Gun sales are getting murdered, and the golf business is raising its handicap.
Demand for guns and golf accessories is tanking nationwide, dealing a blow to big manufacturers and chains like Dick’s Sporting Goods, whose shares plunged 18 percent Tuesday on dismal results that shocked Wall Street.
Gun demand has shrunk severely from last spring, when enthusiasts stocked up on firearms during the months following the school shootings in Newtown, Conn., and the re-election of President Barack Obama.
“People were buying guns and ammo in a panic session,” Dick’s CEO Ed Stack told analysts on a Tuesday conference call. Stack cited worries “around what would happen with gun legislation after the election.”
That panic ebbed last fall, and Stack said he expects tanking gun sales will be more of a short-term phenomenon that will likely level off by year’s end. Shares of gun giant Sturm Ruger dipped 3.2 percent Tuesday, while Smith & Wesson’s were flat.
With golf sales, however, Stack admitted that Dick’s is bracing for a permanent downturn, sending shares of rival Calloway Golf down 9 percent to $7.60.
“We really don’t know what the bottom is in golf,” he said. “I would expect that we would be less exposed to the golf business a couple of years from now than we are today.”
US golfers have been playing fewer rounds, Stack noted, with statistics pointing to near-20-year lows. Last year, 158 golf courses were shuttered, while just 14 opened, and 650,000 men quit the pastime, according to the National Golf Foundation.
Tiger Woods’ injury and shaky performance since the sex scandals of 2009 haven’t helped, as the sport scrambles to recruit younger stars.
More broadly, experts say 21st-century men are sharing more child-rearing duties with their wives than their fathers did, leaving less time to hit the links.
Comparable sales at Golf Galaxy, the chain owned by Dick’s, tanked 10 percent in the first quarter. Earlier this month, Adidas said first-quarter sales of its TaylorMade golf brand were hit by double-digit sales drops.
Persistent wintry weather kept golfers indoors much of the spring. But golfers have also been reluctant to splurge on full-priced clubs, Stack said.
Instead, they’re taking advantage of an industry-wide inventory glut that began last year, forcing vendors to discount drivers to as low as $99 that had been selling for as much as $299 less than two years ago. New drivers that hit balls both farther and higher have been a surprisingly tough sell with golfers. That’s because they present a more radical change than usual, which has provoked anxiety at the tees, according to Stack.
He singled out TaylorMade’s RocketBallz Stage 2 driver, which Dick’s on Tuesday was selling for $269.99, down from its retail price of $399.99.
“People are somewhat confused about this technology,” Stack said.