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Dick's Sporting Goods Doubles-Down on Reduced Gun Sales
CEO Admits Alienating Customers, Says It's "Fine"
Shareholder No Longer Shops There
Dick's Sporting Goods reaffirmed its decision to end certain firearms-related sales during today's annual meeting of its shareholders. A shareholder activist challenged corporate leadership about putting anti-gun advocacy ahead of the needs of its customers and its investors. After the meeting was over, Dick's CEO Ed Stack said it was "fine" if the shareholder never shopped in his stores again.
The National Center for Public Policy Research's Free Enterprise Project (FEP) - the nation's leading proponent of free-market investor activism - confronted Stack and other company leaders about the company's recent decisions to stop selling AR-15 rifles and certain accessories as well as to raise the age limit for gun purchases from 18 to 21 years old. These changes were made after the February school shooting in Parkland, Florida. The company also reportedly hired lobbyists to promote gun restrictions.
"The management of Dick's Sporting Goods shot itself in the foot by catering to the fanaticism of the gun-grabbers," said National Center Vice President David W. Almasi, who represented FEP at today's shareholder meeting in Pittsburgh. "Stack seems to believe that most customers support the company's politicized retail strategy, but he has also acknowledged that these decisions could harm shareholders' return on investment. This is irrational and irresponsible, and I don't consider it a sustainable strategy."
Noting that the company puts itself at risk with its high-profile stance on guns, Almasi said:
Mr. Stack, you knew the risk of these political moves from the start. During your March 13 earnings call, you admitted: "There are just going to be some people who just don't shop us anymore for anything."...
Sales are so anemic and relations with gun manufacturers such as Mossberg so poor right now that you've even indicated Dick's might get out the gun business entirely. Meanwhile, Sportsman's Warehouse reports that their gun sales and net sales were up 15% during the first quarter. That company credits consumer backlash against companies such as Dick's as partially responsible for its success.
The company is willfully giving up money. It has damaged its reputation by lending its voice and its resources to those who want to abolish the 2nd Amendment, even while the vast majority of Americans support the 2nd Amendment. Thirty percent of American adults own guns, and another 11 percent live with someone who does. You've now alienated them...
Stack admitted Dick's change in gun-related sales "did alienate some gunowners," but insisted that "we're not going to change" the policy and that "we as a company and a board stand by our decision." Almasi then warned Stack that Dick's new policy could mean "the hunters won't be back. The supporters of the Second Amendment… won't be back."
After the close of the meeting, Almasi approached Stack to discuss the issue further. Stack terminated the conversation when Almasi questioned Stack's assertion that the gun policy was about corporate concern for child safety. Almasi asked why, if the company was concerned about child safety, the stores continue to sell football gear despite the risk of head injuries and brain trauma.
On his way out of the room, Stack asked Almasi, "I suspect we won't see you in our stores?" Almasi answered: "Probably not." Stack replied: "Fine!"
"When Dick's alienates gunowners and their supporters, those people won't just stop buying their guns at Dick's – they also won't buy hunting equipment, coolers, jackets or golf clubs at Dick's. They will tell their friends to shop elsewhere," Almasi added. "It's a poor business model to offend a group as motivated and organized as gunowners. It's also not wise for a corporation to oppose a basic constitutional right."
FEP has raised the issue of gun rights several times this shareholder season. It challengedBank of America CEO Brian Moynihan over the financial institution's decision to sever ties with certain gun manufacturers. It also challenged United Airlines CEO Oscar Munoz about the reputational risk of breaking off its relationship with the National Rifle Association (NRA). In addition, FEP Director Justin Danhof, Esq. recently wrote in The Federalist that "[c]orporate America has become the muscle of American liberalism," explaining how liberals are using the business community "to bolster and justify the cause" against the NRA and gun rights.
FEP representatives have participated in 26 shareholder meetings so far in 2018.
Launched in 2007, the National Center's Free Enterprise Project focuses on shareholder activism and the confluence of big government and big business. Over the past four years alone, FEP representatives have participated in over 100 shareholder meetings – advancing free-market ideals about health care, energy, taxes, subsidies, regulations, religious freedom, food policies, media bias, gun rights, workers' rights and other important public policy issues. As the leading voice for conservative-minded investors, FEP annually files more than 90 percent of all right-of-center shareholder resolutions. Dozens of liberal organizations, however, annually file more than 95 percent of all policy-oriented shareholder resolutions and continue to exert undue influence over corporate America.
FEP activity has been covered by media outlets including the New York Times, Washington Post, USA Today, Variety, the Associated Press, Bloomberg, Drudge Report, Business Insider, National Public Radio and SiriusXM. FEP's work was prominently featured in Wall Street Journal writer Kimberley Strassel's 2016 book The Intimidation Game: How the Left is Silencing Free Speech (Hachette Book Group).
Danhof's latest commentary, on the recent Walt Disney shareholder meeting where his actions resulted in Joy Behar's public apology for suggesting Christianity is a mental illness, is available by clicking here.
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 60,000 active recent contributors. Contributions are tax-deductible and may be earmarked for the Free Enterprise Project. Sign up for email updates here.
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