SOUTHPORT, Conn. - Sturm, Ruger & Company, Inc. (NYSE:RGR), a leading American firearms manufacturer, reported a decrease in net sales and diluted earnings for the first quarter of 2024. Net sales for the quarter were $136.8 million with diluted earnings of 40 cents per share, compared to the previous year's net sales of $149.5 million and diluted earnings of 81 cents per share.
The company also announced a dividend of 16 cents per share for the first quarter, payable on June 7, 2024, to stockholders of record as of May 20, 2024. The dividend represents approximately 40% of the company's net income, reflecting Sturm, Ruger's policy of paying dividends based on a percentage of earnings rather than a fixed amount per share.
CEO Christopher J. Killoy acknowledged the decline in the overall firearms market in the first quarter, but noted strong demand for several Ruger product families, including recently introduced models. This demand contributed to a sales increase from the fourth quarter and strong distributor sell-through to retail, leading to significant reductions in both the company's finished goods inventory and distributor inventory levels.
Despite the overall market decline, the company's new product sales, which include major new products introduced in the past two years, accounted for $42 million or 32% of firearm sales in the first quarter of 2024, up from $30 million or 21% of sales in the first quarter of 2023.
Killoy also mentioned strategic moves to ensure long-term success, including a business reorganization that resulted in a workforce reduction impacting about 80 employees, with approximately half reassigned to manufacturing positions. This led to a severance expense of $1.5 million in the first quarter and is expected to result in annualized savings of approximately $9 million.
The company's profitability declined in the first quarter of 2024 compared to the same period in 2023, with gross margins decreasing from 26% to 21%. Factors contributing to the lower margin included a product mix shift toward products with lower margins, decreased production and sales leading to unfavorable fixed cost leverage, and inflationary cost increases affecting materials, commodities, services, energy, fuel, and transportation.
Sturm, Ruger's financial position remains strong, with cash and short-term investments totaling $115.3 million as of March 30, 2024, a current ratio of 5.2 to 1, and no debt. The company returned $7.3 million to shareholders in the first quarter through dividends and share repurchases.
The company's Quarterly Report on Form 10-Q for the first quarter of 2024 has been filed and is available for review. This news article is based on a press release statement from Sturm, Ruger & Company, Inc.
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