“Dick’s Soaring Sales Prove It Can Succeed Without Assault Rifles,” CNN Business crowed earlier this week. But while it’s true that Dick’s saw an uptick in overall sales, CNN’s headline only tells part of the story.
“These areas of strength, however, were offset by declines in our hunt and electronic businesses,” said Dick’s Chief Financial Officer Lee J. Belitsky on a call with investors. “As expected, our firearms policy changes impacted our hunt business which saw an accelerated decline in an already challenged category.”
Edward Stack, Dick’s CEO and Virtue Signaler in Chief (VSC), echoed Belitsky’s analysis.
“And the hunt business we expect, based on our firearm policy, it’s going to continue to be challenged through the balance of the year,” he said.
Belitsky’s characterization of hunting and firearms as an “already challenged category” alludes to the recent decline in firearm sales post-Obama. That would be a convenient excuse, except that gun-related background checks set records in both March and April. Sportsman’s Warehouse also reported a 14.9% increase in same-store firearm unit sales as well as a 17.5% increase in a same-store sales basis for the first quarter of 2018.
The improvements, they say, are “largely driven by an increase in traffic as a result of recent policy changes by our competitors.”
“We have a diverse mix of product and the recent changes in the competitive landscape are driving more customers into Sportsman’s Warehouse,” Jon Barker, the company’s CEO, added last week during an earnings call. “This is creating market share opportunities by allowing us to engage with a broad range of customers from first-time users to seasoned hunters and shooters.”
Moving forward, Stack was anything but confident in Dick’s ability to remain in the firearms and hunting market.
“Well, the hunt business is going to continue it’s been a challenging business for the last several years,” Stack said when asked what kind of change the company expected in those categories through the end of the year.
“Our hunt business is going to continue to be challenged because that same consumer who is buying firearms is buying hunting boots and hunting apparel. All of that is baked into our guidance and we think that the whole category is going to continue to be challenged through the balance of the year.”
He was even less definitive about his long-term projections.
“That depends on a lot of things that have to be determined yet and that is how the business plays out, how the manufacturers decide that they want to do business together,” he said. “The one thing that we do know is that it’s going to continue to be challenged, but as we reallocate some marketing dollars, as we reallocate expenses to some other categories, we think it will continue to be margin accretive to us.”
Stack was also asked about the recent decisions by the National Shooting Sports Foundation and Mossberg to cut ties with Dick’s over their stance on firearms.
“Well, we don’t have the best relationship with the firearms manufacturers right now,” he said.
“Mossberg did indicate that they weren’t going to sell us on a direct basis. If we want, we can still buy that product from a distributor to have that in the assortment, if products that they sell fit into our assortment. We’re not sure we’re going to do that, but we have the ability to do that.”
“As far as the National Shooting Sports Federation expelling us, we didn’t have a whole lot to do with them,” he continued. “They primarily run the SHOT Show. We would go to the SHOT Show, so we don’t go to the SHOT Show now. It’s really not that big of a deal.”
The company still plans to open 19 new stores this year, but some markets may be more receptive than others. Check out the comments under a recent Facebook ad announcing a new Dick’s in Waco, Texas: