(IJR) Dick’s Sporting Goods stock is hurting in the months following their decision to stop selling “assault-style” rifles.
The company’s stock fell more than four percent due to J.P. Morgan’s projections for the sporting goods store.
“Looking forward, gross margin-driven upside appears less probable given 3Q’s performance, changing comparisons, and rising inventory levels,” said analyst Christopher Horvers. “The latter appears to be a theme across retail (which can be risky in the seasonal apparel world).”
Although the company had reported better-than-expected sales for the third quarter, top executives still admitted that their growth was impacted by the decision during a call with investors.
“In addition to the strategic decisions we made regarding firearms earlier this year, the broader industry has decelerated and remains weak as evidenced by most recent national background check data,” Lee Bolitsky, Dick’s chief financial officer said. “We believe this also contributed to the decline.”
Dick’s Sporting Goods is also exploring the possibility of stopping the sale of all hunting gear entirely in order to help the company.
“We are looking at a number of stores where the hunting business significantly underperforms, and we will assess whether we want to take it out and replace it with these other categories if that ends up to be a smart thing to do from a business standpoint,’’ CEO Ed Stack said.
The company will not reconsider its stance on gun sales at their stores, but it is uncertain if stopping the sale of hunting gear will help them grow.