In wake of the revelation that 17-year-old Stoneman Douglas High School shooter Nikolas Cruz purchased a gun (not the weapon used in the school shootings) at Dick’s Sporting Goods, Inc. (DKS), the company has announced that effective immediately it will cease sales of assault-style rifles (aka modern sporting rifles) at all 700+ stores. DKS’ new 4-point policy (also applies to subsidiaries Gold Galaxy, Field & Stream, True Runner and Chelsea Collective) will also prevent the sale of firearms to individuals under the age of 21, end the sale of high-capacity magazines and ensure the company “never will” sell bump stocks (it never has). CEO Edward Stack noted that while the company still supports the 2nd Amendment, “we hope that the Congress will come together” to pass gun control legislation.
Howie Long-Short: Back in May ’17, DKS announced it had failed to meet Q2 ’17 growth expectations, sending shares on their largest one-day decline in 3-years. Q3 ’17 wasn’t much better; while DKS beat analyst expectations, the company reported net income declined 24.5% YOY to $36.91 million. DKS shares are down 35% over the last 12 months, with declining gun sales among the reasons the company has struggled; a challenging retail environment and a decline in hunting related sales are also negatively influencing performance. The company will report Q4 ’17 and full-year 2017 financials on March 6th.
Fan Marino: Stack issued a definitive statement regarding the company’s position on assault-style rifle sales saying, “we’re taking these guns out of all of our stores permanently”; but, we’ve heard similar words before from the company. In the wake of the December ’12 Sandy Hook school shootings, DKS suspended the sale of modern sporting rifles; only to resume selling them when they opened a line of 35 Field & Stream stores in 2013, once the outrage had subsided. To be fair, the company did not state the word “permanently” in ’12; but, it’s hard for me to issue them credit knowing that revenue and politics overshadowed the deaths of 20 elementary school students (and 6 teachers), just 5 years ago. Better late than never; but, certainly late.
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