Reestablishing A Strong Sales Footing

The industry continues to navigate a soft, yet sometimes encouraging market, in a drive to reestablish a strong sales footing — and profits. Companies throughout the industry are making major adjustments in sales projections, tightening budgets, while introducing an impressive number of new products and offering plenty of deals to attract consumers across all product lines.

This year’s show season, along with the 2014 NASGW Expo, provided a much-needed morale boost. Overall, there was an upbeat atmosphere at the shows, with buyers actually buying. There was also a strong desire to forget 2014 and get on with business. An encouraging, welcome sign.

While sales are not setting records, they are stabilizing. In February, NICS conducted 1,280,825 (NSSF-adjusted) background checks, a 1.3 percent increase over February 2014. It was the second highest February for the 16-year-old NICS system. Not surprisingly, the highest February was in 2013 when 1,634,309 (NSSF-adjusted) checks were conducted.

Consumer Coming Back

In late February, Ruger reported that its 2014 sales were $544.5 million, compared to $688.3 million in 2013, a 20.89 percent decrease. During its 2014 fourth quarter, Ruger reports is sales were $122.6 million, a drop of 32.6 percent compared to $181.9 million in the 2013 fourth quarter.

“The strong demand experienced in 2013 remained through the first quarter of 2014 and much of the second quarter of 2014,” said Michael Fifer, Ruger CEO. “However, during the latter half of 2014 demand for our products declined significantly.”

Ruger reports new products introduced in 2014 represented $89.4 million or 16 percent of firearms sales. In 2013, Ruger new products produced $195.8 million or 29 percent of firearms sales.

In 2014, Ruger returned $55.4 million to its shareholders through the payment of $31.4 million of dividends, and the repurchase of 680,813 shares of common stock in the open market at an average price of $35.22 per share, for a total of $24.0 million.

Despite the downturns, Fifer said consumers are returning to the market.

“I think that, in general, we started to get a sense, mostly anecdotal, that the consumer was coming back late in the year [2014]. And that’s continued right through to January and February [of this year],” Fifer said, during a Feb. 26 earnings conference call. “And I think it makes sense when you think in terms of, there was a bit of over indulgence in 2013 and then a, frankly, expected pull back through much of 2014.”

That absence is now in the past, Fifer says.

“I would guess, after the consumers had denied themselves for a better part of the year, it was time to come back and start enjoying the sport again,” Fifer said.

Improved Inventory Situation

In early March, Smith & Wesson Holding Corp. reported its 2015 third quarter sales, which ended January 31, were $130.6 million. This is a 10.5 percent decrease compared to sales of $145.9 million during the 2014 third quarter.

In firearms, S&W reports $14.5 million in sales during the quarter, a 14.7 percent decrease from the third quarter of 2014. Handguns declined $6.8 million (-6.8%) and long guns were down $13.5 million (-39.8%).

“Our third quarter results reflect the successful navigation of a normalizing firearm market following an earlier consumer surge in firearm purchases, combined with the ongoing focused execution of our long-term strategy,” said James Debney, S&W Holding Corp. president and CEO. “Sales in our firearm division exceeded our updated expectations, reflecting solid orders from distributors and key retailers at the start of our annual industry show season in January.”

Debney also said Battenfeld Technologies (BTI), which S&W acquired in December 2014, is expanding the company’s offering of firearm accessories.

“At SHOT Show in January, BTI unveiled 38 new products,” Debney said. “We are excited about the opportunities for additional growth and profitability that our newly established accessories division will provide us.”

Looking to the future, Debney said there has been improvement in distribution levels.

“In general, we believe the industry-wide channel inventory situation improved across most product categories in the third quarter, recovering somewhat from the channel over-replenishment that existed following the last consumer surge in firearm purchasing,” Debney said, during a March 3 earnings conference all.
Debney also noted encouraging signs during the show season.

“The shows have all been well attended by dealers who were clearly there to do serious business. Order strength has been what we would consider typical for a non-surge environment and many dealers have told us they’re pleased with that business,” Debney said. “Our observation is that those dealers who are working hard to promote their businesses are benefiting from the strength we’ve seen in recent mix numbers.”

Not Just Surviving

The key to sales success this year is looking beyond today’s numbers. Yes, there are plenty of challenges ahead, including the summer months. Succeeding — not just surviving — will require focus, “real” new products, over-the-top consumer promotions at all levels and an extra dose of motivation.

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Another Attack On The Second Amendment

The ATF’s effort to ban 5.56 M855 “Green Tip” ammunition shouldn’t have surprised anyone in or out of the industry. Yes, the bureau’s execution of the plan was badly bungled, but its intent was clear: ban firearms the president of the United States doesn’t like.

What the ATF — which imposed a very short period for public response — didn’t expect was the massive “see through” of this blatant scheme by the president to get what he wants through executive action. The ATF received more that 80,000 comments and highly critical letters from both side of Congress.
Remember what the president said, following the failure of the Senate to pass his anti-gun legislation in 2013: “This effort is not over. I see this as just Round One.”

Whether the ATF’s effort to ban Green Tip can be seen as Round Two is debatable, given other anti-gun efforts. What is clear: There will be additional “rounds,” driven by a president who is determined to cripple the Second Amendment.

What we must do is remain vigilant, expecting many “rounds” in this fight and be ready to respond in a way that reflects our determination not to be knocked out, regardless of who’s throwing the punches.

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Winchester Patterns Turkey Loads

Consumers, and many of us in the industry, are hunting turkeys throughout the country. Given the challenges of taking gobblers, hunters spend a lot of time patterning their shotguns to ensure they have the perfect load. Winchester Ammunition has made this task easy with their new Pattern Board app.

Hunters can choose the gauge, pellet size, shell length, choke constriction and Winchester turkey load. The app reveals the perfect load based on more than 2,700 actual trigger pulls. Up to four loads can be compared side-by-side.

In addition to helping consumers select the right Winchester turkey ammo, it’s a great in-store sales tool for dealers. Used on a smartphone, tablet or computer, it turns a salesperson into a turkey load expert. Great customer service.

Visit www.winchesterpatternboard.com

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Remington Defense Available To Consumers

For the first time, Remington is making certain Remington Defense firearms available to the civilian consumer market. The firearms are developed and built by Remington’s Defense Division’s research and development engineers and manufacturing personnel.

Previously, the division’s firearms were sold only to the U.S. military, U.S. law enforcement agencies and allied nations.

The initial offerings available to consumers are the R4GP (Remington Gas Piston) Carbine, R4 Carbine, PSR/MSR (Modular Sniper Rifles) and M2010 (U.S. Army replacement for the M24 Sniper Rifle).

Remington advises consumers to contact their local firearms dealers. Dealers should contact their sales reps.

Visit www.remington.com/remingtondefense

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Aimpoint Offers Deals For New Dealers

In its 40th year, Aimpoint is offering new dealers up to $1,000 off their first order, along with free shipping. To take advantage of this program, dealers should email sales@nullaimpoint.com to receive Aimpoint login credentials.

This will give access to Aimpoint’s dealer eSales portal — www.aimpointdealer.com/newdealer — where dealers can place online orders using offer code 2015SI10.
By Russ Thurman

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