We’re armed to the teeth. America is, that is. We’re buying more guns and ammo than ever before, and the gunmakers just can’t keep up. Sturm, Ruger & Company (NYSE:RGR) reported earnings on Monday that showed it was shooting out the lights, and not only for this quarter but probably for several quarters to come.
As the anti-gun rhetoric ratchets ever higher, Americans are rushing out to make sure they’re able to protect themselves before the clamps are tightened. As Ruger noted in its earnings release, background checks through the FBI’s NICS database surged 46% in the first quarter.
Yet Americans themselves are less in favor of stricter gun-control measures than they were just one month ago. According to a new USA Today poll, less than half of those surveyed favored new laws. As the horror of the Sandy Hook school shooting recedes, Americans are returning to their traditional stance of believing the current laws on the books ought to be enforced before new laws are enacted.
What the efforts to gin up support for gun bans has done is motivate many Americans to buy a gun now rather than wait till later. Ruger reports that for the first time ever, it produced more than half a million guns in one quarter and shipped more than half a million. This was despite limiting incoming orders from independent distributors as a means of keeping backlog from growing beyond its control — because backlog already stands at 2.1 million units, more than double where it was a year ago!
Smith & Wesson Holding Corporation (NASDAQ:SWHC) experienced similar growth, with its quarterly report last month showing a 45% jump in overall gun sales. Handgun sales soared 36%, while modern sporting rifles — what the anti-gun crowd calls “assault rifles,” but which are anything but — more than doubled. Backlog at S&W also blasted higher, rising 236% from last year and double what it was just three months ago.
While the gunmakers are on target with growth, we’re seeing the same thing happen at the gun sellers. Cabelas Inc (NYSE:CAB) reported that it’s seen such an influx of gun enthusiasts into its stores that its margins were slightly hurt because guns and ammo carry lower margins. Gross profits, however, actually jumped.
Dicks Sporting Goods Inc (NYSE:DKS), on the other hand, realized it was shooting itself in the foot by refusing to sell handguns and modern sporting rifles at its stores. To get around the self-imposed policy and cash in on the demand, Dick’s is opening a new retail concept store under the legendary Field & Stream name that will sell handguns.