While the industry is in a better spot than it has been lately, firearms manufacturers still have a ways to go before they’re truly healthy again. That’s because much of the gain the industry is seeing this year — and what made a lot of buyers shop for guns on Black Friday — is being driven by the discounting of firearms by dealers.
During American Outdoor’s earnings conference call with analysts, CEO James Debney said it indicated people want a great deal before they’ll buy, so “we have a strong promotional strategy as well, which we think is very appropriate in this environment.”
It’s why Sturm, Ruger‘s (NYSE:RGR) earnings results, given last month, were comparatively worse and led to its stock getting battered. Ruger doesn’t really participate in heavy promotional activity around its guns and is willing to give up a few points of market share to preserve its profit margins. …
Discounts or not, the fact that gun buyers are back in the market is good news for manufacturers and investors. The stocks of both major gunmakers are down from the highs they hit in 2016 and have fallen further still in 2019.
The Black Friday rush was not something only department stores and clothing retailers experienced this year. Gun buyers were out in force, too, and firearms manufacturers might just have a very merry Christmas.
– Rich Duprey in Is This the Christmas Gift the Gun Industry Was Looking For?
