There’s never been a better time to be a gun owner, according to gunmaker Sturm Ruger.
While he was campaigning, President Donald Trump promised voters fewer restrictions on assault-weapon sales. The National Rifle Association endorsed him as a candidate.
And after he won in November, some analysts who cover the industry became concerned that gun sales would suffer, since prospective gun owners may drag their feet because they no longer fear a difficult buying process.
Sturm Ruger allayed some of that concern on Thursday when it reported fourth-quarter earnings, which showed a 6% year-on-year increase in sales to $152.4 million. Sales jumped 21% in 2016 from 2015, reflecting some of the last-minute rush to buy at a time when several polls showed Trump out of favor with voters.
During the company’s earnings call, Bill Ledley, an analyst at Cowen, asked whether Sturm Ruger thought the industry had entered a permanently lower level of demand given the Republican sweep of the White House, the Senate, and the House of Representatives.
“It appears to me, if you look over multiple years, that there’s wider acceptance of guns, wider availability,” said CEO Michael Fifer. “There’s more exciting, new products from all the competitors, not just Ruger. There’s more reasons to have guns now than ever before.”
However, investors don’t seem to be buying this argument just yet. Gunmakers’ shares plunged on the day after Trump won. Sturm Ruger fell 14% on November 9, and is down 22% since then.
This was Fifer’s full response to the question of lower demand (emphasis ours):
“I think we’ve kind of seen the story before where you’ll get a big politically-driven spike: they tend to be fairly short and they’re followed by an offsetting decline in demand for a while, and then everything’s returned to what I would call normal.
You’ve got the same factors driving interest. You’ve got more concealed carry in more states. You’ve got more new shooters coming along. You’ve got – generally, it’s more socially acceptable to admit to your friends that you actually like guns and enjoy having them, and by the way, come look at the newest one I just bought, let me show it to you.
All that stuff drives demand. And in some municipalities, you have the cops backing off. They’re being seen by the media too often as the enemy. And so, they’re backing off, and crime rates in those cities are soaring to the roof. Those people could care less who’s President. They want to defend themselves.
So, all of those drivers come back, so every time you have a really tiny spike or some political reason, it’s usually offset. I think we could be observing that now. And then it returns to normal. And I don’t think any of the other reasons have changed, so I doubt that the new normal will be materially lower than where we were going before.
It appears to me, if you look over multiple years, that there’s wider acceptance of guns, wider availability. There’s more exciting, new products from all the competitors, not just Ruger. There’s more reasons to have guns now than ever before. And so, I’m not going to read too much into the current situation.”