Ruger Stocks Soar; Gun maker Not Accepting More Orders Until June

Shortly after quarterly shareholders reports showed the American gun manufacturer’s stocks have reached a new, record high,  Ruger has made the public announcement that they will not be accepting more pistol or rifle orders until June of this year.  This isn’t because of any great catastrophe, Ruger simply does not have the manufacturing ability, currently, to fill all of the orders it has received recently.

This isn’t a huge surprise.  Gun sales have been going up steadily every month for nearly two straight years and Ruger, perhaps more than any other US gun maker, has stood poised throughout this time to take advantage of the upswell in interest in firearms, vigilantly developing and introducing some of the current market’s coolest and most innovative guns (like the Ruger LCR and most recently the Ruger American Rifle).

Currently the backlog for Ruger firearms, in dollars, is for $198.5 million worth of guns, with orders for over a million firearms this quarter.  This is up more than double what the demand was last year, by 115%.  Ruger stock subsequently jumped up in price by over 10%.

There are currently three theories as to why sales are up.  First has to be election panic.  People are buying firearms and all the things that could conceivably be restricted should more gun control laws be enacted if or when Barack Obama wins a second term in office.

The National Shooting Sports Foundation (NSSF) has reported that in January alone there were almost a million background checks run on the National Instant Background Check System (NICS) database, 920,84.  This likely amounts to over a million firearm sales when you take into account multiple firearms purchases as well as buyers exempt from background checks, such as many concealed-carry permit holders.

The second reason is that guns are just getting more popular and more mainstream as gun taboos are fading away.  Nation-wide,  more people than ever are in favor of the shooting sports including hunting, and gun ownership is at a high not seen in decades.  Simultaneously crime remains low, securing the notion that if not more guns equals less crime, at the very least not more guns equals more crime.

Third, people have more money of late.  There are many signs that the economy has been recovering at the market end, with stocks returning to their pre-recession levels, and fewer and fewer people are having problems making do as well.  Also, with this being the time of year when many people receive tax refunds, there is always a surge in business as people spend their personal surpluses.

There is a fourth reason that has not been explored much.  And it’s that Ruger makes a fine firearm.  While gun sales are up across the board, Ruger has clearly made a commitment to develop as many new and original pistols, revolvers and rifles as possible.  In an industry where innovation is often associated with experimentation, Ruger has managed to bring to market new handguns and long guns that have taken over their respective niches far in excess of their supply.

When you take things like their SP101 kit gun and pair it with their Model 77 .357, both recent announcements, and add them to Ruger’s bread and butter, GP100s, Mark IIIs, Mini 14s, 10/22s, and the rest, you wind up with a level of demand that is unparalleled in the gun world.

Time will tell if Ruger will expand to meet this recent explosion in orders and meet future demand.  One thing’s for certain, innovation breeds business.  Whether or not Ruger builds a new facility to stock shelves, they will remain a top manufacturer of American firearms so long as they continue to offer guns that no one else thinks to.