Industry Battles Through Season Of Normalization
The industry experienced a major summer sales slump this year, the first in recent history. The downturn impacted numerous segments of the industry, most significantly firearms. Most firearm manufacturers and importers expected fewer firearm sales this year — compared to record-setting 2013 — acknowledging that the market was establishing a new normal. However, for a number of manufacturers, the drop in sales was steeper than expected.
Such downturns, industry experts say, are nothing new and the industry will recover as it has a number of times.
“We expect the industry will continue to deliver growth over the long term,” said James Debney, Smith & Wesson Holding Corp. president and CEO.
To stimulate sales, manufacturers — some for the first time — are offering consumers generous rebates, adding extra products to firearms purchases (including magazines and ammunition) and creating buying interest with Internet-based sweepstakes.
Above Historical Levels
Remington Outdoor Co. reports its quarterly firearm sales ending June 29 were $94.2 million, a decrease of $121.3 million, or 56 percent, as compared to the three months ending June 30, 2013. Firearm sales for the six months ending June 29 were $229 million, a decrease of $181 million, or 44 percent, as compared to the first six months of 2013.
“In the first half of 2014, sales have declined, in particular our modern sporting rifles, handguns and centerfire rifles. Concern over more restrictive government legislation contributed to strong demand in 2013, which has now returned to more normalized levels. Firearm sales were also down in the second quarter of 2014, due to the fact that we ceased production and sales of our Remington Model 700 during this time, while we focused on the product safety recall,” according to Remington’s quarterly report.
Remington reports the product safety recall delayed “many of [its] new product introductions.” The company says it resumed production of the Remington Model 700 in the third quarter.
“Although sales for the six months ended June 29, 2014 are lower than the six months ended June 30, 2013, we believe our sales continue to remain above historical levels,” Remington officials said.
Ruger reports its overall sales during the second quarter, which ended June 28, were $153.7 million, compared to $179.5 million during the same quarter in 2013, a 14 percent decrease. For the first six months of this year, compared to the same period in 2013, Ruger’s sales declined 4 percent from $335.4 million to $323.5 million.
“The estimated sell-through of our products from distributors to retailers in the second quarter was adversely impacted by the reduction in overall industry demand, the aggressive discounting of many of our competitors and the absence of recent significant new product introductions from the company,” said Mike Fifer, Ruger CEO.
Despite the decline, Fifer said there was good news.
“The estimated sell-through of our products from the independent distributors to retailers for the six months ended June 28, 2014 was the second highest in the company’s history, exceeding the estimated sell-through from the first half of 2012 by 83,100 units or 10 percent. In the first half of 2014, the company returned $20 million to its shareholders through the payment of dividends.”
Smith & Wesson reports its sales for fiscal 2015 first quarter, which ended July 31, were $131.9 million, a decrease of $39.2 million, or 23 percent, compared to the first quarter last year. The company says the primary reason for the decrease was lower sales of long guns, including modern sporting rifles, which accounted for 87 percent of the first-quarter decline.
“We believe the current environment reflects high inventories industry-wide resulting from channel replenishment that occurred following an earlier surge in consumer buying,” Debney said. “That environment, combined with typical seasonality that slows consumer buying activity during the summer, is causing us to lower our financial outlook for fiscal 2015. We expect that these conditions will have the largest impact on our second fiscal quarter, especially on sales of our modern sporting rifles, and that we will return to a more normalized environment in the second half of our current fiscal year.”
Debney related confidence in the company’s future.
“We believe that our operational and financial strength and flexibility will benefit us in the short term, and we remain focused on our strategy to take handgun market share,” Debney said.
SIG SAUER P226
SIG SAUER Arms Two Police Agencies
SIG SAUER announces two state police agencies have selected the company’s pistol as their service sidearm.
The Pennsylvania State Police selected the SIG SAUER P227 in a contract that calls for more than 5,000 pistols. The P227 pistols are being issued to the current class of state police cadets at the State Patrol Academy and will be distributed to all troopers across the state by the end of the year.
“For decades, the Classic series handguns have been a dependable partner to tens of thousands of law enforcement officers,” said Tom Jankiewicz, SIG SAUER executive director of L.E. sales.
The North Carolina State Highway Patrol (NCSHP) has selected the P226, chambered in .357 SIG, as the new duty pistol for its troopers.
“For law enforcement officers who work around vehicles and safety glass, the .357 SIG is a fantastic choice for a duty pistol caliber,” Jankiewicz said.
The NCSHP has more than 1,600 sworn troopers. SIG SAUER will deliver 1,800 P226 handguns to the agency.
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