The top executive of one of the nation’s largest gun manufacturers on Thursday said an expected sales bump from the 2018 elections did not happen, but predicted that interest could rise amid an expected new push in Congress for tighter regulations on the firearm industry.
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“We thought there might be an uptick in demand following the midterm elections. That largely did not occur,” Sturm, Ruger & Co. CEO Christopher Killoy told investors. “We see a lot of things on the political front that may drive demand in the near future.”
With Democrats now in control of the U.S. House of Representatives, the party is expected to try to advance long-sought gun control measures that Republicans previously blocked.
In the past, firearm sales have increased in tandem with a political environment that favors gun control. Background checks, for example, fell after President Trump’s victory in 2016 – given his strong support for Second Amendment rights and the likelihood that he would be able to appoint Supreme Court justices who would defend the industry. It was also a reflection of the significant increase in background checks in 2015 ahead of the presidential election.
At Ruger, fourth-quarter sales grew to $121 million, while profits rose to 69 cents per share – both below Wall Street estimates. Overall for 2018, sales at the Southport, Connecticut-based firm fell 5 percent to $496 million and profits dropped to $51 million, or $2.88 per share.
Killoy attributed the decline to a reduction in industry demand, given that adjusted background checks fell 6 percent last year. The Federal Bureau of Investigation processed over 26 million background checks in 2018, according to the agency's database.
Trump's double-digit tariffs on steel imports is also driving up demand for U.S. production of the metal, increasing costs for Ruger, which has typically sourced its materials domestically, Killoy said.