Sturm, Ruger & Company, Inc. Q1 2025 Earnings Report

Sturm, Ruger & Company, Inc. EPS Results

• Actual EPS: $0.46
• Consensus EPS: $0.65
• Beat/Miss: Missed by -$0.19
• One Year Ago EPS: $0.40

Sturm, Ruger & Company, Inc. Revenue Results

• Actual Revenue: $135.74 million
• Expected Revenue: $148.05 million
• Beat/Miss: Missed by -$12.31 million
• YoY Revenue Growth: -0.80%

Sturm, Ruger & Company, Inc. Announcement Details

• Quarter: Q1 2025
• Date: 4/30/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 1, 2025
• Conference Call Time: 9:00AM ET

Sturm, Ruger & Co., Inc. engages in the business of designing, manufacturing, and selling firearms to domestic customers. It operates through the Firearms and Castings segments. The Firearms segment focuses on manufacturing and selling rifles, pistols, and revolvers principally to a number of federally licensed, independent wholesale distributors. The Castings segment offers steel investment castings and metal injection molding parts. The company was founded by William B. Ruger in 1949 and is headquartered in Southport, CT.

Sturm, Ruger & Company, Inc. Q1 2025 Earnings Call Transcript

Key Takeaways

• Todd Seaford assumed the CEO role 60 days ago, highlighting Ruger’s craftsmanship, integrity and the dedication of its 1,800 employees as key drivers for future growth.
• In Q1 2025, Ruger reported net sales of $135.7 million and diluted EPS of $0.46 (vs. $0.40 a year ago), with gross margin rising to 22% and no debt on the balance sheet.
• The company generated $11.1 million in operating cash, held $108 million in cash and short-term investments, and returned $7 million to shareholders through dividends and share buybacks.
• Ruger plans to increase 2025 capital expenditures to over $30 million—up from ~$20 million—to expand capacity, upgrade manufacturing capabilities and accelerate its new product pipeline.
• Despite a 9.6% industry-wide unit sales decline, Ruger’s sales remained flat, driven by flexible production and strong demand for recent launches like the RXM pistol, Gen 2 American rifles and Marlin lever-action firearms.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Q1 twenty twenty five Sturm Ruger and Company Inc. Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session.

[Operator]

To ask a question during the session, you'll need to press 11 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to turn it over to Todd Seaford, President and CEO, for opening comments.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Good morning, everyone, and thank you for joining us today for Sturm, Ruger and Company's first quarter twenty twenty five earnings call. This is my first call as president and CEO, and I want to begin by expressing my sincere appreciation to all of you, our shareholders, our customers, our employees, and our partners, for your continued support and engagement. Before we get started, I would like to turn it over to Sarah Colbert, our vice president of administration and incoming general counsel, for the caution on forward looking statements.

[Sarah F. Colbert, VP - Administration at Sturm, Ruger & Company]

I would like to remind everyone that some of the statements we make today will be forward looking in nature. These statements reflect our current expectations, but actual results could differ materially due to a number of uncertainties and risks. You can find more information about these factors in our most recent Form 10 ks and other filings with the SEC. We do not undertake any obligation to update these forward looking statements.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Thank you, Sarah. I'm honored to lead Ruger at this exciting moment in our history. It's been just over sixty days since I stepped into the CEO role, and I visited our facilities, spent time with teams across the organization, met with our distributors, retailers, and consumers, and heard firsthand from the people who power this company. Those interactions have only reinforced what I already knew. Ruger is a company grounded in craftsmanship, integrity, and relentless commitment to quality.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

From the production lines in Arizona, North Carolina, New Hampshire, and Missouri to the engineers behind our latest product innovations, I've been inspired by the pride, the passion, and the deep rooted expertise of our employees. Before we dive into the numbers, I'd like to take a moment to recognize someone who has been a central figure in Ruger's story over the last several decades, my predecessor, Chris Kalloy. Chris spent more than twenty years at Ruger. His leadership has had a profound impact on our company and our culture. Chris helped shape Ruger's modern era, guiding us through periods of record growth, major product innovations, and operational improvements that have elevated our reputation across the industry.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

His contributions extend beyond Ruger. Chris has dedicated over thirty years to the firearms industry, and his legacy reflects a deep commitment to responsibility, safety, and advancing the industry in meaningful ways. He's been a respected voice, a steady hand, and a true ambassador for our company and the industry in general. I want to personally thank Chris for his service, for the values he upheld, and for the strong team he helped build here at Ruger. His impact will be felt for many years to come.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Tom Deneen will now provide the financial results for the first quarter of twenty twenty five.

[Thomas Dineen, SVP, Treasurer & CFO at Sturm, Ruger & Company]

Thanks, Todd. In the first quarter of twenty twenty five, we delivered solid performance with strong demand across several key product categories and a focus on operational improvements. Net sales were $135,700,000 and diluted earnings were $0.46 per share. For the corresponding period in 2024, net sales were $136,800,000 and diluted earnings were $0.40 per share. Our profitability improved in the first quarter of twenty twenty five from the prior year, as our gross margin increased from 21.5% to 22%.

[Thomas Dineen, SVP, Treasurer & CFO at Sturm, Ruger & Company]

The higher margin was driven by favorable leveraging of fixed costs resulting from increased production, despite $800,000 of deferred revenue related to sales promotions. At 03/29/2025, our cash and short term investments totaled $108,000,000 Our short term investments are invested in United States Treasury bills and in a money market fund that invests exclusively in United States Treasury instruments, which mature within one year. At 03/29/2025, our current ratio was 4.6:one, and we had no debt. Stockholders' equity was $321,000,000 which equates to a book value of $19.39 per share, of which $6.53 was cash and short term investments. In the first quarter of twenty twenty five, we generated $11,100,000 of cash from operations, and capital expenditures totaled $1,100,000 We expect our 2025 capital expenditures will increase from recent years and may exceed $30,000,000 as we invest in new product introductions, expand capacity, upgrade our manufacturing capabilities and strengthen our facility infrastructure.

[Thomas Dineen, SVP, Treasurer & CFO at Sturm, Ruger & Company]

In the first quarter of twenty twenty five, the company returned $7,000,000 to its shareholders through the payment of $4,000,000 of quarterly dividends and the repurchase of 79,000 shares of our common stock in the open market at an average price of $37.74 per share for a total of $3,000,000 Our Board of Directors declared an $0.18 per share quarterly dividend for shareholders of record as of 05/16/2025, payable on 05/30/2025. As a reminder, our quarterly dividend is approximately 40% of net income and therefore varies quarter to quarter. Our variable dividend strategy, coupled with our strong debt free balance sheet, allows us to continually and consistently provide returns to our shareholders without sacrificing our ability to capitalize on opportunities that emerge. As you can see, our strong financial foundation continues to be a key strength and a competitive advantage for us as we continue to push for consistent growth and shareholder returns. Now back to you, Todd.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Thanks, Tom. Throughout the quarter, we continue to operate with discipline and focus as we transition to our new leadership team. The challenges in the firearms market are clear and well documented across the industry. For example, one data source we look at is Retail BI, which aggregates data from over 2,000 retailers across The US. This data provides statistically significant insights into market trends, sales performance, and inventory dynamics.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

In their q one twenty twenty five report, retail firearm unit sales declined 9.6% year over year with revenue down 11.5%. Handguns, rifles, and shotguns were all under pressure, and adjusted NICS checks declined by 4.2%. Despite these headwinds, I'm proud to report that Ruger remained flat in sales while staying profitable. My mindset as CEO is that although the firearms industry may be cyclical, Ruger does not have to be, and our performance this quarter supports that. With continued demand for many of our products, including the RXM pistol, the Ruger American Generation two rifles, our ten twenty two rifles, the LCP Max pistol, and the Marlin family of lever action rifles, we are actively working to identify areas where we can increase output while seeking out opportunities in production and driving efficiencies across the company.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Our flexible manufacturing model allowed us to adjust production based on demand while maintaining our focus on safety, quality, delivery and cost. Our biggest opportunities remain new product innovation, where our new product sales accounted for $40,700,000 or 31.6% of net firearm sales for the quarter. As always, new product sales include only major new products that were introduced in the past two years. These are high demand platforms that continue to resonate with customers across a variety of segments, including the RXM pistol, the second generation Ruger American rifle, Marlin lever action rifles, the Ruger ten twenty two with carbon fiber barrel, and the fourth generation Ruger precision rifle. We are now looking strategically at areas where we can maximize production to better meet consumer demand while positioning ourselves for long term growth with innovative new products.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Additionally, we continue to leverage our brand through collaborations with other great companies in the industry, such as the RX M Pistol with Magpul Industries and the recent Q2 launch of RXD suppressors with dead air silencers. In the coming years, we have plans for expanding availability of existing models while also increasing our speed to market on our product road maps to offer greater configurations of recently launched models. The execution of this plan will require a capital investment to exceed our historical $20,000,000 per year. We're focused on creating platforms that are not only reliable, but versatile and customizable to meet a wide range of consumer needs. We are excited about the pipeline of new releases on the horizon.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

None of this would be possible without the dedication and expertise of our more than 1,800 employees across the country. I am grateful for their support and openness during this leadership transition and their willingness to embrace my vision for Ruger moving forward. Their craftsmanship, pride in our brand, and commitment to excellence set Ruger apart in this industry. As CEO, one of my top priorities is continuing to invest in our people through training, development, and tools that help them thrive. As we look to the remainder of 2025, we are planning to be in growth mode.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Although we, like the rest of the industry, see weakening consumer demand, tough financial markets, and uncertainty in supply chain availability and costs, we have a solid pipeline of new products, strong demand for recently launched new models, and ample opportunity to scale our operations in alignment with market needs. Our focus is clear: invest in our culture, people and organizational efficiency expand our production capabilities to meet product specific demand deliver safe, reliable and innovative products for our consumers operate with financial discipline and transparency and maximize shareholder value, continuing to prove that Ruger is a solid investment for the future. We recognize that the broader environment remains dynamic. With our experienced leadership team, strong debt free balance sheet, reduced inventories at distribution, and a full pipeline of recently launched and soon to be announced new products, Ruger is positioned for success. As we continue into 2025 and beyond, we will build a culture of accountability and innovation that will ensure Ruger remains the largest and best commercial firearms manufacturer.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Needless to say, we are confident in our ability to meet the moment and shape the future. Operator, can we please have the first question?

[Operator]

Yes. Thank you. Your first question comes from the line of Ramil Di with Aegis Capital. Your line is now open.

[Rommel Dionisio, Head of Research at Aegis Capital]

Hi, good morning and thanks for taking my question. Made comments about from a higher than normal investment in capital expenditure. I just want to think about that philosophically. It sounds like you're prepping for I don't want to put words in your mouth, but are you prepping for sort of a more aggressive kind of pace of new product launches? I mean, obviously, when you put CapEx to do it, that's not just a variable expense.

[Rommel Dionisio, Head of Research at Aegis Capital]

It's yeah. That's that's that's in the future for a longer term, you know, focus. Can I wonder if you could just talk about that, you you know, just philosophically? Are you you expect the pace of new product launches to accelerate as time goes on? How should we think about that?

[Rommel Dionisio, Head of Research at Aegis Capital]

Thanks.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Yes. We do. So, Ronald, I think the the the biggest opportunity for us is is really the pace of new product introductions. And with some of the backlog that we have, making sure that from a from an investment in machines and capacity expansion, we we align those two efforts. So we will be more aggressive in terms of the pace of the launches.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

We have a full pipeline of of road maps for our product categories. And so we're gonna pace those launches with the appropriate capital to get them to the market faster.

[Rommel Dionisio, Head of Research at Aegis Capital]

Okay. Great. And and, you know, obviously, new products isn't just production. There's there's marketing and product development that goes along with that. How should we kinda think about that in terms of, you know, the impacts to to to the the bottom line over the next several quarters?

[Rommel Dionisio, Head of Research at Aegis Capital]

How should we kinda think about the pace of of investments in, you know, sales and marketing dollars? Thanks.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

So I think the other opportunity for us is from a sales and marketing perspective, you're seeing some of the the relationships in terms of the product launches. I would tell you that as as we do more, obviously, we'll need to support that a little bit better, as well as the sales team. And so, you know, we will continue to monitor current environment and and pace our investments appropriately with the current environment. I really think in the short term, it's gonna be more capital related than it is gonna be expense related in the short term. And as we grow those introductions, I think you'll see those be parallel in the out months and in out years.

[Rommel Dionisio, Head of Research at Aegis Capital]

Okay. Maybe just one final one on new products. Is there a particular category that you've, you know, kind of foresee a kind of a really significant opportunity? Obviously, not to ask you what you're about to launch here, but just philosophically, you know, is is there a particular category of firearms that you you really see as a big opportunity for product launches?

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

So, you know, as you know, we don't talk about kind of future product introductions. I would tell you that we have a robust pipeline across all of our product platforms, and we're we're prioritizing those based on feedback and market opportunities that we see. And so we're gonna think about it really in terms of the platforms that we have and expanding platforms in the short term.

[Rommel Dionisio, Head of Research at Aegis Capital]

Great. Well, thanks very much.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Thank you.

[Operator]

Okay. Thank you. Your next question comes from the line of Mark Smith with Lake Street. Your line is now open.

[Mark Smith, Senior Research Analyst at Lake Street Capital Markets, LLC]

Hi, guys. I wanted to just drill down at first maybe on RXM. As we look at the success of that product launch, can you just talk about maybe the impact that it had on ASP during the quarter?

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Good morning, Mark. Yes. Absolutely. So as you know, that product was launched late last year in December, and it's been, it's been an excellent launch for us. I think what you're seeing is we as we've ramped up and studied that line, the ASP is has it has had an effect on our ASP in the short term.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

We find that as we get lines built up and get up to a steady state, we'll start to see that from our you know, from an overall perspective, we're getting more firearms out the door than we were, December. So there's a little bit of effect on ASP based on that ramp up. So that that would kinda help you understand the first quarter ASP relative to maybe what it was in in q four.

[Mark Smith, Senior Research Analyst at Lake Street Capital Markets, LLC]

Okay. And just kind of staying on RxM, Todd, you you talked about kinda platforms a little bit more. You know, is is that one maybe a a good product, for us to watch kinda how you expect to build out a platform, for firearms going forward?

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Absolutely, Mark. I think it's one of the the better opportunities for us in terms of of that style of handgun. As we know, people are very passionate about that. Maple is a great partner, and we have, there's a lot to come in terms of building out around the the the RXM. And so that's very important to the future, not just in specific to specific models, but the environment around the model through accessories.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

So

[Mark Smith, Senior Research Analyst at Lake Street Capital Markets, LLC]

Okay. And then I I did just wanna ask about kind of if there's any margin pressure as we think about, you know, tariffs, other inflationary pressure, maybe anywhere with that is anything that that is currently maybe hurting you guys or that you're watching, on on pricing that that could impact, results here moving forward?

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Yeah. So I think what right now, the the increase in relative tariffs, I would tell you that, obviously, it's a it's it's a different difficult environment, for leadership teams to kinda navigate, through tariffs. Generally speaking, because we're made in USA and majority of our components are sourced in The US, in the short term, Mark, I would say, we're not seeing a lot of immediate impacts. And that's really because we we were thoughtful in terms of the raw materials needed to build out. And so, because of our balance sheet, we've gone a little bit higher with raw materials to make sure that we're we're covered in the short term.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

So we're we are watching it and we are working with our our vendor partners to understand, any ancillary supply chain tail that may be, caught up in in some of the tariffs. But right now, in the short term, I would tell you we're not seeing much in the immediate future, but we're paying very, very close attention to it.

[Mark Smith, Senior Research Analyst at Lake Street Capital Markets, LLC]

Okay. And I think the last one for me. Just as we think bigger picture here about increased capital expenditures this year, Given the kind of the environment that we're at, mix being down, maybe no real catalyst for consumers to expand firearm purchases here in the near term, You know, what what gives you the the confidence to expand the capacity? Is it really more so being efficient and an opportunity to to dig in more to this backlog, or do you see something out there on the consumer front and maybe your new product launch that that gives you the confidence to to spend this money on these capital expenditures?

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Yeah, Mark. I think it's a really combination of both. I think, you know, with with the road maps that we have, we feel very, very good about our our launches coming up in the future. And so getting them to market faster, I think, also in a market that can be a little bit uneasy, because of our balance sheet, it gives us the ability to go out, where others might not be able to invest. And so being aggressive and and taking share is something that we're we're very focused on in in what could be a, an overall down market.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

We actually feel that we have opportunity to go out in certain categories, be more aggressive, take share, and we have the balance sheet to do that. So I would tell you that's that's how we're thinking about the market today.

[Mark Smith, Senior Research Analyst at Lake Street Capital Markets, LLC]

Perfect. Thank you, guys.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Thank you.

[Operator]

Thank you. As a reminder, to ask a question, you'll need to press 11 on your telephone. I'm showing no further questions at this time and would now like to turn it back to Todd Seifert for closing remarks.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Thank you all again for joining. Looking ahead, innovation remains our core focus. As I stated earlier, our robust pipeline of upcoming products is designed to energize the market and extend our brand reach, providing our consumers with products they desire. We have plans in the works for expanding the availability of key models, increasing the speed to market on our new product road maps, and offering more configurations of recently launched new models. In addition, as a US based manufacturer, we are uniquely positioned to navigate global trade disruptions.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

Our American made products insulate us to a degree from current tariff and supply chain uncertainties, but we are monitoring areas where these costs may still have an effect. With that said, we will continue to plan for growth, position ourselves for long term market leadership, and aggressively manage costs across the business. We look forward to sharing more details on these initiatives and our road map for long term growth at the upcoming annual meeting on Thursday, May 29 at 9AM. Thank you again for joining us today and for your continued confidence in Sturm, Ruger and Company. We are in a position of strength, and we're leaning into it.

[Todd Seyfert, President & CEO at Sturm, Ruger & Company]

My priority is to keep us focused on innovation, operational excellence, and investing in the people and systems that will drive Ruger's next phase of growth. I look forward to building that strong future together. Thank you, everyone.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Sarah F. Colbert, VP - Administration
• Thomas Dineen, SVP, Treasurer & CFO

Analysts

• Todd Seyfert, President & CEO at Sturm, Ruger & Company
• Rommel Dionisio, Head of Research at Aegis Capital
• Mark Smith, Senior Research Analyst at Lake Street Capital Markets, LLC