Sales for Sturm, Ruger & Co, one of the biggest firearms makers in the US, slowed for the first quarter in about four years.
The company reported earnings on Wednesday (July 30) and its stock got crushed, falling by as much as 11%, and pushing its decline in 2014 beyond 30%. Sales shank by 14% from a year ago.
This, and the experience of sporting goods retailers, suggests that demand for firearms in America is waning. But for gun control advocates, it is not as good as it sounds. As we have discussed previously, sales of firearms — and in particular, bullets — soared last year, amid fears that lawmakers would impose stricter controls in the aftermath of the massacre in Newtown, Connecticut in late 2012. That hasn’t happened, and gun control is no longer on the political agenda. So the panic stockpiling has subsided and the inflated demand for guns and bullets is merely returning to normal.
On its earnings call, Sturm, Ruger & Co’s CEO Michael Fifer acknowledged as much.
Our accessories business is much, much smaller than our firearms business, and last year, however, it spiked because [the politicians] were all trying to grab a headline and they were going [to] limit magazine sales, for example. And so what did the consumers do: they went out of their way to buy every magazine they could get their hands on, for fear that it would be outlawed, and they wanted to get them so they could be grandfathered.
The company said background checks by the government’s National Instant Criminal Background Check Systems (NICS) declined by 12% during the quarter, another sign that sales have slowed.