Sturm, Ruger & Company, Inc. Q3 FY2025 earnings call

• The broader market faces headwinds from tariff and interest rate uncertainty, inflationary pressures, and a softening job market, with the firearms market trending down and NICS checks down year-to-date. Despite challenges, the company achieved year-over-year sales growth. - Actively focused on key operational initiatives and innovation activities, including product line rationalization, SKU consolidation, and work at the Hebron, Kentucky facility. - New product sales were significant, with products like the RXM pistol, second-generation Ruger American Rifle, Marlin lever-action rifles, etc. - Reintroduced Glenfield Firearms, expanded the second-generation Ruger American Rifle line, and broadened Marlin caliber offerings in Q3. - Looking ahead, plans include building out the RXM pistol family, launching new modern sporting rifles in Hebron, and reintroducing the Ruger Red Label shotgun.

Net sales for the third quarter of 2025 were $126.8 million, compared to $122.3 million in the corresponding period of 2024. For the 9 months ended September 27, 2025, net sales were $395 million, versus $389.9 million in the corresponding period of 2024. New product sales accounted for $41 million or 34% of net firearms sales in the quarter. On a pretax basis, the company lost $2.1 million in the third quarter of 2025 due to acquisition and operating costs at the new Hebron, Kentucky facility, increased material and technology costs, and sales promotional expenses.

• Goal to be in production with firearms at the Hebron, Kentucky facility by year-end is on pace. - Capital expenditures expected to total $35 million for the year for new product introductions, expanded capacity, upgraded manufacturing, and strengthened facility infrastructure. - Board declared a dividend of $0.04 per share for the third quarter, payable on November 28, 2025.

• Market influenced by availability of used firearms at retail. - Broader market headwinds from tariff and interest rate uncertainty, inflationary pressures, and softening job market affecting discretionary consumer spending and manufacturing costs.

Q: About gross profit margin and what's putting downward pressure on it.

A: It's a combination of things, mainly the costs associated with getting the Hebron, Kentucky facility up and running without revenue.

Q: Update on Hebron facility production.

A: On pace to be in production with firearms by year-end.

Q: Talk about mix and price, and Glenfield's positioning.

A: Heavy LCP orders and shipments were a driver in the quarter; Glenfield is a new price point opportunity to round out the product offering.

Q: Thoughts on steel and other input prices and margin pressure.

A: Fairly flat, with some noise around aluminum but not significant pressure to date.

Q: Glenfield brand positioning and Patrol rifle target.

A: Glenfield is a new price point to attract a new market segment; Patrol rifle is a variant of the Gen II, not law enforcement focused.

Q: 1976 anniversary promotion and Red Label.

A: Evaluating 1976 anniversary promotion, Red Label reintroduction is to become a full-line manufacturer again, and Red Label guns are U.S. made.

Q: Beretta situation.

A: Appreciate Beretta's investment, issued shareholder rights plan, and open to engaging with them.