Dick's Sporting Goods posted better-than-expected first-quarter sales numbers Wednesday, boosting its stock and indicating that it has not yet seen a net negative business impact from the gun policies enacted after the mass murder at a Florida high school in February, Reuters reported.
After the Florida tragedy, Dick's announced it would no longer sell assault weapons and high-capacity magazines and that it would raise the minimum age for gun purchases to 21 years old.
Chief Executive Officer Edward Stack said while the gun policy has harmed its relationship with firearms manufacturers and put pressure on its hunting business, it has also attracted new customers.
"There's been a number of people who have started shopping us," Stack told analysts on a call Wednesday. "They said they're going to shop us more because of the policy. There's definitely been some benefit of the people who joined us, so to speak, because of the policy."
What were the first-quarter sales numbers?
In the three months ending May 5, Dick's Sporting Goods' sales totaled $1.91 billion, which exceeded the estimate of $1.88 billion.
Even though overall sales were up, however, same-store sales were down 2.5 percent. Reuters cited colder weather, which could have hurt hunting gear and electronics purchases, as a reason for that.
The sporting goods retailer beat analysts' first quarter earnings estimate of 45 cents per share, posting earnings of 59 cents per share.
As a result of the positive sales numbers, Dick's shares had its best day since 2002, posting a 28 percent increase Wednesday. The retailer also raised its full-year profit forecast by 12 cents per share.
Negative reaction to gun policy
Dick's decision to limit its gun sales resulted in some lost relationships, such as gun manufacturer Mossberg & Sons, and the industry group, National Shooting Sports Foundation, both severing ties with the retailer.
"We don't have the best relationship with the firearms manufacturers right now," Stack said. "As far as the NSSF expelling us, we didn't have a whole lot to do with them ... it's not really that big of a deal."
Dick's CFO Lee Belitsky acknowledged the challenges ahead for its hunting business.
"Hunting business saw an accelerated decline in an area that was already challenging," he said.