National Dick's stock plunges on poor gun and sports sales

[Joe Link]

The stock price plummeted 18% after a quarter-to-quarter gain still fell short of expectations. It's the worst day of trading in company history and executives painted a bleak picture going forward.

"It's going to be painful for a while," said Dick's Chief Executive Officer Edward Stack.

He lowered Dick's earnings guidance by 17% for the year because of a slump in hunting sales and sporting apparel.

"The hunting business was very soft, and [same-store] sales declined double digits," said Chief Finance Officer Lee Belitsky in an earnings call, noting that the decline was "worse than expected."

The hunting category includes not only camouflage clothes, deer blinds, trail cameras, duck decoys and tree stands, but also guns. The company sells rifles, shotguns and black-powder guns typically used for hunting, including "small frame" rifles for kids.

Demand for hunting gear has been trending down. Dick's plunge follows anemic earnings earlier this month from Cabela's (CAB), a retailer of guns and other hunting products, and Sturm Ruger (RGR), a gun manufacturer. The Federal Bureau of Investigation reported a plunge in background checks for gun purchases in July.

He said that too much supply has led to "promotional pricing" in the hunting industry to try and get rid of the "inventory overhang."

Dick's stock plunges on poor gun and sports sales

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[AMproducts]

I remember when Chicks became Dicks in CA, a whole bunch of us (big group who usually meet for dinner on tuesdays) was like "HEY DICKS SELLS GUNS LETS GO SEE" we went to the store the day they opened, looked around, and were like "hey, umm, where's the gun selection?" the clerk responded "Oh, we don't have the gun section in california" (or any hunting stuff either) we looked at him baffled for a few moments, and then we all left. I've been back since once, when I needed a buttload of ping pong balls in a serious hurry (long story). It's pretty much the same stuff chicks went out of business selling, baseball bats, kids sports apparel, and generally nothing most "outdoorsman" want. Gotta be honest, I've always been impressed with Big 5, their stuff has never been great, their prices have never been super great either, but they always have stuff you want to buy, and it's at least usually reasonable.

Dicks, Cabellas (now part of Bass Pro) really sells a lot of stuff that's just not that interesting. The only time I go to Bass Pro is when I need more socks.

 

[Kruejl]

Dick's made a huge error when they dumped evil black guns after one of the shootings. They lost a HUGE customer base. Bad move.