Bullets Are Getting More Expensive

As counterintuitive as it might seem at first, Republican control in Washington has actually been bad for the gun industry. Because gun enthusiasts no longer fear that gun control laws will make it more difficult to purchase guns, there’s no longer as much urgency to buy them as there was during the Obama era.

And with commodity prices rising, some retailers are beginning to raise the price of bullets. These increases have been only modest so far and probably won’t save firearm companies from mountains of debt and falling stock prices, but it’s looking increasingly likely that Chris Rock’s most famous joke about gun control might soon become a reality.

Vista Outdoor Inc., which owns firearms and ammunition companies, increased the price of bullets last month. In an earnings call held last week, Chief Executive Officer Chris Metz told investors that the company first increased the price of ammunition in early January, per Bloomberg

Vista reported sales of $581 million, an 11 percent decrease from the previous year, but still beat expectations. Since its earnings report on Feb. 8, shares have soared 14 percent.

“Shooting Sports recorded third-quarter sales of $286 million, down 21 percent from $361 million in the prior year quarter, as a result of persistent lower demand in the market for ammunition and firearms,” the executive said during the call.

Metz believes the ammunition price increase will ripple through the industry as competitors follow suit. Customers have been “very understanding” of the price increases so far, he said.

“We’re fortunate that we have extremely close relationships with our customers,” he said. “We are putting forward price increases that we think are realistic and, so far, what we’ve seen from buying behavior is no real changes.

A second price increase will come in April, he advised, and both boosts in price were “in the low- to mid-single digits.” Vista owns Federal Premium Ammunition, CCI, Estate Cartridge, and Force on Force, among other shooting-sports and outdoor product companies. Metz blamed the increases on rising commodity prices.

Interestingly enough, Forbes published a column comparing bullets to bitcoin back in 2013, when the post-Sandy Hook buying hysteria was forcing retailers like Cabela’s and Wal-Mart to start limiting the number of boxes of bullets that their customers could buy.

Sales

But the phenomenon of gun sales rising following mass shootings – a hallmark of the Obama era – has mostly petered out. Smith & Wesson

Despite Republican control in Congress and the White House, things are dire in the firearms industry. Remington, an iconic 200-year old firearms manufacturer, filed for bankruptcy last week. And as Bloomberg pointed out, this could be the tip of the iceberg.

Gun manufacturer American Outdoor Brands, formerly known as Smith & Wesson, has seen its share price drop by more than half in less than a year.

Because, as the Marshall Project points out, in 46 US states, citizens can walk in and buy bullets, no questions asked.

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