America’s gun stores are overstocked – CNNMoney

sturm ruger guns
Sales plunged for Sturm, Ruger, maker of the Mini-14 pictured here and a wide variety of other guns, because dealers overstocked, causing an inventory glut.

NEW YORK (CNNMoney)

There’s a glut of guns for sale in America.

Gun dealers have overstocked, and now they’re just selling off the inventory that they have, without ordering much from manufacturers.

Gun sales surged to unprecedented levels following the Newtown massacre of December 2012, driven by concerns about increased federal regulations, particularly against assault rifles.

Back then, Americans were buying AR-15s and AK-47s as fast as retailers could get them, pushing up prices and creating shortages of guns and ammo.

The stores couldn’t order them fast enough. But they over ordered and now there are too many guns sitting on their shelves.

Sturm, Ruger (RGR) of Southport, Conn., one of the most prominent gunmakers, reported a plunge in sales and profit this week that sent its stock into a tail spin on Thursday. Net sales over three months went to $98 million from $171 million a year ago.

The share price for its rival, Smith & Wesson (SWHC), also took a dive, as investors went sour on gunmakers.

Related: Meet the mom behind Target’s gun ban

Sturm, Ruger makes a wide variety of guns, including M4 and Mini-14 military-style rifles, and sells them to distributors, who sell them to stores. It said “retailers [were] buying fewer firearms than they were selling, in an effort to reduce their inventories and generate cash.”

This is quite different from 2013 and earlier this year, when Sturm, Ruger CEO Michael Fifer complained about retailers placing “grossly unrealistic” …read more

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