By Daily Wire. Dick’s Sporting Goods is warning investors that its decision to remove certain “assault-style” weapons from its Field & Stream stores cost it dearly and may limit its future gains.
The sporting goods retailer was forced to confront angry shareholders late last week after its stocks tanked more than 4.5% and financial conglomerate J.P. Morgan Chase downgraded Dick’s shares, saying the company was “overweight.”
“Gross margin-driven upside appears less probable given 3Q’s performance, changing comparisons, and rising inventory levels,” an analyst for J.P. Morgan told CNBC. The same analyst noted that same-store sales for Dick’s outlets are expected to grow less than 1% even as the company’s inventory rises.
“The analyst pointed out that Dick’s same-store sales growth for 2019 is expected to be less than 1 percent after averaging 2.1 percent between 2011 and 2015. He also noted that while the company’s 25 percent Black Friday store discount will help boost sales, it will not boost margins,” the analyst continued. “Inventory levels, meanwhile, rose 1 percent in the third quarter after falling 5 percent in the first half of 2018 with inventory days estimated to return back to 2015-2017 levels.” (Read more from “Getting Rid of Guns Really Cost Dick’s Sporting Goods” HERE)
Dick’s Sporting Goods Ban on Some Guns Dented Sales. but Weaker Gun Market Also Took Toll
By USA Today. While a decision to stop selling assault-style weapons in the wake of the Parkland, Florida, school shooting dented its overall sales, Dick’s Sporting Goods says that the dip reflects a broader weakness in the world of firearms
The nation’s largest seller of sporting goods reported that consolidated same-store sales were down 3.9% in the third quarter, due in part to double-digit declines in the areas of electronics and hunting.
The weak numbers come in the wake of the Dick’s decision in February to not only halt assault weapon sales, but to no longer sell guns to people under the age of 21 in response to the mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida, which left 17 dead.
But broader trends also appear to have had an impact. After breaking records each of the last three years, the number of background checks conducted by the FBI for gun purchases this Black Friday was down 10 percent from that day last year. (Read more from “Dick’s Sporting Goods Ban on Some Guns Dented Sales. but Weaker Gun Market Also Took Toll” HERE)