By Tonya Garcia, MarketWatch
Dick’s Sporting Goods Inc. said that it has eliminated the hunting category, including firearms, from about 125 stores, replacing the merchandise with “categories and products that can drive growth,” according to Edward Stack, the athletic retailer’s chief executive.
The changes were part of a strategic review of the hunting business, including Field & Stream, a subsidiary of Dick’s Sporting Goods /zigman2/quotes/200566298/composite DKS +0.24% .
Dick’s Sporting Goods previously removed the category from 10 stores. Those 10 stores generated positive same-store sales, Stack said in March.
In February 2018, Dick’s Sporting Goods raised the minimum age for gun purchases to 21, and said it would cease selling assault-style rifles or high-capacity magazines. The move came in the wake of the mass shooting at Marjory Stoneman Douglas High School in Parkland, Fla., which left 17 dead.
The accused shooter, Nikolas Cruz, purchased a gun at Dick’s Sporting Goods, the company said.
“We feel that we’re enthusiastic about the three main categories of our business - apparel, footwear and hardlines - and even with the continued deterioration in the hunt business and the firearms business, we’ve been able to make up for that in these other categories and we expect to be able to do that through the balance of the year,” Stack said on the earnings call, according to a FactSet transcript.
Dick’s hasn’t revealed how much in sales the hunt category was responsible for, and didn’t give an update of the review.
Gun sellers, including Walmart Inc. /zigman2/quotes/207374728/composite WMT +0.48% , one of the biggest in the country, have become a focus on the discussion about gun violence following the mass shooting at an El Paso Walmart store on August 3 and a shooting in Mississippi that killed two workers.
Dick’s reported earnings and sales that exceeded expectations and same-store sales growth of 3.2%, which the company said was the strongest showing since 2016.
Dick’s stock is closed Thursday up 3.6%.
“We attribute gains in part to Ed Stack’s venture into social activism, which we see bolstering brand loyalty and creating long-term goodwill,” wrote CFRA’s Camilla Yanushevsky.
Stack said the company saw growth across its three main categories -- hardlines, apparel and footwear -- and a 21% increase in the e-commerce business. The hardlines category includes items like sporting equipment.
“In light of competition from Amazon, Dick’s e-commerce investments, we believe are paying off,” Yanushevsky wrote.
CFRA rates Dick’s stock buy with a $40 price target.
Dick’s shares have gained 9.5% for the year to date while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.06% is up 16.6% for the period.