Walmart’s latest hard-line stance on gun sales and even carrying the weapons in its stores may be drawing sharp criticism but not from investors. Despite the vastness and boldness of Walmart’s new gun policies, investors were barely fazed. WMT stock closed slightly up on a largely down day for the Dow Jones.
Walmart CEO Doug McMillon addressed store-policy changes in a letter to the company’s associates on Tuesday, marking the most daring attempts the discount retailer has ever made to address mass shootings. It follows two of its stores being involved in recent shootings.
“We know these decisions will inconvenience some of our customers, and we hope they will understand. As a company, we experienced two horrific events in one week, and we will never be the same.”
Foregoing sales for stronger gun control?
In his letter, the CEO of the world’s second-largest retailer said Walmart is discontinuing sales of:
- certain “short-barrel rifle ammunition”
- “handgun ammunition”
- “handgun sales in Alaska”
Walmart is even challenging state laws that allow people to openly carry their firearms. So in Texas, where two of the latest mass shootings happened, law-abiding citizens are being asked to not tote their weapons inside Walmart or Sam’s Club stores.
“We are respectfully requesting that customers no longer openly carry firearms into our stores or Sam’s Clubs in states where “open carry” is permitted – unless they are authorized law enforcement officers.”
People who have permits to carry concealed guns can still do so. Walmart’s not planning on frisking customers for weapons.
Action triggers NRA, gun advocates
Immediately, the NRA tweeted:
"It is shameful to see @Walmart succumb to the pressure of the anti-gun elites. Lines at Walmart will soon be replaced by lines at other retailers who are more supportive of America’s fundamental freedoms."
— NRA (@NRA) September 3, 2019
There’s no doubt that people will do their buying elsewhere over Walmart’s latest gun policies. In fact, #boycottwalmart is already making its way around the Twitterverse.
— Pastor Greg Locke (@pastorlocke) September 3, 2019
McMillon is also fed up with the slow approach to gun control by the nation’s leaders:
“[We] encourage our nation’s leaders to move forward and strengthen background checks and to remove weapons from those who have been determined to pose an imminent danger. We do not sell military-style rifles, and we believe the reauthorization of the Assault Weapons ban should be debated to determine its effectiveness. We must also do more, as a country, to understand the root causes that lead to this type of violent behavior.”
McMillon is sending letters to the White House and the Congressional leadership to act on what he calls common-sense measures.
Financial impact remains to be seen
Walmart crunched the numbers and found that its actions will reduce its market share of ammunition significantly. It will go from around 20% to a range of approximately 6% to 9%.
“We believe it will likely drift toward the lower end of that range, over time, given the combination of these changes.”
Walmart stopped selling handguns in the U.S. during the 1990s. Sales were allowed in Alaska back then. It stopped selling semi-automatic weapons like the AR-15 rifle in 2015, according to CNBC. The mass shooting at a high school in Parkland, Fla. in 2018 prompted it to raise the age requirement to 21 for buyers of firearms and ammunition.
Walmart drags gun stocks
Walmart’s stock wasn’t hammered by its fresh gun policies.
However, other gun-related stocks suffered.
Shares of gun and ammunition makers were down following the news after already trading lower earlier in the day.
Sturm Ruger & Company, Vista Outdoor, and American Outdoor Brands, which owns Smith & Wesson, all fell following Walmart’s announcement.