Smith & Wesson: Americans are buying fewer guns
by Aaron Smith

Shares of the gunmaker plunged nearly 10% Friday morning as it dawned on investors that the once high-flying gun industry is coming down to Earth.

The gun industry has experienced an intense run-up in demand over the last couple years, fueled by concerns of more rigorous gun restrictions in the wake of President Obama’s reelection and a series of mass shootings including the Sandy Hook massacre in Newtown, Conn.

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Gun enthusiasts stockpiled the military-style semiautomatic assault rifles, exhausting the supply and driving up the prices. But Obama failed to get a bill through Congress that would have placed restrictions on these guns, alleviating concerns that they would be hard to come by. As a result, rifle sales are suffering.

But there are still signs of growth. Smith & Wesson reported a hefty increase in handgun sales, buoyed by growing consumer interest in self-defense. Chief Executive Officer James Debney said Thursday that unit sales for handguns jumped 30% in the most recent quarter.

Still, Debney said the gain in handgun sales was offset by soft demand for “modern sporting rifles” — industry parlance for semiautomatic rifles.

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Debney blamed the weakness in rifle sales for the company’s overall slump in revenue. But analysts who follow the company see hope in burgeoning handgun sales.

“Compact guns and polymer guns are selling really well,” said Brian Ruttenbur, gun analyst for CRT Capital. “They are ramping up production dramatically.”

Ruttenbur said that Smith & Wesson’s latest line of M&P compact pistols is so popular that retail supplies are running thin.

“You can’t find an M&P gun on the shelf,” he said. “This is their competitor to Glock.”

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For the fourth quarter, Smith & Wesson (SWHC) reported a decline in net sales of more than 4% to $170 million and a 13% drop in income from continuing operations to about $25 million.

Company executives preferred to emphasize record sales of $626 million for the fiscal year, up 6% from the prior year.

“We are very pleased with our record results for fiscal year 2014, which include the highest sales, gross margin and profits in the company’s history,” said Debney, in a press release. “Our successful performance was driven by robust consumer demand for our products, combined with carefully managed increases in our manufacturing capacity.”

Smith & Wesson projects that net sales for fiscal year 2015 will dip to a range of $585 million to $600 million.

Shares of rival gunmaker Sturm Ruger (RGR) also fell Friday, but its drop was less dramatic.

NEWTOWN, Conn. — Outdoor Channel, America’s Leader In Outdoor TV, has committed to a Pinnacle-level sponsorship for the Shooting, Hunting and Outdoor Trade ShowTM (SHOT Show®) for the fourth consecutive year.

Pinnacle is the highest sponsorship level associated with the SHOT Show, which is the largest trade show of its kind in the world, attracting more than 60,000 attendees and 1,600 companies exhibiting firearms, ammunition, outdoor apparel, law enforcement equipment, optics, cutlery and related products and services.

The SHOT Show is owned by the National Shooting Sports Foundation (NSSF), the trade association for the firearms, ammunition, hunting and shooting sports industry, and is produced and managed by ConvExx. -Reported By The NSSF

Rock Island Armory, the world’s largest seller of 1911 pistols, has introduced a new look for their entire line of popular handguns. Guided by customer feedback and a shift to provide a more streamlined look, Rock Island Armory has moved their logo from the side of the slide to the back of the slide displaying the distinctive Rock Island Armory logo. The company is now shipping all 1911 pistols with the new look.

“Two of the things that are important to us are staying true to the legendary standard platform of the 1911 and the second is listening to our customers,” said Martin Tuason, President of Rock Island Armory. “We were ready to refresh the look of our pistols and we heard a lot of feedback that the subtle change to a smaller logo at the back of the slide would give our 1911’s a more distinctive and streamlined look.”

The new visual change to the company’s 1911 pistols follows on the heels of the addition of rubber grips to the 1911 Tactical Series. Rock Island Armory’s global lineup of 1911 pistols includes the GI, Tactical, 2011 Tactical, Match, MAP/MAPP and the company’s revolutionary TCM series.