Coming off a year of record sales, the gun market is cooling off. And overeager gunmakers are still struggling to dial down their expectations.

In the recent quarter, Smith & Wesson (SWHC) sales dropped 23 percent, to $131.9 million, and profit plunged 45 percent, to $14.6 million, according to a report late yesterday. Long guns and �modern sporting rifles,� in particular, lost favor among shooters, but handguns cooled off as well. Smith & Wesson shares slumped almost 15 percent on the news.



Sturm Ruger (RGR), another force in the industry, had similarly weak numbers at the end of July. Sales for Sturm dropped 13.4 percent, to $153 million, in the latest quarter, while profit slid by almost one-third, to $22.3 million.



The problem, according to both companies, is too many guns. Executives are grousing about �high inventory,� stubborn retail partners, and a glut of guns in such stores as Cabela�s. They are less eager to acknowledge that high inventory in any business comes from only two places: low demand and/or too much supply.

This week, Smith & Wesson�s chief executive, James Debney, went so far as to suggest that stores were just clogged up with the wrong guns�an �unfavorable mix� of �lesser brands and hard to sell products.� Sturm Ruger, meanwhile, took a similar tact, blaming itself for not producing enough cool new firearms.

What the industry really needs is a few lawmakers advocating a gun-control bill. That�s what pushed the gun business to record highs last year in the wake of the Sandy Hook school shootings. Those fears, however, have largely abated, and gun sales have gone with them. Even reports of ammunition shortages are dying off.



The National Shooting Sports Foundation argues that the industry is just returning to �a new normal.� The number of background checks processed by the FBI this year, while way off last year�s pace, still reflects a decade-long rise in gun interest. �The sky certainly is not falling,� Steve Sanetti, CEO of the foundation, said in a statement. �Like a rocket ship, we�ve returned to Earth, but we haven�t gone back in time.�



Meanwhile, gun executives are taking aim at hunting season, their best time of year, while trying to hold their fire on production. �We�re hitting the brakes, and we have the most desirable products, and we are coming into the busiest season,� Debney at Smith & Wesson said. �I think we are going to be in a great spot.�

This, IMHO, is nothing for the industry to panic over. They just must strategize on how to dial back and get new products to market quicker. The industry faced a similar situation about a year after the Brady Bill was passed. The white hot market cooled quickly then and left manufacturers looking for answers. That experience is history and you use history to win wars. The firearms industry has enjoyed a long run of good fortune since 2008. I am not sure if that will ever be back short of implementation of a total ban by the next Clinton administration.
BTW, I have spoken to many dealers and industry sales reps lately. It is a situation where they went from strong margins and sales throttled by lack of product to being able to get most anything they need but having to sell it at a lot lower margin.

The first part of the first sentence says it all.." Coming off a year of record sales�"

There was already a long thread here on Ruger's announcement that their sales and profits were down this year--which, of course, some Campfire members attributed to the guns and chamberings THEY want that Ruger wasn't making.

The key here is this part of the announcement:

The National Shooting Sports Foundation argues that the industry is just returning to �a new normal.� The number of background checks processed by the FBI this year, while way off last year�s pace, still reflects a decade-long rise in gun interest. �The sky certainly is not falling,� Steve Sanetti, CEO of the foundation, said in a statement. �Like a rocket ship, we�ve returned to Earth, but we haven�t gone back in time.�

One thing Steve Sanetti didn't mention (or it wasn't mentioned, if he did) is that firearms-sales background checks are still at a higher level than anytime before Obama was elected.

All the long-time gun industry people I know have been expecting this downturn for a while, and have planned for it.

So, when can I get some 22LR?

2015?

BMT

JB;

Quit making sense.

A "new normal" is a good way of looking at it.
BTW, I see and hear of new gun shops and indoor ranges opening almost every day. I think the ranges will be key to the future of sales. They will keep people coming in and all the retail guys need to do is make sure they see the latest and greatest.

Although I have always been a fan of S&W revolvers, I have had a "no lock" J frame sku 103072 odered for over 2 years without it being filled. I have given up hope that it will ever be available, perhaps it is no longer even listed as a current model- I have not checked recently.

Additionally, I had a 617 rebarreled thru the custom shop about a year ago, the level of customer service was far below what I had experienced in the past and when the revolver was finally sent back to me the grooved surface on the top of the barrel had obvious cosmetic flaws that was not representative of the high quality work Smith and Wesson routinely turned out in the past. I resigned myself to living with it rather than trying to get them to fix it as it did not seem worth the aggravation.

It doesn't surprise me Smith and Wesson's profits are falling as it seems they are taking their sales and service for granted rather than earning, or maintaining, their customer's loyalty.