U.S. gun makers aim for record quarter as curbs loom
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U.S. gun makers are aiming for record quarterly sales as first-time buyers, including a growing number of women and pensioners, rush to buy weapons before anticipated gun-control laws come into force.
President Barack Obama's proposals to curb gun violence in the United States, including enhanced background checks and a ban on military-style assault weapons, have increased political and investor scrutiny on gun companies accustomed to growth.
But Smith & Wesson Corp and Sturm Ruger Inc , which will report quarterly results within the next two weeks, brushed off negative sentiment after the Newtown, Connecticut school shootings on Dec. 14. Shares recovered and sales never stopped.
'The firearms industry is certainly seeing explosive sales growth in the last several months,' Wedbush Securities analyst Rommel Dionisio told Reuters.
Background checks for firearm sales, mandatory for all purchases made at U.S. gun stores, rose nearly 50 percent year-on-year in December, data from the FBI's National Instant Criminal Background Check System showed.
This was the highest monthly percentage rise ever reported for a measurement commonly used to gauge the firearm industry's performance. It eclipsed the 30.8 percent rise of November 2012.
Brant Williams, owner of Frontier Firearms LLC, said sales at his gun store in Kingston, Tennessee rose about 25 percent after Obama's re-election. The spike was even greater after the president spoke at a memorial service for the Newtown victims.
'From (the memorial speech) until about the week of Jan. 21, we probably saw a 100 percent increase,' Williams told Reuters.
Several gun store owners said the AR-15 assault rifle - the firearm used in the Newtown shootings - was largely responsible for the initial surge in sales. Customers feared the weapon would be banned, they said.
After the rush, supply soon dwindled. But customers simply switched to other firearms, said Bryce Curry, chief executive of Brownsburg, Indiana-based Premier Arms LLC.