Dick's Sporting Goods is feeling the heat from discount retailers, as well as the impact of halting sales of assault rifle-style guns.
CEO Edward Stack told analysts that a move by Under Armour to sell more of its merchandise through lower-cost outlets like Kohl's and Macy's has hurt sales at Dick's. "We experienced significant declines in Under Armour sales as a result of their decision," he said after Dick's on Wednesday reported fourth straight quarter of slumping sales.
The decline came largely in hunting, electronics and Under Armour products. Kohl's, which started selling Under Armour's brand-name gear in 2017, last week said the athletic apparel's products delivered strong results and that the label's comparable sales growth was increasing.
Dick's is phasing out electronics altogether, while also de-emphasizing sales of hunting gear and. That came after a mass shooting at a high school in Parkland, Florida, killed 17 people.
Stack said the hunting category and gun sales were dragging even before the decision to stop carrying assault-style rifles. The company now plans to get rid of "virtually all" hunting items from 10 Dick's stores where sales showed the most significant drops.
"We are downplaying the hunt business based on what's going on, not only from our policy on firearms, but just the industry is challenged," Stack said in a conference call to discuss Dick's latest earnings. "We have been seeing the gun and electronics piece coming for some time. I mean, right after the election, you go back and take a look at others in this industry that were public, the manufacturers the quarter or so after the election, those businesses started to have a problem."
After getting slammed on Wednesday, Dick's shares recouped much of their prior-day losses on Thursday and closed up 1.6 percent.