Gun manufacturers financial outlook

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GunnyGene

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Interesting story here. The financial outlook for the majors seems to be pointing towards a buyers market for firearms for the next 12-18 months.

Excerpt:
http://www.guns.com/2017/12/18/market-analysts-back-away-from-gun-makers/

Market analysts backed away from gun makers last week after Smith & Wesson executives slashed the company’s forecasted annual earnings by $100 million.

Maksim Netrebov, founder of New Jersey-based Maks Financial Services and contributor at Seeking Alpha, slammed the gun maker’s holding company, American Outdoor Brands, in a Dec. 11 article for evading questions regarding why the lowered guidance came only now — and not a year ago when President Donald Trump’s electoral victory left the industry flush with inventory and short on demand.

“If we are on the Titanic, the Iceberg is now visible, it is too late to stop the ship and the deck chairs are arranged,” he said. “The industry demand is deteriorating both significantly and quickly, the companies bet wrong and are now sitting on massive inventories, even larger manufacturing capacities which they spent billions on, and are playing ‘chicken’ with each other seeing who will blink first and cut their production.”

Those companies — American Outdoor Brands, Vista Outdoor and Sturm, Ruger and Co. — have all reported diminished earnings over the last year, citing a return to seasonal sales patterns after lingering promotions die down, presumably by the year’s end.

As 2018 fast approaches, however, American Outdoor Brands CEO James Debney told investors the rock-bottom pricing will stick around awhile longer — a sentiment echoed by top executives at Vista and Ruger in November.

“We are not yet seeing the recovery that we expected to see,” said Vista Outdoor Chief Financial Officer Stephen Nolan during a conference call with investors Nov. 9. “Shooting sports has always been a cyclical industry with periodic downturns lasting anywhere from 12 to 24 months. While we may not be at the bottom as of yet, we believe that we are very close and we anticipate that the market will show returns to growth over the next 18 months.”
 

Rei40c

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From a selfish point of view I thought after reading this - Cool cheap guns coming soon. But it's really not a good thing overall for firearms enthusiast. I'm especially worried what the overall downward trend will do to the small gun shops who are already struggling to stay afloat and have been for years.

As far as manufacturers it seems a little like a no win situation. Produce too few and you have unhappy customers that will just get tired of waiting and buy from a competitor, to many and you have to eat millions in unsold inventory and sell them for less than you want most likely.

I don't blame them. Trying to run any business by trying to guess about what the the highly unpredictable political situation will be a year or more out would be an absolute nightmare.
 

GunnyGene

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Monroe County, MS
Rei40c said:
From a selfish point of view I thought after reading this - Cool cheap guns coming soon. But it's really not a good thing overall for firearms enthusiast. I'm especially worried what the overall downward trend will do to the small gun shops who are already struggling to stay afloat and have been for years.

As far as manufacturers it seems a little like a no win situation. Produce too few and you have unhappy customers that will just get tired of waiting and buy from a competitor, to many and you have to eat millions in unsold inventory and sell them for less than you want most likely.

I don't blame them. Trying to run any business by trying to guess about what the the highly unpredictable political situation will be a year or more out would be an absolute nightmare.

One of the things that news like this results in is that those who pay attention are likely to put off purchases hoping to catch the rock bottom price just before the market starts going back up. This can, and often does, create a self reinforcing vicious cycle.
 

Rei40c

Blackhawk
Joined
Feb 16, 2012
Messages
976
GunnyGene said:
Rei40c said:
From a selfish point of view I thought after reading this - Cool cheap guns coming soon. But it's really not a good thing overall for firearms enthusiast. I'm especially worried what the overall downward trend will do to the small gun shops who are already struggling to stay afloat and have been for years.

As far as manufacturers it seems a little like a no win situation. Produce too few and you have unhappy customers that will just get tired of waiting and buy from a competitor, to many and you have to eat millions in unsold inventory and sell them for less than you want most likely.

I don't blame them. Trying to run any business by trying to guess about what the the highly unpredictable political situation will be a year or more out would be an absolute nightmare.

One of the things that news like this results in is that those who pay attention are likely to put off purchases hoping to catch the rock bottom price just before the market starts going back up. This can, and often does, create a self reinforcing vicious cycle.

Maybe there will be a slight uptick after christmas. Many people get cash as gifts, company bonuses, ect. I doubt it will be that big but hopefully a small increase.
 

GunnyGene

Hawkeye
Joined
Nov 23, 2013
Messages
7,318
Location
Monroe County, MS
Rei40c said:
GunnyGene said:
Rei40c said:
From a selfish point of view I thought after reading this - Cool cheap guns coming soon. But it's really not a good thing overall for firearms enthusiast. I'm especially worried what the overall downward trend will do to the small gun shops who are already struggling to stay afloat and have been for years.

As far as manufacturers it seems a little like a no win situation. Produce too few and you have unhappy customers that will just get tired of waiting and buy from a competitor, to many and you have to eat millions in unsold inventory and sell them for less than you want most likely.

I don't blame them. Trying to run any business by trying to guess about what the the highly unpredictable political situation will be a year or more out would be an absolute nightmare.

One of the things that news like this results in is that those who pay attention are likely to put off purchases hoping to catch the rock bottom price just before the market starts going back up. This can, and often does, create a self reinforcing vicious cycle.

Maybe there will be a slight uptick after christmas. Many people get cash as gifts, company bonuses, ect. I doubt it will be that big but hopefully a small increase.

Possibly. Forecasting the business climate, and getting it right, is why CEO's make the big bucks. :lol:
 

Pat-inCO

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In the AZ oven (Phoenix basin)
And just who ARE these so called "market analysts"? . . . . . Liberals.
Need we say more?

It is more than likely subterfuge to make one item look like it is
HUGE
when it is more likely not of much consequence.

Think back to when the real avalanche of sales started. First wave was
when slik willie went for the "assault weapons ban", which fizzled. The
second one was when the Head Narcissist In Charge (HNIC) was
appointed. That one lasted most of eight years.

What we see now is the pendulum effect of HUGE sales for eight years.
Will it be lower sales for a year or two? You betcha Phred. And then it
will go back to the seasonal adjustments it has bee in for many, many
many decades.

The only potential casualties are the few gun manufacturers that over
reacted to the HNIC surge. The others will be just fine.

I still have several that I would love to have, but "decline the opportunity"
to pay current prices (Bearcat is one example. I paid $39.95 for one of
them for my Ex, in 1966 at J.C.Penny; they are over $600 now). I may
be able to afford one soon.
 

Conservative

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Joined
Nov 29, 2017
Messages
508
I paid $320.00 for my Ruger LC9S about a month to a month and a half or so ago.

Did I pay too much, O.K. or a good deal?

Anyone?

PS, at the time I thought it an OK deal, not a bargain, not a screwing, but what do I know...?
 

GunnyGene

Hawkeye
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Messages
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Location
Monroe County, MS
Conservative said:
I paid $320.00 for my Ruger LC9S about a month to a month and a half or so ago.

Did I pay too much, O.K. or a good deal?

Anyone?

PS, at the time I thought it an OK deal, not a bargain, not a screwing, but what do I know...?

Don't know where you bought it, but not a bad price. They go for a couple $$ under $300 NIB around here. See here for performance parts if you want to upgrade it. This model is known to have feeding problems: https://gallowayprecision.com/ruger/lc9s/

I'd recommend their Guide rod/spring assy.
 

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