Amid drop in gun sales, Winchester sees steady ammo sales

While gun sales have slowed, leaving manufacturers coping with the loss, Winchester Ammunition sees a bright future.

At a recent meeting with investors in New York, Olin Corp, parent company of the ammo maker, said it foresees continued growth for Winchester due to steady sales and that it will likely see an increase in profit once it relocates manufacturing facilities.

Winchester partially credits a commercial backlog for steady sales. The surge began in the fourth quarter of 2012 and continued through 2013, due to the looming threat of stricter federal firearm regulations sparked by a mass shooting at an elementary school in December 2012.

The commercial backlog in the third quarter of 2014 was $195 million, more than double what it was in 2012 at $90 million.

Although down, Winchester ammo sales are still on par with 2013’s figures. Nine months into the 2014 fiscal year Winchester has already reported $591.2 million in sales, just $8 million shy for total sales the same time in 2013.

Also, Winchester is almost done relocating manufacturing facilities from southern Illinois to Oxford, Mississippi. The company announced the five-year project in 2010.

Relocation cost savings in 2014 are expected to be in the $25 million range, and $35 to $40 million annually upon completion beginning in 2016.

Once the Oxford facility is up and running, Winchester expects to  generate $125 million of annual revenue in a normal, non-surge year.