Dick’s Sporting Goods’ decision to remove guns was big factor in earnings beat: CFRA
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Dick’s Sporting Goods Inc. reported earnings and sales that beat expectations on Tuesday, which CFRA’s Camilla Yanushevsky attributes, in part, to the retailer’s pullback on gun sales.
The results sent shares soaring more than 18% in Tuesday trading, en route to the third biggest one-day percentage gain since Dick’s Sporting Goods DKS, +18.62% went public.
Same-store sales growth of 6% was the best showing since 2013 , according to the athletic retailer.
Following the Feb. 14, 2018 mass killing at Marjory Stoneman Douglas High School in Parkland, Fla., Dick’s Sporting Goods stopped selling guns to customers below the age of 21.
During a media tour for his book, “It’s How We Play the Game,” Dick’s Sporting Goods Chief Executive Edward Stack talked about the decisions the company has made with relation to its gun business. Moreover, he announced that the company had scrapped $5 million in assault rifles that were still in stock.
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Dick’s Sporting Goods stock is up nearly 49% for the year to date, outpacing the S&P 500 index SPX, +0.22% , which is up 25.2% for the period.
A Forrester report published on Nov. 5 found that social responsibility and values have become critical components of a consumer’s decision to purchase from a brand or retailer, with 54% of U.S. online adults saying they believe companies should improve local communities. Going forward, that will become even more important.
During a media tour for his book, “It’s How We Play the Game,” Dick’s Sporting Goods Chief Executive Edward Stack talked about the decisions the company has made with relation to its gun business. Moreover, he announced that the company had scrapped $5 million in assault rifles that were still in stock.
“In 2020, retailers will not only frame themselves as indispensable to their customers but also take an active position on their broader role in society,” the report said.
For Dick’s Sporting Goods, the decision is one that’s best for the business.
Because they had the guts to do this, if there was a Dick's near me, it would be my first choice to shop at.
When I first heard about this I was wondering if it would hurt their business-- or help it.
Or-- possibly-- have no effect!
Well, now we know the effect its had.
Paula maybe, but I'm of the mind that businesses (especially corporations) do things for only one reason and that's to make a profit. I'm sure this Dicks business had meetings, study groups, surveys, etc that all said they would do ok if they stopped selling guns and that's what made the decision
DKS was at $60.28 in Dec of 2016 and closed at $45.89 today. Take and overlay that with the Dow and S&P charts and it has done horrible in comparison.