Profits at Sturm, Ruger & Company, Inc. fell 36.2 percent in the third quarter on lower gross margins amid promotional pressures. Sales improved 1.2  percent, the company’s first gain in five quarters.

The firearms company announced that net sales were $122.3 million for the third quarter against $120.9 million a year ago.  Earnings reached $4.7 million, or 28 cents a share, compared with $7.4 million, or 42 cents, the prior year.

Gross margins eroded to 18.5 percent from 20.5 percent. Operating expenses were about flat, at 15.5 percent versus 15.2 percent the prior year.

For the nine months ended September 28, net sales were $389.9 million, down 5.6 percent from $413.2 million a year ago. Diluted earnings were $1.15 per share, down from $2.13.

The company also announced that its Board of Directors declared a dividend of $0.11 per share for the third quarter for stockholders of record as of November 13, 2024, payable on November 27, 2024. This dividend varies every quarter because the company pays a percentage of earnings rather than a fixed amount per share. This dividend is approximately 40 percent of net income.

Chief Executive Officer Christopher J. Killoy commented on the 2024 results, “The diversity of our products has been instrumental to our performance this year. We capitalized on the strong demand for several of our product families, including the Ruger American Rifle Generation II bolt-action rifles, the Marlin lever-action rifles, and the Security-380 pistol, maintaining our market share without sacrificing our long-term focus or pricing discipline. Despite the current promotion-rich environment, the estimated sell-through of our products from our independent distributors to retailers increased while our finished goods inventory and our distributors’ inventories have decreased by 125,000 units in the past year. We are well positioned to increase production entering the traditionally stronger fall and winter selling seasons, allowing us to capitalize on the pent-up demand for our more sought-after products.”

Killoy discussed Ruger’s storied history, “Developing innovative new products to drive growth, excitement and profitability has been the hallmark of Ruger since its inception 75 years ago. We are proud to have introduced so many new offerings in this milestone year.” These include:

  • American Rifle Generation II family of rifles
  • The Marlin 1894, 1895 and 336 lever-action rifles
  • LC Carbine chambered in .45 Auto and 10mm Auto
  • 75th Anniversary Mark IV Target pistol
  • 75th Anniversary 10/22 rifles
  • 75th Anniversary LCP MAX pistol
  • 75th Anniversary No. 1 rifle
  • Mini-14 rifle with side-folding stock

Killoy continued, “We are not done. Keep an eye out for an exciting new product launch in the coming months.”

Killoy concluded with an update from the National Association of Sporting Goods Wholesalers Annual Exposition, “We were thrilled to be recognized by our wholesale customers with three industry awards at this year’s NASGW Show in Kansas City, Missouri. We were named ‘Firearm Manufacturer of the Year’ for the second consecutive year and the 12th time in the past 15 years. Additionally, the Ruger American Rifle Generation II rifle earned the NASGW-Poma Caliber Awards for ‘Best New Rifle’ and ‘Best New Overall Product.'”

Killoy himself was honored with the NASGW “Chairman’s Award,” the highest honor from the NASGW Board of Directors given to those who have significantly impacted the outdoor shooting sports industry.

Killoy made the following observations related to the company’s third-quarter 2024 performance:

  • The estimated unit sell-through of the company’s products from the independent distributors to retailers increased 4 percent in the first nine months of 2024 compared to the prior year period. For the same period, NICS background checks, as adjusted by the National Shooting Sports Foundation, decreased 3 percent.
  • Sales of new products, including the Security-380 pistol, Super Wrangler revolver, Marlin lever-action rifles, LC Carbine, Small-Frame Autoloading Rifle, and American Centerfire Rifle Generation II, represented $113.3 million or 31.2 percent of firearm sales in the first nine months of 2024. New product sales include only major new products that were introduced in the past two years.
  • The company’s and distributors’ finished goods inventories decreased 26,500 units and 98,600 units, respectively, compared to the third quarter of 2023.
  • Cash provided by operations during the first nine months of 2024 was $35.5 million. At September 28, 2024, Ruger’s cash and short-term investments totaled $96.0 million. Ruger’s current ratio is 4.5 to 1 and Ruger has no debt.
  • In the first nine months of 2024, capital expenditures totaled $17.2 million related to new product introductions and upgrades to its manufacturing equipment and facilities. Ruger’s expects its 2024 capital expenditures to approximate $20 million.
  • The company returned $39.3 million to its shareholders in the first nine months of 2024 through:
  • the payment of $10.0 million of quarterly dividends, and
  • $29.3 million through the repurchase of 699,000 shares of its common stock at an average cost of $41.99 per share, representing 4 percent of its outstanding shares.
  • At September 28, 2024, stockholders’ equity was $314.9 million, which equates to a book value of $18.76 per share, of which $5.72 per share was cash and short-term investments.

Image courtesy Ruger (Marlin 1894)/Field & Stream