With no extra cash in their pockets from inflation, people aren’t running out to buy guns as often as they did last year, officials at Sturm, Ruger & Company said as they analyzed the drop in sales and profits company declared.
But sales of his vintage firearms are still going well, keeping workers at his Newport plant busy, though much of the company’s expansion in North Carolina still lags behind.
Sturm Ruger reported quarterly net sales of 139.4 percent, down 22 percent, resulting in net income of $19.9 million, or $1.03 per diluted share, which was just over half of the equal to the amount reported in the third quarter of 2021.
Year-to-date revenue totaled $446.6 million, down 21 percent year-on-year, and profit of $69.8 million fell by nearly $50 million.
Record sales in 2020 and 2021 were partially attributed to the turmoil surrounding the presidential election and its aftermath. The run-up to the midterms was relatively tame, but Ruger officials instead focused on the economic rationale for the current downturn.
“Consumer demand has been dampened in part by inflationary pressures, which often constrain discretionary spending,” CEO Christopher J. Killoy said in a press release.
In addition to the lower demand, there are rising raw material prices. The price of stainless steel is up 7 to 8 percent year-on-year, carbon and alloy steel is up 15 percent and aluminum is up 21 percent, and the price of diesel is pushing prices even higher, Killoy said in a conference call May 3. November .
“It’s not just about prices, it’s also about supply chain issues with sourcing certain steels, but I think it looks like diesel has stabilized, at least for now,” he told Call.
He said the company has so far resisted price hikes, even though the average price has risen due to a mix of newer products. Price increases usually come around the holiday season, and the company is looking into that this year, Killoy said.
Weapons are piling up both at the plant and in the shop. Total inventory is now 412,000 units, compared to 131,000 a year ago.
And the company isn’t laying off employees. Staffing levels at the three-state facilities remain between 1,800 and 1,900 in Newport, North Carolina and Arizona.
“We’re still confident in our factories, we’re trying to tune a little more aggressively than others, particularly in New Hampshire at our Newport facility, where we make many of our legacy product lines, all of our revolvers, our 10/22 and some of our bolt-action rifles” said Killoy.
The company’s biggest investment, however, was in North Carolina, where it spent $8.3 million to purchase a second 225,000-square-foot facility that it had leased.
Meanwhile, the company reported a dividend of 47 cents for the third quarter, less than half the dividend for the third quarter last year.