on a downturn anyway, which may reaffirm to the retailer that it is making the right call.
Firearm sales dropped 12.4% year-over-year to 1.1 million units as of February 2019, according to an estimate from Small Arms Analytics & Forecasting.
Last year, American Outdoor Brands Corp., which owns the Smith & Wesson firearms brand, said falling demand for its semi-automatic AR-style rifles caused revenue from long guns to fall 50% to $90 million for the year ended April 30, 2018. The company revealed that it had a net loss of $5.7 million in its latest quarter.
Sturm, Ruger & Co. Inc., a firearms manufacturer, reported a 13.5% drop in net firearm sales for the first six months of 2018. The company doesn’t break down sales by type of firearms, but it does sell AR-15-style rifles.
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