‘…weakness in hunting, electronics, and Under Armour as we get into 2019…’
(Joshua Paladino, Liberty Headlines) Dick’s Sporting Goods suffered larger-than-expected losses in sales due to its gun-control policies and weakened demand for Under Armour merchandise.
The retailer decided to take so-called assault rifles and high-capacity magazines off their shelves following the shooting at Marjory Stoneman Douglas High School in Parkland, Florida on Feb. 14, Reuters reported.
“We delivered double digit growth in ecommerce, private brands, and athletic apparel excluding Under Armour, however, as expected, sales were impacted by the strategic decisions we made regarding the slow growth, low margin [hunting] and electronics businesses, which accounted for nearly half of our comp decline,” Dick’s Sporting Goods CEO Edward Stack said in a press release.
Under Armour partnered with Kohl’s to sell their products, causing a 3 percent decline in the brand’s sales at Dick’s stores.
Dick’s also began to require customers to be at least 21 years old to purchase firearms.
Analysts forecasted, on average, a 0.62 percent decline in second-quarter sales, but real figures showed a 1.9 dip in same-store sales.
The company’s public stock dropped from $38.56 on Aug. 23 to $32.82 on Aug. 29. It has since recovered to about $35.
Annual sales shrunk by 0.3 percent in 2017, and they are expected to take a 3 to 4 percent dive through 2018 as a whole.
Dick’s expects the bleeding to stop in 2019.
“We are very confident our sales trajectory will improve next year as these headwinds are expected to subside,” Stack said.
The retailer said it will expand its stock in baseball equipment and private brands to compensate for the loss in Under Armour and firearm sales.
“The improvement in the U.S. athletic market should overcome the weakness in hunting, electronics, and Under Armour as we get into 2019,” Telsey analyst Joseph Feldman said.