First WSJ article:
Gun Stance May Hurt Struggling Dick’s Sporting Goods
Will investors support the chain for being socially conscious?
By
Elizabeth Winkler
March 13, 2018 1:04 p.m. ET
Two weeks ago, after Dick’s Sporting Goods announced that it would stop selling assault rifles and raise its age requirement for gun purchases to 21, the retailer’s shares rose 1% even as the broader stock market fell sharply. In the wake of the shooting at Marjory Stoneman Douglas High School, investors seemed eager to distance themselves from gun sellers while rewarding socially-conscious firms. But now comes the real test: Will they stick by a retailer that is suffering as a result of its new gun policy?
SlumpingSame store sales growth, quarterlySource: The company
Dick’s, which reported fourth-quarter earnings on Tuesday, said same store sales fell 2%, double the decline analysts expected. Profits reached $1.22 a share, two cents above estimates, yet revenue fell short at $2.66 billion, trailing estimates of $2.74 billion. Shares fell as much as 8% Tuesday morning before rebounding.
The decision didn’t affect the quarterly results just released, but it will weigh on the future. In a call with analysts, Chief Executive Ed Stack acknowledged that the new policy is “not going to be positive from a traffic and sales standpoint.”
It is difficult to say just how extensive the impact will be. Assault rifles were previously sold at three dozen of the company’s Field & Stream stores. Mr. Stack says the company has already seen pushback. “Some of those customers that buy firearms [from Dick’s] buy other things also.” They may not shop at Dick’s at all anymore, he said.
That loss is reflected in the company’s outlook. It expects same-store sales will range from flat to a single-digit decline this year. It also said that it will no longer provide analysts and investors with a quarterly outlook, underscoring the sense that the company is troubled.
Much of that is unrelated to guns, of course. Although Dick’s looked poised to enjoy its status as the last national sports retailer after Sports Authority’s collapse in 2016, it has struggled to compete with Amazon.com and non-specialty retailers. Meanwhile, brands such as Nike and Under Armour have focused on selling directly to consumers, undercutting Dick’s. Shares have fallen more than 37% from a year ago.
Despite some praise the company has received for its new gun policy, it is only likely to hurt it further. Long after the glow of a socially-conscious move fades, investors’ focus on the bottom line remains.
Second WSJ article:
By
Austen Hufford
March 13, 2018 1:30 p.m. ET
86 COMMENTS
Dick’s Sporting Goods Inc. DKS 0.29% said its decision to no longer sell guns to anyone under 21 years old has hurt traffic and retail sales as the move upset some customers and exacerbated headwinds to its hunting and gun business.
Last month, after a Parkland, Fla., high-school shooting left 17 people dead, Dick’s and Walmart Inc. WMT 1.90% were among retailers that announced age restrictions on gun sales.
Tuesday, Dick’s said it was surprised by the “outpouring of support” for its new gun policies but also said that some customers were choosing to shop elsewhere.
“Some of those customers that buy firearms, buy other things also,” Dick’s Chief Executive Edward Stack told analysts on a conference call. “There are just going to be some people who just don’t shop us anymore for anything.”
Under current law, licensed gun dealers can sell a handgun to someone 21 years old and sell a rifle to someone who is 18. President Donald Trump initially seemed open to raising the age limit for rifle sales, but a plan from his administration to reduce gun violence instead called for funding to train school staffers to carry guns. The plan also called to create a federal panel to study age restrictions and other potential changes in laws and to make recommendations later.
Dick’s said it was hurt by weak overall demand for guns, which impacted both competitors and suppliers. Gun maker Remington Outdoor Co. is planning to file for bankruptcy protection as early as next week as it built capacity when gun sales were soaring but sales dropped after Mr. Trump took office. Earlier this month, American Outdoor Brands Corp. forecast weak firearm sales for at least a year, becoming the latest gun maker to report disappointing quarterly results.
Dick’s said its hunting business posted negative comparable-store sales and expects the challenges to continue this year, with its new gun policies being an additional burden.
Fourth-quarter revenue rose 7.3% to $2.66 billion, which included an extra week compared with the same period a year earlier.
Dick’s earned a profit of $116 million, or $1.11 a share, compared with $90.2 million, or 81 cents a share, in the same period a year before. On an adjusted basis, earnings per share came in at $1.22, more than the $1.20 expected from analysts polled by Thomson Reuters.
Dick’s also said it would devote less store space to selling electronic fitness trackers, as margins and sales continue to fall in the market for those products.
Gun Stance May Hurt Struggling Dick’s Sporting Goods
Will investors support the chain for being socially conscious?
By
Elizabeth Winkler
March 13, 2018 1:04 p.m. ET
Two weeks ago, after Dick’s Sporting Goods announced that it would stop selling assault rifles and raise its age requirement for gun purchases to 21, the retailer’s shares rose 1% even as the broader stock market fell sharply. In the wake of the shooting at Marjory Stoneman Douglas High School, investors seemed eager to distance themselves from gun sellers while rewarding socially-conscious firms. But now comes the real test: Will they stick by a retailer that is suffering as a result of its new gun policy?
SlumpingSame store sales growth, quarterlySource: The company
Dick’s, which reported fourth-quarter earnings on Tuesday, said same store sales fell 2%, double the decline analysts expected. Profits reached $1.22 a share, two cents above estimates, yet revenue fell short at $2.66 billion, trailing estimates of $2.74 billion. Shares fell as much as 8% Tuesday morning before rebounding.
The decision didn’t affect the quarterly results just released, but it will weigh on the future. In a call with analysts, Chief Executive Ed Stack acknowledged that the new policy is “not going to be positive from a traffic and sales standpoint.”
It is difficult to say just how extensive the impact will be. Assault rifles were previously sold at three dozen of the company’s Field & Stream stores. Mr. Stack says the company has already seen pushback. “Some of those customers that buy firearms [from Dick’s] buy other things also.” They may not shop at Dick’s at all anymore, he said.
That loss is reflected in the company’s outlook. It expects same-store sales will range from flat to a single-digit decline this year. It also said that it will no longer provide analysts and investors with a quarterly outlook, underscoring the sense that the company is troubled.
Much of that is unrelated to guns, of course. Although Dick’s looked poised to enjoy its status as the last national sports retailer after Sports Authority’s collapse in 2016, it has struggled to compete with Amazon.com and non-specialty retailers. Meanwhile, brands such as Nike and Under Armour have focused on selling directly to consumers, undercutting Dick’s. Shares have fallen more than 37% from a year ago.
Despite some praise the company has received for its new gun policy, it is only likely to hurt it further. Long after the glow of a socially-conscious move fades, investors’ focus on the bottom line remains.
Second WSJ article:
By
Austen Hufford
March 13, 2018 1:30 p.m. ET
86 COMMENTS
Dick’s Sporting Goods Inc. DKS 0.29% said its decision to no longer sell guns to anyone under 21 years old has hurt traffic and retail sales as the move upset some customers and exacerbated headwinds to its hunting and gun business.
Last month, after a Parkland, Fla., high-school shooting left 17 people dead, Dick’s and Walmart Inc. WMT 1.90% were among retailers that announced age restrictions on gun sales.
Tuesday, Dick’s said it was surprised by the “outpouring of support” for its new gun policies but also said that some customers were choosing to shop elsewhere.
“Some of those customers that buy firearms, buy other things also,” Dick’s Chief Executive Edward Stack told analysts on a conference call. “There are just going to be some people who just don’t shop us anymore for anything.”
Under current law, licensed gun dealers can sell a handgun to someone 21 years old and sell a rifle to someone who is 18. President Donald Trump initially seemed open to raising the age limit for rifle sales, but a plan from his administration to reduce gun violence instead called for funding to train school staffers to carry guns. The plan also called to create a federal panel to study age restrictions and other potential changes in laws and to make recommendations later.
Dick’s said it was hurt by weak overall demand for guns, which impacted both competitors and suppliers. Gun maker Remington Outdoor Co. is planning to file for bankruptcy protection as early as next week as it built capacity when gun sales were soaring but sales dropped after Mr. Trump took office. Earlier this month, American Outdoor Brands Corp. forecast weak firearm sales for at least a year, becoming the latest gun maker to report disappointing quarterly results.
Dick’s said its hunting business posted negative comparable-store sales and expects the challenges to continue this year, with its new gun policies being an additional burden.
Fourth-quarter revenue rose 7.3% to $2.66 billion, which included an extra week compared with the same period a year earlier.
Dick’s earned a profit of $116 million, or $1.11 a share, compared with $90.2 million, or 81 cents a share, in the same period a year before. On an adjusted basis, earnings per share came in at $1.22, more than the $1.20 expected from analysts polled by Thomson Reuters.
Dick’s also said it would devote less store space to selling electronic fitness trackers, as margins and sales continue to fall in the market for those products.
