Sturm Ruger Swings to Profit as Sales Jump 19%
Sturm Ruger & Company (RGR) reported second-quarter net sales of $158.1 million, up 19% from a year earlier, as diluted earnings per share of $0.43 reversed a $1.05 per-share loss in the prior-year quarter.
Sturm Ruger & Company (RGR), the Newport, New Hampshire-based firearms maker, reported second-quarter net sales of $158.1 million, up 19% from $132.5 million a year earlier and up 12% sequentially from $141.4 million in the first quarter. Diluted earnings per share came to $0.43, compared with a diluted loss of $1.05 a share in the second quarter of 2024 and up sharply from $0.01 in the first quarter.
The rebound followed a first quarter marked by production constraints, and the acceleration was due to "improved manufacturing execution" once those constraints eased. Sequential sales growth jumped from 4.1% year-over-year in the first quarter to 19% in the second, a shift management tied directly to the manufacturing recovery rather than to demand. Distributor sell-through data pointed to the same trend: first-quarter sell-through rose 3.2% against 1.6% adjusted NICS growth, while second-quarter sell-through rose 19% against 5% adjusted NICS growth, widening Ruger's outperformance against the broader market.
Margins expanded alongside the sales recovery. Adjusted EBITDA rose 205.0% year-over-year to $16.6 million, lifting the adjusted EBITDA margin to 10.5% from 4.1% a year earlier, a gain of 640 basis points. Net income margin improved to 4.4% from negative 13.0% in the prior-year quarter. Average selling price rose 10% to $384, and adjusted gross margin expanded four points versus the year-ago quarter, indicating the improvement came from pricing and product mix rather than higher volume.
That mix shift was itself in transition. New products accounted for 29% of firearm sales, or $80.9 million, over the first half of the year, down from 41% of firearm sales in the first quarter alone, as the unusually strong new-product mix from the first quarter normalized. Inventory trends told a similar story of stabilization: finished-goods inventories fell 100,100 units year-over-year in the second quarter and distributor inventories fell 45,800 units, both steeper declines than the first quarter's drops of 95,800 and 26,400 units, respectively, even as finished-goods levels were "beginning to rebuild".
On a six-month basis, results were more mixed. Adjusted diluted earnings per share for the first half fell to $0.79 from $0.87 a year earlier, a comparison dragged down by the weak first quarter, when adjusted EPS of $0.27 trailed the $0.46 posted in the first quarter of 2024. Cash from operations for the first half rose 39% to $36.1 million from $25.9 million, though the $17.3 million generated in the second quarter alone was down modestly from the roughly $18.8 million to $19.0 million generated in the first. Cash and short-term investments climbed each quarter, reaching $117.5 million at the end of June from $105.2 million at the end of March.
One-time costs shrank and changed character between quarters. The first quarter had carried $3.2 million in fees tied to the Beretta Agreement, $2.5 million in severance from a reduction in force, and a separate $1.7 million charge; the second quarter's one-time items narrowed to $1.2 million of Beretta-related fees plus costs tied to a CFO transition, with no new severance charge disclosed. The CFO transition, in which Andrew Wieland is succeeding Tom Dineen, was first disclosed in the first quarter and generated the itemized transition expenses that appeared in the second-quarter release.
The Beretta relationship itself moved from confrontation toward resolution over the two quarters. What began in May as a proxy contest and a $44.80-a-share partial tender offer, alongside a raised 25% ownership cap for Beretta Holding, was finalized into a Strategic Cooperation Agreement. The dispute left its mark on the balance sheet: stockholder rights costs tied to the matter totaled $4.4 million for the first half, with $1.2 million falling in the second quarter, down from $3.2 million in the first.
Ruger nearly doubled its quarterly dividend to $0.21 a share from $0.11 a share in the prior quarter, a payout still calibrated to roughly 40% of adjusted net income in both periods.