Vista Outdoor’s leadership criticized competitors this week for keeping ammunition prices low, despite rising commodities prices and the threat of tariffs looming.
Chief Executive Officer Chris Metz told investors Thursday he won’t lose market share over the shortsighted decisions of other ammo manufacturers, suggesting more flexibility on specific calibers in order to keep up. Vista raised prices on its product lines in January and April, confident other companies would follow.
“We think it’s crazy and, frankly, personally I think it’s reckless that given the pressures we’re seeing in commodities and potentially tariffs, that our competitors are not following suit,” Metz said Thursday. “One of our competitors just came out of bankruptcy and the other one has historically been disciplined, but has just recently taken some price decreases. I think it’s fool’s gold because it won’t lead to long term share gain.”
Vista reported sales of $529 million through its first quarter ending July 1. Softening demand in both shooting sports and outdoor products spurred the 7 percent decline over 2017. Metz said rimfire ammo sales, especially, struggle to rebound after years of robust consumption.
“It is a portion of the ammunition market that we think will likely take longer to recover,” he said. “Other types of ammunition have seen improvements recently, such as pistol, big game rifle, and water fowl shot shell. Despite the improvement in certain ammunition categories, the overall ammunition market continues to vary week to week and month to month.”
Still, Metz said Vista’s pricing will “remain disciplined” in hopes of ushering in a “more rational” approach industry-wide. “People are extremely brand loyal and that’s why we think inherently discounts don’t really matter,” he said. “Consumers are going to shop. They’re going to buy the ammo they’re comfortable with and they’re going to buy the ammo that they’ve historically shot.”
Vista owns 55 companies in firearms, ammunition and shooting accessories, including Federal Premium, Speer and American Eagle.