Sturm, Ruger, & Company saw second quarter sales skyrocket 87% on strong sales from new products, but management noted that the buying-surge sparked by the November elections is showing signs of slowing. Despite a 14% quarter-over-quarter increase in sales, backlog for the company decreased 10% from 458,000 units to 412,000 units. However, surging sales of Rugers SR-556 assault-style rifle – which retails around $1,000 increased the dollar value of the backlog by almost $2 million. The SR-556 propelled the average price per order from about $275 a year ago to $400 this year.
In the companys first-ever conference call with analysts, president and CEO Michael Fifer suggested that the surge in firearms sales was “probably driven primarily by the change in the administration and fears over the new politics” and “also, to some degree, by the declining economy.” Fifer added later that “the big spike in demand is pretty much behind us.”
Fifer also attributed the declining in units ordered to large backlog in the first quarter that discouraged further orders, a prolonged ammunition shortage at retail that hindered retail firearms sales and stronger inventories throughout the distribution channel.
Firearms sales for the company, which account for 98% of total sales, jumped 94% for the quarter while castings which are used for internal use in firearms accounted for the remaining 2% and increased 28%.
RGR estimated that 50% of its year-to-date growth has come from new products, 25% from the surge in demand that began in Q4 2008, and the other 25% coming from an increase in market share.
Particularly, management touted the success of several self-defense-oriented firearms including two products management labeled “blockbuster” – the LCP (lightweight compact pistol) and the LCR (lightweight compact revolver). The aforementioned SR-556 and the popular SR9 9mm also were significant contributors to growth.