Ruger Wins Award, But Faces Major Challenges
Sturm, Ruger & Company, Inc. (NYSE: RGR) was presented with the “Firearms Manufacturer of the Year” award by the National Association of Sporting Goods Wholesalers. This award, presented at the Association’s Annual Meeting in Reno, Nevada on November 7, recognizes Ruger’s efforts to provide innovative products, quality customer service, and profitability for distributors of Ruger products. In presenting the award, Mike Brown, Chairman of the NASGW Board of Directors, praised Ruger for its business ethics and “promoting an American-made culture in our market.”
Ruger’s Wall Street Woes
This is a welcome achievement for Ruger which otherwise has stumbled recently. In recent weeks, Ruger’s stock price has been soundly hammered, with the company losing over half of its book value. On Wall Street, optimism about Ruger’s future has been replaced by pessimism. We understand why…
In one firearms product area after another, Ruger has “missed the boat” giving up market share to competitors. Unlike Savage Arms, Ruger has done nothing noteworthy to supply the growing market for precision target and varmint rifles. In the thriving cowboy action market, Ruger is still the dominant pistol maker, but it failed to develop lever actions and suitable shotguns, giving up the lever action market to Uberti and Marlin, and the cowboy shotgun market to Stoeger, a Beretta company. Ruger failed to recognize the popularity of AR-platform rifles and has nothing to offer in that segment, despite the fact that ARs and AR accessories are “driving the rifle market” at present. Ruger recently launched a new 9mm pistol, the SR9, but it may be a case of “too little, too late”, in its effort to compete with Glock and Smith & Wesson. S&W’s new M&P pistols have been very successful, winning major law enforcement contracts.
Hopefully, Ruger’s executives have “seen the writing on the wall” and the company will listen to shooters, enhance the quality and durability of its products, and roll out improved rifles and shotguns that better match the current preferences of hunters, target shooters, and shotgunners. Thankfully, at least not ALL Ruger execs have their heads in the sand: Chris Killoy, VP of Sales and Marketing for Ruger, states: “There are many changes taking place at Ruger — changes that will allow us to do business more efficiently and will benefit the many independent distributors that help bring our products to market. These changes reflect the desires and needs of our customers.”
