Ruger: Sales and Stocks Soaring

Ruger’s been selling a lot of guns. All gun manufacturers are doing well right now, but there’s doing well and selling like Ruger. In the last three months of 2012 their stocks went up a dollar per share, and that’s the tip of the iceberg for moving guns compared to today.

With legislators pushing for gun control Americans are doing what they do best: spending money. And they’re buying guns, naturally, stocking up on anything and everything.

It’s not just so-called “assault weapons,” it’s everything. If you’ve tried to find ammo in common calibers in the past couple of months, you know that the only stuff lining shelves is .17 HMR and if you’re lucky, some 20-gauge birdshot.

If anything, the rise in Ruger stocks stops well short of what their actual earnings should reflect. Ruger said they had earned $1 on every share of $141.8 million in the last quarter of 2012. Analysts were hoping for earnings of 82 cents per share and sales of $122 million.

Ruger has announced their 2012 earnings, and while they’re not talking numbers, CEO Mike Fifer said simply, “We’re selling everything we make. Demand for our products outpaced the growth in overall industry demand.”

While Ruger makes a couple of black rifles, if they’re specialists in anything, it’s diversity. The SR-556 is a tiny slice of Ruger’s guns, and they make everything from single-shot magnum rifles to pocket .22 revolvers.

The subject of Ruger’s success is nothing new. Their extremely large catalog of varied and unusual firearms has been at the center of their success for years on end. The same is just as true now, only more so.

One key to their consistently complete sales is that Ruger is not changing their pricing as a reaction to the increased demand. “Perhaps we have left some money on the table by not taking advantage of the demand,” said Fifer. He said that gun owner’s long memory would be heavily affected by anything remotely-perceived as price gouging.

Of course, this rate of sales isn’t expected to last forever. Morgan Dempsey Capital Management director Brian Rafn said, “We’ve had a massive build up. Guys are hauling out shopping carts full of ordnance.”

“With the economy moderately improving and some of the rhetoric dying down, it will be very difficult for the civilian gun market to sustain 20 million in sales for the next four or five years.”

Still, if Ruger has anything to say about it, they’ll maintain a healthy chunk of the market. Especially with news that the company will be returning to the shotgun business.

“We are hard at work on shotguns, and that’s one of those projects that should have been a year, and now it’s multiple years into the making. But I’m sure we will bring them to market one day soon,” said Fifer at the company’s latest earnings call.

Hopefully that doesn’t mean the return of the Ruger Red Label. Sure, that line had its fans, but it’s a saturated market and it has a lot of competition. The segment of the shotgun market that’s exploding today is semi-automatic competition and defense guns, and Ruger would be remiss if they didn’t go big.

But in truth, right now, even if they did bring back their double-barreled shotguns, they’d just fly off the shelves. Slap a picture of Joe Biden on the box and call it good.

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