Dick’s Sporting Goods CEO says new gun policies cost company quarter-billion dollars

After 17 people were gunned down at Marjory Stoneman Douglas High School, Dick’s Sporting Goods chief executive Ed Stack said he would remove all so-called assault-style weapons from company stores.

Those unsold guns not only came off the shelves, but off the streets. Rather than return the inventory to manufacturers, Dick’s destroyed about $5 million dollars worth of the weapons, turning them into scrap metal.

Stack has brought gun reform to the center of his role as CEO. In the past year and a half, Dick’s has overhauled its gun sales policies, most recently pulling all guns out of more than 100 stores. And even while the National Rifle Association, Republican lawmakers and critical customers have blasted Stack, he said the company’s entire firearms category is under “strategic review.”

“We said, ‘The system is broken, we need to stand up and say something,’ ” Stack told CNBC Tuesday morning. “If you have an expertise on this, and you feel that it’s important to say, you should stand up and say it.”

Tuesday marks the release of Stack’s memoir, in which he tracks the company’s evolution from a modest regional chain to one of the biggest players in the $70 billion sporting goods market. Stack often turns to gun reform as a particularly urgent issue facing his company, corporate America and the nation. Last month, Stack joined 145 CEOs who pressed Senate leaders to expand background checks to all firearms sales and enact stronger “red flag” laws. Signatories to a letter included the heads of major retailers, tech firms and financial institutions, from Levi Strauss to Twitter to Bain Capital.

Immediately after the Parkland shooting, Stack raised the possibility of getting Dick’s out of the gun business altogether, The Washington Post reported earlier this year. In his memoir, Stack describes days of internal debates about the financial risk of such a drastic move. Even if the margin rate on guns wasn’t terribly strong at Dick’s, the company knew that hunters didn’t only buy guns, but also hunting coats, boots, socks and other big-ticket items. Plus, hunting had been a mainstay of its business since the company’s earliest days.

“If we stopped selling guns altogether, we’d be punishing those customers, some of whom had been with us for sixty years – men and women who knew to treat firearms with respect and who used them for legitimate sport,” Stack wrote. “Did it make sense to needlessly alienate loyal Dick’s customers who bought shotguns and deer rifles, and were law-abiding and do-right citizens?”

Ultimately, Dick’s pulled what it called “assault-style” weapons from its stores, and banned high-capacity magazines and “bump stocks” that could effectively convert semiautomatic weapons into rapid-fire guns. Stack also announced that Dick’s would not sell firearms to people younger than 21.

But that strategy didn’t cushion the company entirely. The policy changes after Parkland cost the company about a quarter of a billion dollars, Stack told CBS News. (The company has never disclosed what share of its sales come from gun sales alone.) For the fiscal year ending Feb. 2, 2019, same-store sales fell 3.1%, according to company earnings, with Stack blaming much of the slump on gun issues. Customers boycotted the company, and more than 60 employees quit.

But there’s evidence of a turnaround. In August, Dick’s announced that same store sales jumped 3.2% in the second quarter, its strongest showing since 2016, and the company raised its full-year guidance.

Some of the company’s critics charge that Stack and Dick’s oppose Second Amendment rights, or that limiting sales of assault-style weapons means that all weapons will eventually be banned. The National Rifle Association on Monday tweeted a Breitbart story about Dick’s destroying its unsold assault style rifles “to keep them out of private hands.”

Democratic presidential candidate and former congressman Beto O’Rourke, D-Texas, who advocates for a ban on assault weapons and also a mandatory buyback, shot back. “Dick’s Sporting Goods is doing more to keep Americans safe from assault weapons than Congress,” O’Rourke tweeted.

America’s largest retailers have drawn particular scrutiny for their gun policies. After 24 people were killed in shootings at Walmart stores this summer, the company announced it would stop selling ammunition for military-style weapons and no longer allow customers to openly carry firearms in stores. Other retailers also changed their open-carry policies, including Kroger, CVS and Walgreens.

Please enable JavaScript to view this content.

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.

6 thoughts on “Dick’s Sporting Goods CEO says new gun policies cost company quarter-billion dollars

  1. Most people do not (obviously) know what an “assault rifle” is. An assault rifle is a military rifle. That means it is fully automatic. It doesn’t just look like a military rifle, it is one. The AR15 and non-automatic AK47 look alikes are NOT assault rifles. These are SEMI-AUTOMATIC rifles meaning you have to pull the trigger one time to make the gun shoot one time. This type of rifle has been around on the civilian market for at least 60 or 70 years. If you get rid of the AR15 and AK47 look alike type rifles there will still be hundreds of rifles that are for hunting that do the same thing but look like the sporting rifles they are. Making these guns look like military rifles was a marketing ploy.
    Now if you mean get rid of all semi-automatic guns, that would be millions upon millions of guns and many millions of law abiding gun owners giving up their 2nd amendment protected rights. Now that may be what the people, that want to get rid of what they term “assault rifles”, actually want, but that would betray their true intention which is to disarm the American public. When that happens, we will have done just what a country like China wants. There is no doubt the government of China would be even more worried if the people of Hong Kong were armed, but they are not. The Chinese government has move over 150,000 soldiers across the recently completed bridge between the mainland and the Island and city of Hong Kong. So far they have down nothing. But when and if they do it will not go well with the unarmed people of Hong Kong.
    After World War 2, the Japanese specifically listed as one of their worries, had they tried to attack the mainland of the United States, the number of armed citizens here. The 2nd amendment is not there to insure people can go hunting. It is meant as a somewhat not so veiled threat against the central government trying to move against its own citizens when they disagree in large numbers.

  2. While I applaud Dicks for getting rid of some of the guns at a substantial loss. …
    People are still missing the real issue!
    What is going on inside them?

    It’s just like weeds in a garden….

    If you DONT DEAL WITH THE ROOT CAUSE….

    THE PROBLEM, ADDICTION, SHOOTINGS, STEALING, ABUSE, ETC

    WILL NEVER GO AWAY!

  3. I don’t think addictions and stealing are the issues when it comes to assault rifle attacks. Otherwise, we’d see those types of attacks all over the news every night in inner cities.

    Abuse? Perhaps, whether familial or societal (e.g. schools or that of the actions of classmates) are more like it.

    Seeking help is still a societal stigma. Even if you eliminated every assault, automatic, and semi-automatic gun (as if that’s possible – what would you do for guns which are [now] illegally owned by someone other than the legal/purchasing owner? And those who are currently mass shooters would find other means for attempting to exorcise their demons by attacking others.

    And forced buybacks are a fantasy electoral panacea. The social stigma for obtaining assistance prevents a lot of people from seeking help for what ails them. You know all of those kids you (or your offspring) “kidded” (abused) by belittling them routinely, persistently, when it’s rationalized by saying they were just teasing?

    Those who did so probably contributed to the next mass shooting. They just won’t be sought out.

    Guns aren’t the problem, people are. (And I don’t mean “guns can’t pull their own triggers”).

    As far as the 2nd Amendment goes, I know a lot of people who wish the country would rewrite the Constitution and reboot American society. Unfortunately, things such as Free Speech would likely be abolished as well should many, if not most people, have their way. Think of how many people (IBJ included) in newspaper, magazine, and TV would lose their jobs!