By Phil Wahba
August 15, 2017

Add weak firearms sales to the woes plaguing Dick’s Sporting Goods (dks).

The retailer’s shares tanked 19% to $28.37—their lowest level since 2010—after it reported that same-store sales, or revenue of stores open at least 14 months, rose a mere 0.1% in the second quarter, well below its own forecasts for a rise of 2% to 3%, and short of Wall Street projections for a 1.4% gain. The result was all the more disappointing given the disappearance in the last year of several competitors, including The Sports Authority, which went bankrupt. Total sales, buoyed by new stores, sales rose 9.6% percent to $2.157 billion compared to a year earlier.

Dick’s pointed to sales of hunting gear such as rifles, which chief financial officer Lee Belitsky called “much worse than our expectations” on a conference call, and athletic apparel is key culprits in the shortfall. Firearm sales have fallen significantly since the election of Donald Trump as president, as other chains including Cabela’s have reported, as fears of new gun laws have receded.

The company has been trying to capitalize on the bankruptcies of defunct rivals like City Sports and The Sports Authority to win their customers. But the chaos of all the going out of business sales, market upheaval with chains like Target (tgt) and Kohl’s (kss) making a big play for the activewear market, have led Dick’s to decide to ramp up promotions, something that promises to pinch profits for some time. What’s more, Dick’s is playing a very dangerous game given how many retailers have learned the hard way how hard it is to get customers weaned off of discounts.

“By design, we will be more promotional and increase our marketing efforts for the remainder of the year, as we will aggressively protect our market share,” Chief Executive Edward Stack said in a statement.
“We have updated our outlook to reflect these investments. We continue to believe retail disruption creates opportunities for us as we look long-term.”

For the quarter ended July 20, Dick’s adjusted earnings were 96 cents a share, up from 82 cents a year ago, but less than the $1.00 expected by Wall Street and even its own forecast of $1.02 a share to $1.07 a share. Dick’s now things adjusted profit for the full year will be $2.80 and $3.00, down from a previous estimate of $3.65 to $3.75. And same-store sales should be unchanged at best, or down a low single-digit percentage at worst, well below Dick’s previous forecast for a 1% to 3% increase.

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