Dick’s Sporting Goods is testing if it should stop selling guns

CNN reports Dick’s Sporting Goods considered stopping all gun sales in early 2018. A shooting at the high school in Parkland, Florida, had killed 17 people. And the company was shocked into action.

“We did have a conversation about that,” CEO Ed Stack told CNN Business earlier this year. “At the time we felt it was a part of our DNA and we should stay in it. So many people in the country are law-abiding citizens who use firearms to hunt, to use from a recreation standpoint. We didn’t think it was right to exit the business completely.”

That could be changing. Dick’s, one of the country’s biggest gun retailers, has been quietly testing the water on whether to pull out entirely from what it calls the “hunt” business, including firearms. An announcement with the results of the test is expected Thursday, when it is set to report quarterly results.

America is again debating gun control after a recent wave of shootings — including one on August 3 at a Walmart store in El Paso, Texas. The debate has drawn new scrutiny on the legal sale of guns.

When Walmart (WMT) reported earnings on August 15, CEO Doug McMillon said the company supports stronger gun measures, though he stopped short of endorsing a specific plan.

But Dick’s has been the mainstream retailer to so far make the loudest public statement about firearm sales.

Two weeks after the Parkland shooting on February 14, 2018, Dick’s decided to drop the sale of assault-style rifles that are frequently used in mass shootings, as well as high-capacity magazines that can allow a person to fire more bullets without taking time to reload. It also raised the age for the sale of any firearm to 21 from 18.

Rather than sell off its inventory of assault rifles to another retailer, Dick’s had the weapons destroyed. And it hired lobbyists to work on gun safety and gun control issues. The moves won praise from gun control opponents and anger from gun enthusiasts. The backlash has probably hurt the sale of rifles Dick’s continued to sell. As a test, Dick’s last fall stopped selling all hunting gear, including guns, in 10 stores. It replaced the guns with other goods, such as apparel of a local sports team and other popular items.

The experiment was a success. “Those stores outperformed the balance of the chain pretty meaningfully,” Stack said.

Earlier this year, the company pulled the hunting business out of another 125 stores, leaving sales in about 600 stores. The company said it would study the impact on overall store sales at those 125 stores and complete its review by August. The company declined to comment on the status of that review ahead of Thursday’s earnings announcement.

Firearm sales have generally been on the decline in recent years.

American Outdoor Brands (AOBC), the largest gun manufacturer and maker of Smith & Wesson, reported that sales fell 33% in the year that ended in April 2018, compared to the previous year, before rising 5% in the most recent year. Sturm Ruger & Co. (RGR) reported a 21% drop in sales in 2017, and another 5% drop last year. Other smaller gunmakers have also reported declines. Remington filed for bankruptcy in April 2018.

During the administration of President Barack Obama, the fear that the government would crack down on gun sales stoked sales. But under President Donald Trump, who was elected with the support of the National Rifle Association, those fears have abated — and along with them gun sales have waned. FBI background checks used for gun purchases, a measure of sales, were down 5% last year compared to 2016, the last year of the Obama administration.

“It’s an OK business,” Stack told CNN Business earlier this year. “It’s not a great business.”