Sportsman’s Warehouse senior management forecast steady gun sales in the future and characterized the uptick in the third quarter as growth rather than a surge driven by the election.
“In previous election years … if there was going to be a surge in firearms it came a day or two before the election. This year we saw a modest increase in activity before the election that started about a week before the election and that has continued post-election,” John Schaefer, the Utah retail chain’s chief executive officer, told investors during a conference call this month.
Schaefer called presidential elections “short-term hits” and said the surge this year was nothing compared to 2012, when the Sandy Hook school shooting prolonged the predictable surge because of the intense debate about gun policy that followed.
Sportsman closed out its third quarter on Oct. 31 with $217.2 million in sales, up $25 million from last year, and up 12 percent overall nine months into the year. Hunting and shooting products accounted for 50.7 percent of total sales revenue, a 1.3 percent increase from last year.
According to the federal background check system, which the industry uses as a barometer for gun sales, the feds processed 6.1 million checks during Sportsman’s third quarter, a 12 percent increase from the year before.
Competitor Cabela’s reported $2.8 billion in third quarter revenue, a 7.8 percent increase over last year. Similarly, third quarter’s $996.5 million in revenues remain 7.5 percent higher compared to third quarter 2015.
Schaefer said they’ve seen steady sales throughout the year and not just during hunting and holiday seasons because first-time gun buyers in 2012 and 2013 have been returning. “They are starting to act like longer-term buyers in the shooting sports and I think that bodes really well for the industry on a go forward basis,” he said.
To maintain that momentum, Schaefer explained Sportsman has been improving its online presence and lists a wide variety of firearms — some 5,500 — which customers would still need to visit one of their stores to buy and pick up. The company operates in 18 states.
Investors expressed concerns about gun sales as their ebb and flow correlate with relative calmness in the world and high profile acts of violence, which spur political debate. However, Republicans soon to take office will unlikely propose gun control legislation in response to such acts.
“With the election uncertainty behind us now, we believe a Republican White House and Congress is a positive for both our company and for the shooting sports industry as gun legislation fears should be alleviated setting the stage for continued steady growth in firearms,” Schaefer said.