Last year’s record-breaking 27.5 million background checks solidified former President Barack Obama’s reputation as the “the greatest gun salesman of all time.”
Now, the industry struggles to define the “new normal” as 2017 shapes up to be the second strongest year for gun sales on record.
“I don’t know where that new normal is going to shake out at,” said Chris Killoy, president, CEO and director of Sturm, Ruger and Company, in a conference call with investors last week. “We see some good long-term trends that we haven’t seen maybe in the past.”
Killoy’s comments referenced an inquiry regarding which year analysts can look to as a baseline for background checks processed through the National Instant Criminal Background Check System — assuming 2016 is an outlier in the system’s 19-year history. NICS is recognized as the best known proxy for gun sales, though it’s not a perfect measurement.
“I’ve been in this business for almost 30 years,” Killoy said. “We look back on the last 25 year-over-year changes, and one year versus the prior year. Fifteen of those were year-over-year increases, 10 of those were year-over-year decreases.”
Ruger’s second quarter net sales dropped 22 percent over last year as competitors continue unloading extra inventory at discounted prices — a familiar narrative heard from competitors like Smith & Wesson and Vista Outdoor.
Killoy said the company 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.
Still, Killoy told investors last week despite softening demand, he remains “optimistic” about the future.
“Yes, 2016 was maybe a little supercharged due to some political events going on and the election,” he said. “But by and large, we’re not hearing anything negative from our customer base. We’re just seeing them maybe take a little bit of a breather.”
“And we just have to encourage our customer base to get back out to the range … enjoy the sport and get back into the store and remember how much fun it is to start buying a few more guns for fun,” he added. “Not just because you think they might be banned in the future.”