
Rugerâs third quarter profits declined 53 percent over 2016, the biggest year on record for gun sales. (Photo: Ruger/Facebook)
Sturm, Ruger and Companyâs top executive blamed the usual suspects this week for the gun makerâs second consecutive quarter of double digit earnings slide: weak demand, excess inventory and promotional overload.
CEO Chris Killoy told investors Wednesday the 53 percent decline in net profits â and the rest of Rugerâs financial statement, for that matter â proved just how âchallengingâ the third quarter was for the company, with little reprieve in sight.
âWe offered more promotions that were moderately more aggressive than last year, but we did not chase our competitorsâ offerings to achieve better short-term results,â he said. âWe will continue to take a measured and thoughtful approach to sales promotions and rebate opportunities considering both the short-term benefits and the potential longer term implications both financial and reputational.â
The dismal results come after a strong first quarter for the company, which reported $167.4 million in sales â a 3 percent decline over first quarter 2016. Sales fell more than 35 percent to $104.8 million in the third quarter ending on Sept. 30, according to the companyâs earnings reports. Second quarter sales likewise plummeted 22 percent. Overall, Rugerâs gun sales trail last year by nearly 20 percent.
âWe think there is a lot of good signs out there for us,â Killoy said, citing a growing, diversifying pool of gun owners. âWe have to manage our way through this tough market weâre 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.â
Itâs not unexpected for the industry to hit a weak point in the summer â historically salvaged by the onset of hunting season in the fall. This yearâs comps, Killoy said, would be particularly difficult given the politically-charged environment bolstering the industry in the run-up to the 2016 election.
Still, he said the unexpected popularity of bolt action products stood as a âreal bright spotâ during an otherwise average start to hunting selling season.
âLast year we saw people with the discretionary dollar spending that on modern sporting rifle category, and maybe passing over their bolt actions,â he said. âThis year ⌠weâve seen a decent amount of bolt action sales, particularly in some of those non-standard calibers.â
Killoy also praised the launch of Rugerâs AR-556 MPR â the multi purpose rifle â telling investors Wednesday âwe got really good traction in whatâs been a very soft sector of the market right now.â
âAnd it really had all the right features on it, you know, it had the things that people are looking for,â he said. âThings that really made a good value for consumers. So, I think weâre 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.â