Winchester predicts military sales will exceed 25 percent of its business in 2018, according to the company’s top executive.
Olin CEO John Fischer told investors Wednesday the growth in military sales in 2017 helped offset a challenging commercial year for its ammunition product line, Winchester.
“Well, historically, we have always said that between 10 percent and 15 percent of Winchester’s sales were to the military,” he said. “I think this year, you’re going to see that be more in the range of 25 percent of the sales will be to the military. And that is a combination of higher absolute military sales and a lower commercial contribution to that.”
Winchester raked in just under $438 million in net profit its fourth quarter, capping off what Fischer described as the ammo’s “weakest year” since 2012.
“I would say, as we look at 2018, the biggest issue is the higher raw material costs, and at the moment, as I said, the ability to get sufficient price to offset that,” he said. “And I would just offer editorially, Olin has announced price increases that would be sufficient to offset what we’ve seen in commodity metal costs, but the market has not followed that at this point.”
Fischer said double digit price increases in copper, zinc and lead last year will only worsen in 2018.