Sturm, Ruger and Company’s top executive said this week new product lines have driven 30 percent of the gun maker’s sales so far this year.
Chief Executive Officer Chris Killoy told investors Wednesday new products — including the Mark IV pistols, the Precision Rifle and the LCP pistol — generated $118.8 million of the company’s $404 million in sales through the first nine months of the year.
“New products are a key driver of demand,” he said. “And we have some exciting projects underway.”
Killoy also praised the launch of Ruger’s AR-556 MPR — the multi purpose rifle — telling investors “we got really good traction in what’s been a very soft sector of the market right now.”
“And it really had all the right features on it, you know, it had the things that people are looking for,” he said. “Things that really made a good value for consumers. So, I think we’re seeing, as long as you come out with something new that excites consumers, even like a category like the MSRs, you can still get their attention and you can get some of those discretionary dollars.”
Deep discounting drove prices for modern sporting rifles down to unprecedented lows in the first and second quarter, Killoy said, followed by center-fire pistols over the summer.
“You saw prices out there for some of the off-brand ARs going down to $399 and it was some very, very heavy discounting,” he said. “Then in the summer months we saw it in the center fire pistols, in particular the 9mm center fire pistols … a lot of discounting, a lot of rebates, and that’s where we saw a lot of margin erosion, I’d say, across the industry.”
Ruger raked in $9.3 million in profits in its third quarter — a 53 percent decline over 2016, the biggest on record for gun sales as consumer fears of impending regulations stoked demand. It’s the second double digit loss for Ruger this year.
Killoy acknowledged the earnings slide in the company’s financial filings Tuesday. 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. Sales fell more than 35 percent to $104.8 million in the third quarter, according to the company’s earnings reports. Overall, Ruger’s gun sales trail last year by nearly 20 percent.
“We think there is a lot of good signs out there for us,” he told investors Wednesday, citing a growing, diversifying pool of gun owners. “We have to manage our way through this tough market we’re in right now, but with the new products that we have teed up and some of the things that are still on the drawing board, I like our chances better than the competition to be honest with you.”
It’s not unexpected for the industry to hit a weak point in the summer — historically salvaged by the onset of hunting season in the fall. This year’s comps, Killoy said, would be particularly difficult given the politically-charged environment bolstering the industry in the run-up to the 2016 election.