DICK’S Sporting Goods will remove gun and hunting departments from 440 of its 726 locations stores in 2020. The decision comes after a successful holiday season that saw comparable sales jump 5.3% and e-Commerce sales climb 15%, while earnings and revenue topped analyst estimates.
The retailer first decided to stop selling assault rifles at its 35 Field & Stream stores following the Parkland, Fla. school shooting in February 2018. The company also pulled high-capacity magazines from stores and halted the sale of firearms to anyone under age 21. The retailer has considered halting gun sales across its entire operation: Dick’s pulled hunting products out of 10 stores in fall 2018 as a test, and expanded the experiment to another 125 locations in 2019.
Ed Stack, CEO of DICK’S Sporting Goods, has stood by these decisions, pointing out during a 2019 NRF Big Show session that the original ban was “not a tough decision…The right decisions are never tough decisions.”
The move did have short-term negative consequences — 65 employees quit immediately in protest, and more followed in later weeks, according to Stack. Sales also dropped in subsequent quarters, as the company had predicted they would. The retailer actually destroyed approximately $5 million worth of rifles in inventory to make sure they didn’t get back on the market.
But the retailer has since bounced back in a big way, seeing Q4 2019 revenue grow 4.7% to $2.61 billion, topping Refinitiv estimates of $2.57 billion. Adjusted earnings per share reached $1.32, better than the anticipated $1.22 per share. The adjusted earnings include a $48.8 million pre-tax restructuring charge for the hunting category removal.
For 2020, DICK’S Sporting Goods expects earnings of $3.60 to $4 per share and same-store sales that will range between flat and a 2% increase.
The sporting goods retailer is actively replacing the areas where it used to sell guns and other hunting gear with higher-margin inventory for team sports, seeking to draw more parents and their children to stores. It also has been investing more in its private labels, particularly for women, in a hunt for growth.
DICK’S isn’t the first retailer to halt gun sales. In August 2015, Walmart announced it would no longer sell assault-style rifles in its U.S, stores, but the company attributed the decision to lower consumer demand for the weapons rather than any political stance.