The huffingtonpost.com’s take on guns is like Candide in reverse. When it comes to firearms, the anti-gun site’s writers live in the worst of all possible worlds. Every story on guns indicates a “gun violence” epidemic. Every study proves that owning guns is like juggling vials of anthrax. So when I read John A. Tures’ article Why Gun Manufacturers Are in Serious Financial Trouble “celebrating” AR-15 maker Colt’s descent into bankruptcy, I looked for the usual malicious prevarication . . .
. . . it’s not just Colt that’s going down the drain. Sturm, Ruger’s sales are dropping dramatically. So are Smith & Wesson’s (number two in the industry), both which are leading to dropping stock prices. It’s a similar story for gun stores, as one Georgia business reported difficulties even giving an AR away.
Following the Ruger link to money.cnn.com, we learn that . . .
Sturm, Ruger (RGR) of Southport, Conn., one of the most prominent gunmakers, reported a plunge in sales and profit this week that sent its stock into a tail spin on Thursday. Net sales over three months went to $98 million from $171 million a year ago.
Following the Smith & Wesson link (from last August) to its bloomberg.com source we learn that . . .
Smith & Wesson’s sales fell 23 percent to $131.9 million in the quarter ended July 31, the company said, missing the $134 million average analyst projection. The company, the second-largest publicly traded firearms maker, said slumping sales of long guns, including modern sporting rifles, drove 87 percent of the revenue decline. Net income dropped 45 percent to $14.6 million, or 26 cents a share, beating the 25-cent average analyst estimate.
Sales will be $530 million to $540 million in the fiscal year ending in April, the company said, backing off a previous forecast of $585 million to $600 million. Annual earnings will be 89 cents to 94 cents a share, instead of the $1.30 to $1.40 seen earlier.
There are plenty of theories in these articles about the reason for the drop, ranging from the HuffPo’s long-held contention that the post-Newtown boom was due to existing gun owners stocking-up against fears of confiscation, to more pragmatic analysis. Specifically, that Ruger and Smith over-extended themselves to satiate a huge spike in demand, over-producing ballistic hay while the gun rights sun went into hiding.
Let’s go with that. Here’s money.cnn.com‘s take on Ruger’s woes from back in October:
Sturm, Ruger makes a wide variety of guns, including M4 and Mini-14 military-style rifles, and sells them to distributors, who sell them to stores. It said “retailers [were] buying fewer firearms than they were selling, in an effort to reduce their inventories and generate cash.”
This is quite different from 2013 and earlier this year, when Sturm, Ruger CEO Michael Fifer complained about retailers placing “grossly unrealistic” orders with his company.
Here’s bloomberg.com’s more recent take on Smith’s troubles:
As enthusiasm for stricter gun control has subsided, prices for the long guns have slumped and desperate wholesalers have offered incentives like “buy four, get one free,” said Hornsby, 64. During the rush, he had to pay wholesalers incentives to get access to inventory.
“There’s not an immediate fear the government’s going to take them away so sales are back to a more traditional pace,” said Hornsby, whose store displays about 850 gun models. Assault rifles more expensive than $700 are the hardest to sell now, he said.
Again, it sounds to me like a simple supply and demand problem, where supply overtook demand and manufacturers stuffed the sales channel as fast they could (with plenty of encouragement from distributors and dealers). In plain language, a gun bubble burst. Bloomberg (of all people) nails it.
“Gun ownership has become normalized among a greater demographic,” said [Minneapolis-based analyst for Dougherty & Co. Andrea] James, adding that the long-term trend is still favorable for gun makers. “Are people buying as many guns this year as they were last year? No. Are people buying more guns than they were three years ago? Yes. The industry is pretty healthy.”
As indicated by the huge number of new micro-producers selling custom ARs at a variety of price points. Needless to say, huffingtonpost.com’s Tures can’t accept this common sense analysis, despite echoing it in his own article.
. . . folks are starting to realize that Barack Obama is not going to organize Jade Helm 15 to lock all conservatives in FEMA Death Camps in the basement of Wal-Marts or in the Michigan or Arkansas countryside (and yes, I’ve received those emails too). Assault weapons are not about to be eliminated across this country. But gun manufacturers will have a lot to be concerned about because the firearms issue isn’t just an ideology. It is, after all, a business as well.
The business of freedom has risks, but with all the new shooters flocking to gun ranges and, yes, gun stores, I wouldn’t bet against it.
Huffpoo / Bloomberg / Money quote?
“Poop to that” – Marvin Boggs
Huh. I never realized Wal-Marts have basements, apparently.
It’s where they keep all the .22!
Right before they sell it to their friends and families after they call them just prior to the truck arriving.
.22 ships —> .22 arrives —-> text msg —> .22 unloads —> buddies arrive —> .22 gone
.22 gone ___> Buddies put .22 up on auction site ___> Idiot buys .22 at 2x walmart price.
It’s hardly unusual for sales to drop off after an unusually active banner year or two which, as in this case, was largely spurred on by anti-gun politicians efforts to further restrict guns, ammo, and 2nd Amendment protections and rights.
Exactly. Any graph of sales data over time will give you a jagged line bouncing up and down if you simply connect the dots. If you wish to evaluate the true trend, then instead of focusing on one little line segment you need to zoom out and look at the entire graph. Some regression analysis wouldn’t hurt, either.
“…instead of focusing on one little line…”
This however is exactly what the anti-gun industrial complex honchos must do in order to make the misleading claims they use to deceive the public into believing their rhetoric.
They dishonestly mislead all the time, and they are masters at it, because it’s the only leg they have to stand on.
Is it just me, or does this smell like the exact same model they try to use to sell global warming/climate change?
Focus in a panic on the spikes in the graph and pretend it’s the end of the world rather than the normal fluctuations that occur in every natural or business cycle. I’m sure all of these companies would love to be able to predict with more precision the future demand for their products to avoid these sorts of hills and valleys, and they probably have a lot of high-paid analysts trying to do just that, but when you have a wild card like Obama and his cronies in power and a media that wants to wave every single bloody shirt they can find it must be a daunting task.
Don’t worry HuffPo. A Hillary POTUS will turn things around. And they’ll still blame the NRA for fear-mongering. The AWB pushing megalomaniac in the White House won’t have anything to do with it. It’ll be all the people and org’s fighting her that boosts the sales.
If Hillary wanted to ban Pespsi it would be the fault of the fear-mongering National Pepsi Association that stock would fly off the shelves. Not the banner in question.
Makes perfect rational sense.
“I want to take your Pepsi” from the mouth becomes “nobody wants to take your Pepsi” in the media. But of course that reality is just a conspiracy and no way would politicians and the media ever work together work manipulate the public.
I know. After hilarious rotting ham is elected, she may even outsell Obama.
All of the MSM operate from the same flow chart, all of which BEGINS with the acknowledged (among them) “truth” that all guns are bad, and anything that can be done to eliminate them is good, and they work from that desired end backward through any means that they think will accomplish ultimate elimination. Again, it isn’t about truth to any of them; it’s about winning; and anyway they can do is fine with them.
It’s call “narrative journalism”. You stick with a theme no matter what the facts are and cherry pick those that fit the narrative while ignoring the rest. SOP for the puffington roast.
Great, now use some of that spare capacity to ship more firearms and ammunition up here. Some things are far too hard to find that shouldn’t be (like a new Win model 70 in .308 or one of the Ruger 77/357s).
Another point lost on these geniuses is that it is the slow season for the gun industry. After tax returns, but before Christmas season is typically the slump that I can be sure to score a deal on a new gun. Just like other businesses, you gotta catch them when they’re hungry to get the deals. Add that to the lack of panic buying, over extension, etc.
I’m not much interested in the number of ARs or AKs (nor any other long-guns) sold. What interests me is the number of handguns sold; particularly to first-time buyers.
We aren’t going to win the war for gun-rights by increasing the median number of long-guns owned from – e.g., 3 to 4. We will win the war by increasing the number of voters who are invested in self-defense by gun. Just one gun suffices if that gun is on the nightstand every night or being carried most days.
For my purposes, gun sales don’t tell us much about our “market” penetration. What I’d prefer to see is demographic data on students taking First Step Pistol. While this data will certainly be incomplete, I imagine it would be so large as to be a representative sample. It would be particularly representative in those geographic areas where a newbie would be less likely to be tutored informally by a friend or neighbor rather than seek-out professional training. (Newbies who obtain informal training are apt to have been raised in a gun-friendly culture. Those who seek formal training are apt to be converts.)
This is a very good point and squares with increased numbers of CCW’s in states that have liberalized or eliminated their rules.
Just wait till next year when the dems nominate somebody with a long history of supporting gun Control and watch it rebound in a jiffy
First off saying, “the dems nominate somebody with a long history of supporting gun control” is redundant. They will nominate someone and if it is a dem, they will have a long history of being anti-gun. Since everyone knows that, sales should be rebonding now if anyone is paying attention.
Secondly, I see the dems downplaying the anti-gun angle for the campaign. I wouldn’t be surprised if they even make some slight pro-gun noises. Their supporters can read between the lines. I don’t see the gun-buying public reacting in a big way until one of these anti-gunners gets in office, gets settled and then actually lowers the boom. By then it may be too late.
Two comments. Went into a local Gander Mountain on Monday. I was the only customer. They were having an “up to 25% off all firearms sale.” Of course, they wouldn’t tell you which guns were at the full 25% (I asked). Their on-sale prices were a huge turn-off. To draw in customers, they had even put out several shelves full of .22. Still no customers. Maybe it’s the Field & Stream, Cabelas, and Bass Pro that have all opened close by in less than a year, but even they aren’t doing gangbusters as based on my anecdotal observations.
Second, is it just me or has Ruger chintzed up on their 22-45’s and Mark III’s. I was just handling some of them and they lacked the finesse I thought used to be in them. Either that or I have become a gun snob and look down on everything that isn’t a Buckmark. Good grief–their SR-22’s feels like pot metal. Anybody else have that feeling.
I’m surprised you didn’t ask the butler to put in an order for a new hand-crafted shotgun created by the finest Old World gunsmiths, with inlay and filigree. That is what a full-on Fudd “I support the Second Amendment if that means keeping an expensive European shotgun at the country club” would do you know. They’re the ones who generally look down their noses at all the “regular guns” . How dare manufacturers make guns that a mere peasant is able to purchase.
Fudds don’t shop at GM.
The problem Gander is running into is their markup above competition. I go to gander frequently for their range which for pistols is top notch, no huffy puffy weirdos and no range fee plus target crap. But with their prices i’ve noticed its all way up. So yay you’re having a giant sale only to be at close to a normal price. no thanks.
I find new guns at Gander priced above MSRP all the time, the used gun shelf at my local gander is a joke. A beat up S&W 669 for $649, or a Sig 228 also beat up for $10 less than the new one 3 shelves over. Whoever runs the Gander by me is a greedy crack head.
I saw a side by side break action 12 gauge for $199 3 days ago at the Rockford, IL location. At another time I saw a mauser 380 for $199 while r he same one costs over $500 at gunbroker but sadly I could not get it at that time.
True. The only place to buy a gun is at a Competitive gun show.
Maybe it’s the Field & Stream, Cabelas, and Bass Pro that have all opened close by in less than a year
Sounds like Cary,NC area.
Walked into the GM (since I was next door for an errand) and had to giggle at the Leatherman Sidekick priced at $60 before taxes since the day prior I received in the mail from Midway my Sidekick for $29 (including shipping).
GM’s primary purpose is to serve as the hands on showroom before buying online. I give them a chance to match online and they never accept it. Oh well.
One of the market factors I don’t see discussed is competition. Back in the day for handguns, you pretty much had Colt, S&W and a smattering of foreign guns that were either hard to find, or not well thought of. Buyers have a lot more choices now. Great imports, small builders and a huge used market backed up by the Internet and gun shows. There are even DIY kits now. I think the big manufacturers have reached a tipping point with competition, but that story doesn’t make the political hay that these so-called journalists want.
Hey, what’s going with this picture?
Did an OFWG pay some random racially ambiguous, young man to clean his gun… Because only racist, southern, old white men have and/or like guns, don’t-cha-know.
What are you talking about? Don’t you recognize an OFWG when you see one? That is Rachel Dolezal’s twin brother!
Very well done Michael…lol.
People are spending less money across the board, not just on guns. Wages are stagnant, prices are rising, people are spending more on food and energy (both of which, ironically, are omitted by the government from core CPI in order to under report the actual rate of inflation). Thanks to Obama (don’t) Care, among other things, more and more people lose their full time jobs and get multiple part time jobs, which do not pay as well as the single full time job they held before. Add to this the Fed’s manipulation of interest rates making our money worthless and you’ll get an idea why people don’t spend money on things they don’t need right now. But hey, the government has been saying for years now that we’re in a recovery, so it must be true, right? If by recovery they mean we’re still in recession but shhhh, don’t tell anybody while we manipulate some key numbers and distort the economy, then yeah, I guess they’re right.
Keynesian economics are destroying this country. Why is it so difficult to understand?
Multiple factors are affecting thw sales
1. Lack of funds
2. Lack of credit cards
4. Too many companies competing in a niche market
5. Many of the companies are pricing themselves out of sales
6. The availability of used firearms at reasonable prices
7. A renewed interest in concealable firearms including ultra-concealable firearms
Yup – Gotta dip into the gun fund to pay for all that affordable health care that keeps going up…. still… faster…with higher deductibles.
It’s called freedom Gene. You are free to pay the tax or pay the insurance, and you have the freedom to choose which one you would like to pay.
Demand went up and prices went up. Pre panic an ak 74 was sub $400. post it is $600. Demand is down prices aren’t, either they’ll drop and sell more or they wont and wont.
For myself, my current living situation precludes me from getting a long gun because I don’t have room for a safe big enough to contain one. Best I can do right now is a handgun safe.
Van down by the river?
Do you have children? If yes buy a locking case.
I grew up with locking “cabinets” i dont know why suddenly theres all this safe business. Make it harder to access and teach people not to touch stuff it’s pretty simple.
The gun boom is/was a bubble, just like the housing boom. Just because we still like guns doesn’t mean the market hasn’t been oversaturated, or that people have less disposable income. Eventually the sales and profits will drop back to “normal.” Of course Pravda, I mean Huffpost is going to make it look like companies are going under, but for example, look at Sears vs Colt. Would they argue that the fall of Sears means that consumers no longer like cheap clothes and poor installed tires?
I wouldn’t say the bubble burst just yet. It’s still pretty high. It’s just that now people are looking at other manufacturers rather than the big ones, because they would rather have a custom firearm at $2000, than an “off the rack” firearm at $2000.
Ah yes economics 101, supply and demand. Hopefully the reduction in gun sales will enable the ammunition and reloading components supply to come back to normal levels. I have not been able to buy powder for over 18 months as it has not been on the store shelves. The situation was so bad that I wrote to Alliant powder and asked if they were still in business. They wrote back to me and said yes we are still producing rifle and pistol powder just as fast as we can. Our products fly off the store shelves just as fast as it is restocked.
Alliant also said that it looks as though the situation is easing, as ammunition supplies are slowly returning to normal levels and that the powder situation should improve. This is due to the slow down in firearm sales and expenditures of ammo and reloading components.
Military style mini 14 hahahaha
I know, I caught that one too. The Mini is a good little ranch gun, but hardly military style.
It has a magazine dangling from the bottom. That’s the “military” identifier for these people.
Some folks are sufficiently tooled up, don’t need to add to the collection. I probably have as many used/vintage handguns as new ones purchased over the course of the last 8 – 10 yrs. My gun cabinet is full. Too full to add more guns for now. Guns are durable goods, can last last for generations. It not like needing new shoes every year. It’s normal supply/demand correction.
California had two significant changes in gun laws that created a push in gun sales in the past two years:
1) January 1, 2014 started CA registration for long guns increasing 2013 sales and..
2) January 1, 2015 ended single short exemption preventing the purchase of nonroster semiauto pistols which increased sales in 2014.
More progtard heel clicking in attempt to remake the world. Everything is a “social construct” See also Will’s column. http://townhall.com/tipsheet/danieldavis/2015/06/17/george-will-social-constructs-allows-liberals-to-create-any-world-they-want-n2013743
BUY GUNS !!! Help take some of the slack out of the market. Reward the producers of the glut, we’ve been beggin’ for a while, let’s not abandon, let’s not Detroit-ize our gun mfr’s. The panick and slack are all the same campaign to kill gun companies, Work harder in the slack times than the lean (says so in the Bible).
Check the stock prices. S&W is SWHC. Ruger is RGR. Both have done pretty well in the last 5 years.
“… Mini-14 military-style rifles…”????
They skewed the facts by concentrating only on Ruger and S&W. Of the last 6 guns I have bought new, 5 were “off brands” with only one being a S&W. Their “facts” are like using only GM and Ford as representing all car sales and saying there is a sales disaster. Like they say “liars figure and figures lie”.
I’ve noticed a marked decrease (within reason) on prices of firearms over the past two years. I got my first AR, a Colt LE6920 at the beginning of 2014. While prices weren’t at their post-Newtown spike, they were still a tad bit pricey, especially compared to today. I paid a hair over $1000 for my LE6920 MOE edition. Nowadays, the same rifle can be had for $800 or so. Didn’t bother me, I needed an AR and I budgeted for it.
Pistols haven’t gone down in price as much, from what I can see.
The short answer is that there’s a glut of ARs out there. Everyone makes one or something close to one it seems. Even the specialty-caliber parts are coming down. I just finished an 300 BLK build and managed to keep it around $1000 using quality components, sans optic, but regardless it’s a functional rifle.
We knew the anti’s would jump on the Colt issue. Saw that one coming. Easy to refute, they should know better, but they never learn.
I think we’re just reaching peak AR. Gun industry needs a new fad.
Meh I don’t see a big problem…except the goofs who grossly over price or don’t want to deal. Like Gander Mountain finally running mediocre sales-their prices are light years higher than what one can get on the interwebz. A summer of civil unrest will produce a big spike in gun buying as well as the hildebeast being a clinton…meanwhile get that cheap ar while you can…
If true, my guess would be that people increasingly prefer private sales and 80% kits. There are plenty of guns out there, and people don’t want government involvement, or to be financially raped by large corporations just because they choose to be a gun owner.
Overall sales numbers are not available for the industry, this is why the NSSF uses the number of NICS checks as a proxy. Historically approx. 42.5762% of the NICS checks are for purchases at a federally licensed dealer. A little perspective is in order. For the 79 months since Barak Obama’s election NICs checks are up 92.046% as compared to the previous 119 months (I threw out Nov. ’98 since it was the first month of checks and was abnormally low). The number of checks Jan-May 2015 are down 12.075% from the same period two years ago, but the context to remember is that Dec 2012 through March of 2013 was the post Sandy Hook surge in sales, (all four months were at least 10% above the previous all time high of the 2 million checks done November of 2012). May of 2015 had the most Nics checks of any May since checks were started so it is a little premature to discuss the demise of the industry.
Overall sales numbers may not be available, but production and import numbers are. For some reason the ATF hasn’t released the yearly figures for 2013 yet. I expected those a couple of months ago. They usually release the report in the early spring. The reports are always one year behind, too.
Even superman is tooling up.
Leave it to an anti-gun extremist media outlet to clutch at and exaggerate any data to support their anti-gun narrative, even if it equires twists of facts and logic and the embellishment of biased interpretation of them to fabricate a falsehood from objective facts.
always goes this way, As passage of AWB approached , prices and sale spiked , then later collapsed. prior to Y2K sales and prices spiked , then in 2001 sales and prices collapsed . newton etc .. same thing .
I expect some great bargains will be available soon.
I find this article extremely enlightening with regard to Sturm Ruger sales and mass produced manufacturers in general. Speaking frankly, Ruger specifically semi-automatic platforms are suffer from terrible design oversights and even worse precision (ability to maintain consistent group size).
I own an SR556 and previously owned a newer model Mini-14. I am a seasoned handloader and yet even with the most meticulously refined load development, my SR556 is barely able to group 1.5-2″ at 100 yards. The Mini was far worse and would only just hit 2″-3″ groups after same development. What’s worse is that when calling Ruger about accuracy expected from a new SR556 they said 6″ guarantee… AT 50 YARDS!!!????
Perhaps more frustrating is the design of the SR556 pinned gas block that CANNOT be removed to install free floating handguard or any aftermarket handguard for that matter. This is virtually unheard of in the “black rifle” market which is known for customizability.
With my 308 Weatherby Vanguard (stock barrel action with custom stock & trigger) I’m consistently 1 -1.25 MOA past 800 yards and .75 at 100 yards.
Having tuned many rifles in both semi-automatic and bolt action in .223, .308, MOA accuracy is an expectation with proper development. Ruger has churned out poor accuracy/design platforms that are affecting its reputation.
I for one will not be purchasing any more Rugers after my experience with their products. I would suspect that penny pinching mass production manufacturing practices with poor quality control and inflated marketing budgets are hurting some larger manufacturers more than smaller companies such as Daniel Defense, Rock River, Weatherby, Sako, etc.
Let’s hope that all remaining companies take heed and work to improve accuracy/reliability per dollar as it is crucial to keeping customers coming back for life and growing our sport.
All the giant behemoths are suffering under the death by 1000 paper cuts of garage manufacturing. I have a CnC mill in a room smaller than most 1 car garages. I have no overhead, everything is paid for. Want a $40 AR lower? Oh, sorry, ARs suck.