Gun maker Sturm, Ruger said this week second quarter net sales dropped 22 percent over last year as competitors continue unloading extra inventory at discounted prices.
Chief Executive Officer Christopher J. Killoy said in a press release Wednesday Ruger raked in a net profit of $25 million between April 1 and July 1 — 44 percent less than second quarter 2016.
The dismal results come after a strong first quarter for the company, which reported $167.4 million in sales — a 3 percent decline over first quarter 2016, when consumer fears of impending gun control stoked demand.
“The second quarter was a challenge for us,” he told investors during a conference call Thursday. “Demand in the second quarter slowed considerably from the prior year.”
Killoy told shareholders in May the company “has a consistent game plan” in good times and bad and expressed certainty the market would fluctuate again this year.
“The seasonality of our industry is very well defined, very well predicted and pretty much understood by those of us in the business,” he said. “Frankly, from a percentage standpoint, people have talked about the change in the firearms market since the November election, I think it would fair in saying the demise of the firearms industry was likely greatly exaggerated.”
“That first quarter, however, was not without it’s struggles. It was a very promotionally charged environment,” he added.
He cited “aggressive price discounting and lucrative consumer rebates offered by many of our competitors” as a continuing factor in Ruger’s second quarter decline.
“But our strategy is I think you know anticipate this type of downturn in the market and it’s a volatile inventory,” he told investors Thursday. “It’s not all gloom and doom. To their credit, retailers are healthier than they were a few months ago. Many had increased inventories in anticipation of a surge in demand following the elections last November. When that surge didn’t materialize, it’s understandable they took a deep breath and let their inventories decrease.”