Earnings call transcript: Sturm Ruger & Co. Q2 2025 misses EPS, stock dips

Sturm Ruger & Company Inc. (RGR) reported its Q2 2025 earnings, revealing adjusted diluted earnings per share (EPS) of $0.41, falling short of the $0.51 forecast by analysts, marking a 19.61% negative surprise. Despite the earnings miss, the company exceeded revenue expectations, posting $132.5 million against a forecast of $121.99 million, an 8.62% surprise. Following the release, RGR’s stock declined 1.91% in regular trading but saw a slight recovery of 1.82% in pre-market trading, indicating mixed investor sentiment.

Key Takeaways

• Q2 2025 EPS of $0.41 missed forecasts by 19.61%.
• Revenue of $132.5 million surpassed expectations by 8.62%.
• Stock fell 1.91% post-earnings but recovered 1.82% in pre-market.
• New products contributed significantly to sales.
• Company maintains strong balance sheet with no debt.

Company Performance

Sturm Ruger demonstrated resilience with a strong revenue performance in Q2 2025, despite challenges in the firearms industry. The company’s focus on innovation and market share gains helped counteract the broader market’s softening demand. Compared to previous quarters, the company’s strategic initiatives, including new product launches and inventory rationalization, have positioned it as a leader in the firearms sector.

Financial Highlights

• Revenue: $132.5 million, an 8.62% surprise over forecasts
• Adjusted EPS: $0.41, a 19.61% miss compared to forecasts
• Cash and short-term investments: $101 million
• Stockholders’ equity: $289.3 million, or $17.82 per share
• Cash generated from operations: $25.9 million

Earnings vs. Forecast

Sturm Ruger’s Q2 2025 earnings per share of $0.41 fell short of the $0.51 forecast, marking a 19.61% negative surprise. However, revenue beat expectations, coming in at $132.5 million compared to the $121.99 million forecast, an 8.62% positive surprise. This mixed result highlights the company’s ability to drive sales growth despite profitability challenges.

Market Reaction

Sturm Ruger’s stock experienced a 1.91% decline in regular trading following the earnings announcement, closing at $34.62. However, in pre-market trading, the stock rose by 1.82% to $35.25, indicating a cautious optimism among investors. The stock’s movement reflects the mixed earnings results, with strong revenue performance offset by the EPS miss.

Outlook & Guidance

Looking ahead, Sturm Ruger expects increased capital expenditures and continued focus on product innovation. The company anticipates potential industry consolidation and remains committed to financial discipline and shareholder value. Despite ongoing market challenges, Sturm Ruger is optimistic about maintaining its competitive position through strategic initiatives and a robust product roadmap. The company’s commitment to shareholder value is demonstrated by its 17-year track record of consecutive dividend payments, as highlighted by InvestingPro. For detailed analysis of RGR’s future prospects and comprehensive valuation metrics, investors can access the full Pro Research Report, available exclusively to InvestingPro subscribers.

Executive Commentary

CEO Todd Seifert emphasized the company’s focus on innovation and market share, stating, "In a down market, innovation and share gain is what we’re focused on." He also highlighted the company’s strong balance sheet, noting, "Our strong balance sheet and disciplined financial approach allows us to continue to be proactive."

Risks and Challenges

• Softening demand in the firearms industry could impact future sales.
• Macroeconomic pressures may affect consumer discretionary spending.
• Industry-wide manufacturing and distribution challenges persist.
• Inventory rationalization and asset write-offs could affect short-term profitability.
• Potential regulatory changes could pose risks to the firearms sector.

Q&A

During the earnings call, analysts inquired about the company’s strategy for the Marlin brand, with executives expressing strong enthusiasm for its future potential. Questions also focused on the organizational realignment, which was clarified as a talent reallocation effort, and market share gains in a challenging environment were highlighted as a key area of focus.

Full transcript - Sturm Ruger & Comp Inc (RGR) Q2 2025:

Conference Operator: Welcome to Sturm, Ruger and Company’s Second Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. To remove yourself from the queue, you may press 11 again.

I would now like to turn the call over to Todd Seaford, President and CEO, for opening comments.

Todd Seifert, President and Chief Executive Officer, Sturm, Ruger and Company: Good morning, and welcome to Sturm, Ruger and Company’s Second Quarter twenty twenty five Earnings Conference Call. I’m Todd Seifert, President and Chief Executive Officer. Before we get started, I would like to turn it over to Sarah Colbert, our Senior Vice President and General Counsel, for the caution on forward looking statements.

Sarah Colbert, Senior Vice President and General Counsel, Sturm, Ruger and 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 Seifert, President and Chief Executive Officer, Sturm, Ruger and Company: Thank you, Sarah. This call marks my first full quarter as President and CEO, and we’ve moved quickly to position Ruger for long term success. As part of this leadership transition, we evolved our structure and reorganized our operations to give our business units greater flexibility, clear accountability, and the resources to deliver results more effectively. We also unified all elements of our product strategy under one comprehensive team to sharpen our focus and execution. In connection with these moves, we conducted a thorough inventory rationalization, reassessing our raw materials, work in process, and finished goods, to identify and address excess, obsolete, or discontinued inventory.

This included legacy models that have run their lifecycle, products no longer aligned with our strategy, and Marlin related items not part of our roadmap for that brand. In addition, we repositioned key elements of our product portfolio to ensure that our most desirable products reach consumers at the right price point. These steps resulted in non recurring charges this quarter. Specifically, we incurred an inventory and asset write off of $17,000,000 our product rationalization and SKU reduction totaled 5,700,000 and our organizational realignment expense was $3,700,000 These moves clear the way for us to deliver sustainable growth and show resilience through a cyclical market. Tom Danin will now take you through the financial results for the quarter.

Tom Danin, Chief Financial Officer, Sturm, Ruger and Company: Thanks, Todd. Net sales for the quarter were $132,500,000 and we incurred a diluted loss of $1.05 per share. On an adjusted basis, excluding the impact of the strategic initiatives, diluted earnings per share were $0.41 For the corresponding period in 2024, net sales were $130,800,000 and diluted earnings were $0.47 per share. For the six months ended 06/28/2025, net sales were $268,200,000 and the company lost $0.57 per share. On an adjusted basis, excluding the items above, diluted earnings for the 2025 were $0.87 per share.

For the corresponding period in 2024, net sales were $267,600,000 and diluted earnings were $0.87 per share. On an adjusted basis, excluding the reduction in force expense of $1,500,000 incurred in the 2024, diluted earnings per share for the 2024 were $0.94 On 06/28/2025, our cash and short term investments totaled $101,000,000 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. On 06/28/2025, our current ratio was 4.0:one, and we had no debt. Stockholders’ equity was $289,300,000 which equates to a book value of $17.82 per share, of which 6.24 was cash and short term investments. In the 2025, we generated $25,900,000 of cash from operations, and capital expenditures totaled $6,700,000 We expect capital expenditures in the 2025 to increase from the first half of the year, as we invest in new product introductions, expand capacity, upgrade our manufacturing capabilities, and strengthen our facility infrastructure.

This increase is exclusive of the Anderson purchase earlier this month that Todd will discuss shortly. In the 2025, we returned $23,000,000 to our shareholders through the payment of $6,900,000 of quarterly dividends, and the repurchase of 443,000 shares of our common stock at an average price of $36.42 per share, for a total of $16,100,000 Our Board of Directors declared a $0.16 per share quarterly dividend for shareholders of record as of 08/15/2025, payable on 08/29/2025. Our long standing practice has been to pay a dividend of approximately 40% of our net income. Given the significant impact of the non cash charges, this quarter’s dividend is approximately 40% of the adjusted diluted earnings of $0.41 per share for the 2025. Our dividend strategy, coupled with our strong debt free balance sheet, allows us to capitalize on opportunities that emerge, like the Anderson acquisition that we completed earlier this month.

Now back to you, Todd.

Todd Seifert, President and Chief Executive Officer, Sturm, Ruger and Company: Thanks, Tom. As you can see, we’ve been very busy. In addition to the inventory reduction, product rationalization and reorganization, we also had an exciting opportunity to acquire the assets of another historic, well respected firearms manufacturer in Anderson Manufacturing. As I stated on July 1, the day we closed on the purchase, this acquisition is an incredible opportunity to advance our long term strategy and expand Ruger’s capacity. It reinforces Ruger’s position as the nation’s leading firearms manufacturer for the consumer market and reiterates my focus on continued growth, even as others scale back.

The $16,000,000 investment, which was paid for from cash on hand, will increase our capacity, strengthen our manufacturing capabilities, and broaden our product offerings. As I have stated before, we do not plan for this to be our last acquisition. Our strong balance sheet and disciplined financial approach allows us to continue to be proactive in looking for strategic opportunities to grow our portfolio, leverage our infrastructure, and deliver consistent performance over time. Nevertheless, we will continue to be deliberate in our evaluation of opportunities that arise. Beyond the gains we will realize from expanded capabilities in Hebron, Kentucky, our greatest opportunity is new product innovation.

As I mentioned earlier, we recently reorganized our product strategy into a singular organization. In doing so, we better aligned new product ideation, voice of the customer insights, and product lifecycle management, enabling us to deliver new relevant products to the market more efficiently and effectively. With that said, our pipeline is strong and our new product offerings are still in demand throughout the channel. For the quarter, new product sales accounted for $42,000,000 or 34% of net firearm sales, which was an increase over Q1 of this year and reinforces the popularity of our innovative products. 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 RX M Pistol, the second generation Ruger American Rifle, Marlin Lever Action Rifles, the Ruger tentwenty two with carbon fiber barrel, and the fourth generation Ruger Precision Rifle. With our reorganization, renewed focus on product strategy, and our expanded capabilities with the Andersen manufacturing purchase, we are positioned to continue our new product success well into the future. With that said, we understand that macroeconomic pressures such as continued tariff and interest rate uncertainty, a weakening job market, and inflationary pressures are impacting discretionary consumer spending. Specific to the firearms industry, we see softening demand, with NICS checks falling below pre-twenty nineteen levels and broad impacts being felt across manufacturing, distribution and retail channels. Yet our focus remains 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, transparency and thoughtful capital deployment and maximize shareholder value, continuing to prove that Ruger is a solid investment for the future.

We know the market remains dynamic, and we expect to see continued challenges and potential consolidation across the industry. Our realignment and recent acquisition strengthened Ruger’s ability to respond, adapt and grow for the long term. We remain committed to our guiding principles: delivering rugged, reliable and innovative products operating with financial discipline and creating long term value for our shareholders. Thank you for your time, continued support and confidence in Ruger. Operator, can we please have the first question?

Conference Operator: Our first question comes from the line of Mark Smith of Lake Street. Please go ahead, Mark.

Company Representative, Sturm, Ruger and Company: Hi, guys. I I wanted to

Mark Smith, Analyst, Lake Street: ask first about the adjustment to to sales just from product rationalization and and SKU reduction. If you can just give us more insight into maybe the the number of products, lines, kind of all the the impact, from this on the top line?

Company Representative, Sturm, Ruger and Company: Good morning, Mark. Yeah. Absolutely. I I think if you look at from a rationalization standpoint, the biggest impact was the American Gen one in terms of number of SKUs. We’ve got the AR consolidation or the MSR consolidation as we look at Anderson and moving that production into the Hebron facility.

We did some product rationalization on the pistols, the EC9 for example. Those would be a majority of the individual SKUs that were addressed in the rationalization.

Mark Smith, Analyst, Lake Street: Okay. And as we think about this, I think you called it out as a $5,700,000 reduction to sales. Did you move more volume, though, maybe as we think about, you know, units shipped or, you know, maybe the increase in distributor inventory? You know, how much how much product did you move out that maybe fits in this category?

Company Representative, Sturm, Ruger and Company: From a unit standpoint, you know, it was it was relatively in in terms of total scope market. It wasn’t a huge percentage. Really, what it allowed us to do was to look at our raw material inventory, build out specific SKUs to utilize an inventory versus writing it off. And that’s what we did. And so, I believe it was I’m just looking here 20.

So if you if you go between the three, about 20,000 each, it’s gonna be close to 70,000 units that would fall into that specific category of rationalization.

Mark Smith, Analyst, Lake Street: Okay. And then the impact on ASP as we look at maybe the the average sales price of of the unit shipped, the $3.49, You know, would would that have been higher with without some of this? Was it that much of a discount to make an impact on on that ASP?

Company Representative, Sturm, Ruger and Company: It would have it would have it brought it down about 16. Okay. Across that total 70,000 unit rationalization.

Mark Smith, Analyst, Lake Street: Perfect.

Ramo DiNiccio, Analyst, Aegis Capital: And then

Mark Smith, Analyst, Lake Street: just look looking at the organizational realignment, you know, where are you at in that? Do you feel like you’ve got the majority of that done? And then maybe if you could talk about the long term savings coming out of this organizational realignment.

Company Representative, Sturm, Ruger and Company: Yeah. In terms of the realignment, yes, it is. It is. I would tell you we that happened about forty five days ago through that process. So, no other major plans in terms of changes.

But this really wasn’t a cost savings initiative, Mark. So, really what it is is evaluating the organization that we need to carry the business forward, realigning the needs of the organization in terms of expertise. And so we moved out some people and we plan to refill with people that are more focused on the strategy going forward. So I would tell you, in terms of netting out, hey, is this going to be an ongoing savings over time? Really, the way I look at this is, it’s a reallocation of of talent within the organization over time.

And so I don’t I don’t think you’ll see a large ongoing savings in this specific example, because it wasn’t a cost savings initiative. It was a it was a realignment of the organization.

Mark Smith, Analyst, Lake Street: Perfect. That’s helpful. And last one for me. I know you guys you know, don’t give guidance, but just and and you talked about in in your commentary, you know, some of the macro headwinds that are out there. You know?

But I’m I’m just curious kind of what you’re seeing, from consumers as far as demand today, if there’s been any shifts, if it’s just still kinda quiet as we look at kind of the the next data. You know, any insights that you can can give us into the consumer in in demand for firearms would be great.

Company Representative, Sturm, Ruger and Company: Sure. So I would tell you, having been up and traveling pretty extensively, visiting dealers, visiting our distributors. I think what you see, Mark, is Ruger’s outpacing the market right now in terms of of demand. And so, you know, if you if you anecdotally, we look at the information that we have, we look at some of the earnings, you know, off anywhere from 15 to 20%, I would say is is what we’re hearing, through our partners and our channels. We’re not seeing that obviously in our results.

So I think our focus right now is being aggressive and from a share perspective, making sure that we’re we’re producing the SKUs that our customers want on a timely basis. And I think as we do that, we continue because of the depth and the breadth of our product lines. We’re slightly more insulated than maybe some others. And it’s all about market share right now. In a down market, innovation and share gain is what we’re focused on.

And I think we’ll continue to see that.

Mark Smith, Analyst, Lake Street: Great. Thank you, guys.

Company Representative, Sturm, Ruger and Company: Thanks, Mark. Thanks, Mark.

Conference Operator: Thank you. Our next question comes from the line of Ramo DiNiccio of Aegis Capital. Please go ahead, Ramo.

Ramo DiNiccio, Analyst, Aegis Capital: Good morning. Thank you. Guys, in your comments, you talked about inventory rationalization. And then in in your prepared or rather, your press release, you talked about Marlin related items not included in that brand’s future roadmap. Could you just maybe give us a little more granularity on that on kind of what your thoughts are with regards to that brand?

I’ve always gotten a sense that the Lever Action Rifles has been a home run for you. Yes, I wonder if you could just talk about your thoughts about that brand going forward and maybe give some insight as to what perhaps that brand’s future roadmap might be. Thank you.

Company Representative, Sturm, Ruger and Company: Absolutely, Ramel. Yeah. Thanks. Thanks. Really, as we look through Marlin, really coming in and evaluating where we are in the roadmaps, the Model 60 is a product that was purchased, the assets and the machinery and a lot of raw material.

And so that is not, we don’t have a solution and plan for that model 16 in the near term. And so that is a majority of that Marlin write off, Really focused there. The rest of the Marlin line has been very, very popular, as you know, by our backlog. And so we continue to increase production rates. We continue to increase the product mix.

And so we have a very robust pipeline of Marlin rifles for a number of years to come. But really, it’s if think about Marlin, it has been a home run and it’s focused on centerfire rifle right now. And it’s the 60 is not currently part of the product strategy roadmaps. And that’s why we made that distinction and the decision to write off that inventory.

Ramo DiNiccio, Analyst, Aegis Capital: Okay, but just to think about that then. Your level of support enthusiasm for the brand in general and long term plans, my reading is correctly that you’re still enthusiastic about the prospects of that brand going forward

Company Representative, Sturm, Ruger and Company: as you always

Ramo DiNiccio, Analyst, Aegis Capital: have been or any any change there?

Company Representative, Sturm, Ruger and Company: It’s it’s listen, the feedback from the consumer and our customers has been phenomenal. Ruger did a great job of of guiding that product in that brand to to new levels in terms of quality and accuracy. And so we’ve we absolutely are excited about where Marlin continue to go. Keep in mind that the stuff that we’re talking about writing off came with the purchase back in 2020. And so it’s it’s raw materials and things that have been sitting there.

It’s some machines focused on some of those products, Ramel that really, you know, had been in the in the warehouse for for over five years and are really not part of the the current product roadmap. But we have a incredibly robust roadmap for Marlin that we’re very excited about. And we’ll continue to grow that line and the SKUs associated with that into the future.

Ramo DiNiccio, Analyst, Aegis Capital: Great. That’s very helpful. Thank you. Yep.

Conference Operator: Thank you. I would now like to turn the conference back to Todd Seifert for closing remarks. Sir?

Company Representative, Sturm, Ruger and Company: Thank you again for joining us today and for your continued confidence in Ruger. We look forward to talking again next quarter.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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