Sturm, Ruger defies industry slowdown with strong third quarter
Gunmaker reports 22 percent increase in sales
Gun sales are slowing down nationally, but they were still going up in the last quarter for Sturm, Ruger & Co. thanks to a huge back log.
The company reported $178.2 million in sales in the third quarter, a 22 percent increase, resulting in net income of $35 million, or $1.98 a diluted share – more than $10 million over the same quarter last year. The sell-through rate was up 9 percent, even though comparable national background checks for the entire industry showed an 11 percent decrease.
Ruger’s board of directors also declared a dividend of 79 cents per share for the third quarter for stockholders of record as of Nov. 15, payable on Nov. 30. That’s in addition to a $5 a share special dividend paid out over the summer.
Ruger said it saw a sharp decrease in the number of new firearms ordered – 219,000 – compared to 935,000 in the same quarter last year, but CEO Christopher Killoy shrugged that off in an earnings call on Nov. 4.
“We had a very full, and still have a very full, order book when we entered Q3, and we’re still at 1.3 million units on order at the end of Q3. And at some point our distributors have enough on order,” he said.
At another point he said, “we did start to see what we’d call a little bit of a summer slowdown … given there was so little inventory or retail, it was difficult to tell as far as what was that impact.”
Year-to-date, the company reported $562.7 million in revenue, a 40 percent increase over last year, for net income of $117.8 million, or $6.64 a diluted share.
There have been some production problems. The company shut down for a week in July to give workers a break and to do some servicing and rearrangements. There were also some “spot shortages” due to supply chain issues, it said, though they did not necessitate a shutdown.
And it had triple the number of Covid cases in the third quarter than a year earlier, though it did not disclose the number or at which facility they were.
The company employed about 1,950 people at three facilities in the third quarter – 50 more than in the second quarter – in Newport, NH, Prescott, Ariz., and Mayodan, N.C. Mayodan is the newest facility, and it is where the expansion is taking place, thanks to the acquisition of the Marlin line from bankrupt Remington Arms a little more than year ago, though Killoy was quick to add that the expansion was not at the expense of the other facilities. Indeed, the wood and laminate stocks the Marlin uses will be made in the Granite State.
The Marlin line should be launched next month, but Killoy credits other new additions for helping the company buck the national trend. The products, which include the Ruger-57, the LCP II, the PC Charger, the MAX-9 pistol, and the LCP MAX, have accounted for 22 percent of firearm sales year to date.