Elder Patriot – In today’s highly charged political environment businesses whose corporate directors choose to advance a political agenda often pay a price. That’s been the case with Dick’s Sporting Goods since late February of this year when it was announced the company would be ending sales of commonly owned semiautomatic rifles and “high capacity” magazines. Dick’s also raised the purchase age for long guns to 21 years.
On April 17, 2018, Breitbart News reported that Dick’s was destroying unsold commonly owned semi automatic rifles rather than sending them back to their respective manufacturers. Dick’s also said it would destroy its unsold “high capacity” magazines.
Then the company actively began lobbying Congress, essentially putting a thumb in the eye of a large percentage of their customers:
On May 2, 2018, the Federalist reported that Dick’s was paying lobbyists to pressure Congress to support more gun control.
It came as no surprise when on August 29, 2018, Breitbart News reported that Dick’s quarterly sales dropped. The chain readily admitted that its corporately mandated gun control policy had contributed to the slump in sales.
Two days later, Dick’s addressed falling sales by adding hunting gear to the list of items it would remove from certain stores. Huh?
That left a huge void in high-profit sales volume that wasn’t going to be closed by an increase in the sale of sweat socks, sneakers, and gym shorts.
Now another quarter has passed and Dick’s reported another drop in revenue. According to the Washington Examiner:
Revenue dipped 4.5 percent to $1.86 billion amid challenges in the company’s hunting business during the quarter through Nov. 3. Sales at stores open at least 12 months – a key metric for the retail industry – fell 6.1 percent compared to the prior year.
Despite lower sales, Chief Executive Officer Edward Stack has been successful at boosting Dick’s stock price through attention to costs coupled with higher margins. The combined strategies helped the Pittsburgh-based sporting goods chain boost profits 2.5 percent to $37 million.
To address lagging sales, Stack is also increasing Dick’s investments in new bricks-and-mortar stores as well as bolstering the firm’s e-commerce business where sales climbed 16 percent. Plans call for the opening of six stores in the upcoming quarter.
Stack admitted both firearms customers and the firearms industry have rebutted the retailer because of their gun-control advocacy.
Then Stack said he is considering closing down their entire Field & Stream chain of 35 stores across 18 states.
“My sense is that we can either take a look at closing that store, that concept or reconceptualizing it into a more of an outdoor type concept, and we’re taking a look at all of these things and by the end of—the peak of the hunting season is coming up in—and basically, the end of the third and the beginning of the fourth quarter and as we move into the end of the fourth quarter, we’ll make a decision as to what we’re going to do,” Stack said.
Dick’s is paying the price for changing its gun policy earlier this year. The sporting goods company reported its sales were down in both stores and online. → https://t.co/nCzANIzytb pic.twitter.com/pRZVQh5oda
— NRA (@NRA) November 30, 2018
Regardless of Stack’s success at squeezing every penny of profits out of slumping sales, the lifeblood of any business is sales growth, and Dick’s decision to sever its relationship with 100 million gun owners is costing the company dearly on this important indicator of corporate health.